19 April 2018 A seminar organised by and generously hosted by - PowerPoint PPT Presentation

UK Gaming Sector Update 19 April 2018 A seminar organised by and generously hosted by

Format and Operator Panellists • Gaming Sector Overview Neil Richmond • Panel Session, chaired by Daniel Anning Operator Panellists Byron Evans John Kerr Peter Willans Richard Noble • Q&A

The UK Gaming Market Worldwide GGY £395bn (9% on-line) UK GGY (to Mar 17) £13.7bn (34% on-line) UK On-Line 10% yoy growth 2016/17 106,236 employees 182,916 gaming machines Source: William Hill R&A’s 2017 and Gambling Commission Website Statistics

The UK Gaming Market (£ bn’s ) 3/17 3/12 change Remote * £4.72 ** £0.71 *** +565%? Betting £3.35 £3.03 +10.6% Nat Lottery £2.98 £3.12 -4.5% Casinos £1.16 £0.87 +33.3% Bingo £0.69 £0.68 +1.5% Other Lottery £0.44 £0.23 +91% Arcades £0.41