Harringay, Haringey - So Good they Spelt it Twice!
"UK’s Bookmakers Adjust To The High Street Landscape"
For those who are interested here's the insiders view of what's going on in the gambling Industry:
From GamblingCompliance Ltd., 12/05/2008
First came fixed odds betting terminals, then the demise of the demand test. With varying degrees of willingness, the UK’s betting shops have been dragged into the 21st Century, where they now find themselves adapting to the nuances of a retail landscape, and new practices like ‘clustering.’
Some thirty miles east of the City, among the fish and chips shops and discount stores of the high street in Grays, Essex, the future of betting shops in the UK has been unveiled and the locals are somewhat bemused.
“We had people poking their heads through the door when we were fitting out the shop, and they were asking what it was going to be,” says Derek Wood, managing director of nascent betting-shop chain Betster for whom the Grays manifestation represents the company’s debut opening. “One old dear thought we were a television shop.”
It’s easy to understand the confusion of those walking into this gleaming example of the next generation of betting shops, particularly for anyone brought up with the dingy, smoke-filled and cloth-cap populated bookies of yesteryear.
The Betster shop is a shining example of the changes that are taking place with betting shops in the UK. It’s clean, and, thanks to last summer’s smoking ban, has no hint of stale cigarette smoke. The shop is clearly delineated into three distinct areas: sports betting, machine betting and horse and greyhound betting. It is bright, the colours lively but not gaudy, the TV screens are huge and numerous, the seating cushioned and free-standing. There is a fridge containing free soft drinks and even non-alcoholic beer, while free coffee is available from behind the unscreened off counter, and the whole show can be viewed from the street through huge, un-obscured windows.
“It’s all about service,” is the claim by Wood and a refrain heard across the modern-day industry. The Betster shop is the latest outward sign of an industry which has been transformed by a modernisation process which is still evolving, but which, arguably for the first time, is recognising that customers really count.
It may seem strange that an industry which has been operating in a UK high-street retail environment for more than 40 years should suddenly have discovered that service should be an important part of its proposition.
As Paddy Power, an eponymous spokesperson for the Irish bookmaking chain, puts it, service is now the “Holy Grail.” “You have to engage with the customer,” he adds, no doubt to a chorus of hallelujahs from the retail consultants.
So rigid were the strictures of the 1963 Betting, Gaming and Lotteries Act that as the world of retail changed around them, betting shops tended to stay pretty much as they were; that is, smoky, male-dominated relics of a bygone past with a product selection that rarely strayed from the staples of UK-sourced horseracing and greyhounds.
Then came fixed odds betting terminals. FOBTs changed the high-street bookmakers in a way that no other innovation in the previous 40-plus years had - and in turn brought about a dramatic transformation to the financial bottom lines of all the major firms.
Beginning at the turn of the millennium, FOBTs rewrote the economics of UK bookmaking. Witness the most recent set of results from Ladbrokes. In its yearly results, published in February 2008, of a total gross win of £739m in the UK retail estate, £248m came from the company’s 8,190 machines compared to £205m the year before. Rioting in understatement, Ladbrokes said its machines had “proved very popular with our customers.”
The story was repeated in William Hill’s latest results, also released in February. Gross win across its 8,382 machines was up 15 percent on the year, with each machine contributing £466 per week - a “strong” performance as the company boasted, and one that has continued into the first quarter. As their recent trading statement made clear, while over the counter (OTC) rose 3 percent over the period, machine gross win rose 16 percent.
The impact of machines on UK betting shops today is hard to overstate. As Ciaran O’Brien, spokesperson at Ladbrokes points out, the introduction of FOBTs “reversed the decline” of UK betting. From about 15,000 in the 1970s, the total fell to around the 7,000 level in the late nineties before the introduction of gross profits tax in 2002 ushered in the era of the FOBT.
And now, as manifest in the layout of the new Betster shop, where the machines are placed between the sports betting at the entrance and the horse-race area at the back, the machines are now absolutely central to the modern-day betting shop proposition.
Nick Rust, managing director at Coral, stresses that of the three main components of the modern high-street offering – alongside service and audio-visual offerings – it is machines which have a pre-eminence. “Very importantly,” he says, “when it comes to differentiation, it will come down to the quality of games and machines.”
But as important as the rise of FOBTs has been to the transformation taking place on the high street of Grays and elsewhere, it is not the only influence at play.
The rise of online gambling is an obvious, and generationally influenced, factor. Aided by the ease of access to betting opportunities, a younger, more affluent audience, used to the slickness of betting online has, partly through the availability of FOBTs, been enticed into the shops.
This new audience is one that, every operator agrees, is worth competing for, and one that another element of the 2005 Act has made more accessible.
Among the many measures contained in the Gambling Act 2005 was the ending of the so-called ‘demand test’ which effectively blocked competition on the high street for decades. No longer do new applicants have to make a case to the local magistrate based on demonstrable demand for a new bookmaker in the area; now it falls to the local council and commercial logic.
In other words, genuine competition has truly entered the equation for the first time, ending as Power puts it, the “quasi-cartel of the big three.” As much as price has always been a determinant, it quickly became clear after September that more reasons than ever before could come into play when a punter choose one shop over another.
But for David Paton, professor in industrial economics at Nottingham University Business School and an expert in the economics of gambling industry, the industry has been slow to take up this opportunity. “I have been surprised to see how slowly they have changed. I thought there would be more rapid moves towards coffee shop-style offerings. Maybe the big chains have been slow to react. The ending of the demand test was the push the industry needed.”
Hence the rise of Betster and - confusingly enough – the similarly named Better chain of bookmakers. Since the arrival of his chain on the high street, Ian Hogg, managing director of Better, has been enthusing about what the end of the demand test means for the bookies.
For Hogg it is about nothing less than the arrival of a free market in the bookmaking world. “Competition is coming to the high street, and you have to start looking at your market,” he says. “Are the shops addressing the desires of their biggest customers? Managers have to get away from the old model of simply being settlers. There are still some in this industry that have yet to make that change.”
As Hogg puts it, the Better plan for high-street success is simplicity itself – if the company sees a busy betting shop in a good location, it will plonk its own branch next door. “We are targeting the busy Ladbrokes and William Hill shops,” he says. “Our model is effectively location, location, location. It is our biggest marketing cost.”
Feeling the pressure from the new entrants and the quality of their offerings, the big three have finally taken notice of the changed environment. “Increasingly the betting shop will act more like traditional retailing business,” says Rust. “There is going to be a clustering of locations, much as with other retailers.”
Shops are opening up side by side, he adds. “That didn’t happen before. It means there will be more competition through brand. The new brands will have a go, but really there is an opportunity here for the major brands.”
“With them we will see the introduction of loyalty mechanisms,” he adds. “There will also be the differentiation in games and machines. Then we have our moves with Coral TV – that is no longer a one-size-fits-all video and audio service. All in all, I think you will see a different market in a few years.”
The new market will likely mean more work for the shop fitters. Says Hogg: “There are over 8,500 shops throughout the country and some 7,000 of them are poorly fitted out.”
However, it will also likely mean the end for many of independents who lack the deep pockets of the chain operators.
Joe Phillips, vice chairman of the Independent Bookmakers Association and managing director of Cheshire Racing, is downbeat about the prospects for his members. “I suspect the number of bookmakers will fall,” he says. “We have already lost a few. The traditional bookies are underfunded.”
“Many of the independents simply don’t have the money to invest,” adds Paton. Or as Hogg puts it: “The betting industry is breaking into two groups, the high street versus the back street. And the latter group will be struggling for investment.”
In this respect, the high-street betting industry reflects the progress of the pubs industry in the UK, moving as Paton says from “being mainly male, spit and sawdust environments towards becoming gastropubs.” Or as Paddy Power wryly observes: “Who would have ever thought we would be talking about such things as ambience when it comes to betting shops?”
But welcome as this change might be for some, there could be an unwelcome sting in the tail of this transformation. Just as the high-street bookies have whole-heartedly confirmed their move into the retail mainstream, attracting a younger more affluent audience and helping to make betting a more socially acceptable pastime, a long-anticipated consumer downturn has arrived in the UK.
The punter of old was famously immune to recessions, his or her spending being little affected by any worsening macro environment. But is the new, improved, customer of today quite so resilient? It’s a question that is yet to be resolved. Many will be watching out for the tell tale ‘summer sale’ signs popping up in the windows of the UK’s high street bookmakers.
From GamblingCompliance Ltd., 12/05/2008
First came fixed odds betting terminals, then the demise of the demand test. With varying degrees of willingness, the UK’s betting shops have been dragged into the 21st Century, where they now find themselves adapting to the nuances of a retail landscape, and new practices like ‘clustering.’
Some thirty miles east of the City, among the fish and chips shops and discount stores of the high street in Grays, Essex, the future of betting shops in the UK has been unveiled and the locals are somewhat bemused.
“We had people poking their heads through the door when we were fitting out the shop, and they were asking what it was going to be,” says Derek Wood, managing director of nascent betting-shop chain Betster for whom the Grays manifestation represents the company’s debut opening. “One old dear thought we were a television shop.”
It’s easy to understand the confusion of those walking into this gleaming example of the next generation of betting shops, particularly for anyone brought up with the dingy, smoke-filled and cloth-cap populated bookies of yesteryear.
The Betster shop is a shining example of the changes that are taking place with betting shops in the UK. It’s clean, and, thanks to last summer’s smoking ban, has no hint of stale cigarette smoke. The shop is clearly delineated into three distinct areas: sports betting, machine betting and horse and greyhound betting. It is bright, the colours lively but not gaudy, the TV screens are huge and numerous, the seating cushioned and free-standing. There is a fridge containing free soft drinks and even non-alcoholic beer, while free coffee is available from behind the unscreened off counter, and the whole show can be viewed from the street through huge, un-obscured windows.
“It’s all about service,” is the claim by Wood and a refrain heard across the modern-day industry. The Betster shop is the latest outward sign of an industry which has been transformed by a modernisation process which is still evolving, but which, arguably for the first time, is recognising that customers really count.
It may seem strange that an industry which has been operating in a UK high-street retail environment for more than 40 years should suddenly have discovered that service should be an important part of its proposition.
As Paddy Power, an eponymous spokesperson for the Irish bookmaking chain, puts it, service is now the “Holy Grail.” “You have to engage with the customer,” he adds, no doubt to a chorus of hallelujahs from the retail consultants.
So rigid were the strictures of the 1963 Betting, Gaming and Lotteries Act that as the world of retail changed around them, betting shops tended to stay pretty much as they were; that is, smoky, male-dominated relics of a bygone past with a product selection that rarely strayed from the staples of UK-sourced horseracing and greyhounds.
Then came fixed odds betting terminals. FOBTs changed the high-street bookmakers in a way that no other innovation in the previous 40-plus years had - and in turn brought about a dramatic transformation to the financial bottom lines of all the major firms.
Beginning at the turn of the millennium, FOBTs rewrote the economics of UK bookmaking. Witness the most recent set of results from Ladbrokes. In its yearly results, published in February 2008, of a total gross win of £739m in the UK retail estate, £248m came from the company’s 8,190 machines compared to £205m the year before. Rioting in understatement, Ladbrokes said its machines had “proved very popular with our customers.”
The story was repeated in William Hill’s latest results, also released in February. Gross win across its 8,382 machines was up 15 percent on the year, with each machine contributing £466 per week - a “strong” performance as the company boasted, and one that has continued into the first quarter. As their recent trading statement made clear, while over the counter (OTC) rose 3 percent over the period, machine gross win rose 16 percent.
The impact of machines on UK betting shops today is hard to overstate. As Ciaran O’Brien, spokesperson at Ladbrokes points out, the introduction of FOBTs “reversed the decline” of UK betting. From about 15,000 in the 1970s, the total fell to around the 7,000 level in the late nineties before the introduction of gross profits tax in 2002 ushered in the era of the FOBT.
And now, as manifest in the layout of the new Betster shop, where the machines are placed between the sports betting at the entrance and the horse-race area at the back, the machines are now absolutely central to the modern-day betting shop proposition.
Nick Rust, managing director at Coral, stresses that of the three main components of the modern high-street offering – alongside service and audio-visual offerings – it is machines which have a pre-eminence. “Very importantly,” he says, “when it comes to differentiation, it will come down to the quality of games and machines.”
But as important as the rise of FOBTs has been to the transformation taking place on the high street of Grays and elsewhere, it is not the only influence at play.
The rise of online gambling is an obvious, and generationally influenced, factor. Aided by the ease of access to betting opportunities, a younger, more affluent audience, used to the slickness of betting online has, partly through the availability of FOBTs, been enticed into the shops.
This new audience is one that, every operator agrees, is worth competing for, and one that another element of the 2005 Act has made more accessible.
Among the many measures contained in the Gambling Act 2005 was the ending of the so-called ‘demand test’ which effectively blocked competition on the high street for decades. No longer do new applicants have to make a case to the local magistrate based on demonstrable demand for a new bookmaker in the area; now it falls to the local council and commercial logic.
In other words, genuine competition has truly entered the equation for the first time, ending as Power puts it, the “quasi-cartel of the big three.” As much as price has always been a determinant, it quickly became clear after September that more reasons than ever before could come into play when a punter choose one shop over another.
But for David Paton, professor in industrial economics at Nottingham University Business School and an expert in the economics of gambling industry, the industry has been slow to take up this opportunity. “I have been surprised to see how slowly they have changed. I thought there would be more rapid moves towards coffee shop-style offerings. Maybe the big chains have been slow to react. The ending of the demand test was the push the industry needed.”
Hence the rise of Betster and - confusingly enough – the similarly named Better chain of bookmakers. Since the arrival of his chain on the high street, Ian Hogg, managing director of Better, has been enthusing about what the end of the demand test means for the bookies.
For Hogg it is about nothing less than the arrival of a free market in the bookmaking world. “Competition is coming to the high street, and you have to start looking at your market,” he says. “Are the shops addressing the desires of their biggest customers? Managers have to get away from the old model of simply being settlers. There are still some in this industry that have yet to make that change.”
As Hogg puts it, the Better plan for high-street success is simplicity itself – if the company sees a busy betting shop in a good location, it will plonk its own branch next door. “We are targeting the busy Ladbrokes and William Hill shops,” he says. “Our model is effectively location, location, location. It is our biggest marketing cost.”
Feeling the pressure from the new entrants and the quality of their offerings, the big three have finally taken notice of the changed environment. “Increasingly the betting shop will act more like traditional retailing business,” says Rust. “There is going to be a clustering of locations, much as with other retailers.”
Shops are opening up side by side, he adds. “That didn’t happen before. It means there will be more competition through brand. The new brands will have a go, but really there is an opportunity here for the major brands.”
“With them we will see the introduction of loyalty mechanisms,” he adds. “There will also be the differentiation in games and machines. Then we have our moves with Coral TV – that is no longer a one-size-fits-all video and audio service. All in all, I think you will see a different market in a few years.”
The new market will likely mean more work for the shop fitters. Says Hogg: “There are over 8,500 shops throughout the country and some 7,000 of them are poorly fitted out.”
However, it will also likely mean the end for many of independents who lack the deep pockets of the chain operators.
Joe Phillips, vice chairman of the Independent Bookmakers Association and managing director of Cheshire Racing, is downbeat about the prospects for his members. “I suspect the number of bookmakers will fall,” he says. “We have already lost a few. The traditional bookies are underfunded.”
“Many of the independents simply don’t have the money to invest,” adds Paton. Or as Hogg puts it: “The betting industry is breaking into two groups, the high street versus the back street. And the latter group will be struggling for investment.”
In this respect, the high-street betting industry reflects the progress of the pubs industry in the UK, moving as Paton says from “being mainly male, spit and sawdust environments towards becoming gastropubs.” Or as Paddy Power wryly observes: “Who would have ever thought we would be talking about such things as ambience when it comes to betting shops?”
But welcome as this change might be for some, there could be an unwelcome sting in the tail of this transformation. Just as the high-street bookies have whole-heartedly confirmed their move into the retail mainstream, attracting a younger more affluent audience and helping to make betting a more socially acceptable pastime, a long-anticipated consumer downturn has arrived in the UK.
The punter of old was famously immune to recessions, his or her spending being little affected by any worsening macro environment. But is the new, improved, customer of today quite so resilient? It’s a question that is yet to be resolved. Many will be watching out for the tell tale ‘summer sale’ signs popping up in the windows of the UK’s high street bookmakers.
Tags for Forum Posts: betting shops, fobts, gambling
Replies to This Discussion
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Permalink Reply by Liz on
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And never mind what this 'clustering' does to a high street, eh?
Who are they trying to kid? Metrobet is hardly fitted out as a 'coffee lounge entertainment experience' full of an affluent (presumably male) clientele enjoying a social afternoon.
It's a grotty little corner shop, full of silent men gawping at a TV screen. I know because they had the door open on Saturday so we could all see its unpleasant ugly little interior.
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Permalink Reply by marc garrett on
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>attracting a younger more affluent audience and helping to make betting a more socially acceptable pastime, a long-anticipated consumer downturn has arrived in the UK.
It does not deal with the fact that they are conning people, no matter what spectacle or shiny veneer they choose to adopt - it has the same function.
Respectable is just a relative term, when considering the context of current difficulties that many people are having in surviving, keeping their jobs. We know that some just cannot help themselves but take a chance and gamble their cash away carried by the hope of that they might just get lucky this time. This idea that the clients are suddenly going to change and suddenly out of nowhere become a more harmonized genre of metro sexual types, gambling with their own cash, of course is not going to happen.
I'm actually not sure if I am actually against betting shops, I just don't want a flood of them in my area - it's cheesy, it just does not work to have too many of them about.
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Permalink Reply by Clive Carter on
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I notice our most dense local cluster of betting shops (three of them) are also clustered close to cash outlets: the post office and two building society cash points.
It's a cynical operation that, in aggregate, contributes nothing to the overall health and wealth of the customers or the economy.
What a disappointment that our local council applied to itself for a gambling licence at the charitable trust it controls - Alexandra Palace - and awarded itself an off-track betting licence. Does this abusive process not amount to municpal condoning and endorsing of this "industry".
We should not forget that some Councillors (including the Councillor who chaired the Alexandra Palace gambling Hearing committee) believe in gambling and casinos as a means of urban regeneration.
Although the "Executive" (only) majority-voted not make an application for a casino licence for Alexandra Palace in 2006, conspicuously there has been no Full Council resolution for a no-casino policy. Why not? Was it to assuage the pro-gambling lobby in the Council? Despite great bluster to the contrary, it is a fact that this Council has left the door open to a casino in this Borough.
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It was an 'irony', I spotted too Clive, that you could be out of the post office and into the bookies in 30 seconds
I'm not anti gambling, I was married in a Vegas casino and have spent time and lost money in casinos in Australia, Vegas, Asia and Central London. I have even bet in a Green Lanes betting shop when there were only 2 of them. It's a mugs game of course and for some people, it becomes a serious threat to their health and well being but for most of us it is as easy to take or leave it as a bottle of wine. I'm saying this, so people don't think I'm some sort of 'disgusted of Tunbridge wells' anti everything type.
It is a matter of the effect such clustering has on the community and local amenities that matters. This kind of unbridled business practice does untold damage to the poorer communities that have to deal with them. If the bookies are so keen on the affluent up market client, why aren't they clustering in Muswell Hill and Crouch End? No, of course not. The 'affluent' angle is a load of rot and everyone knows it.
As to Ally Pally, I support you all the way and am dismayed at the way this is being handled by politicians. Has Boris offered to step in and save it for the nation? The pro gambling lobby in the council who believe gambling is a key to urban regeneration are kidding themselves. All sorts of extra crime and misery is attracted to the money: drugs, prostitution, exploitation, addiction. Go to the seedier parts of Vegas or even round the back of a Macao casino (as I have) and you'll see the darker side of the 'entertainment industry' that gambling brings to an area.
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Permalink Reply by frank demster on
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Heroin and crack cocaine dealing are also good for the local economy if by economy you mean some people making a pile of cash, a few people employed and loads of people not feeding their children.
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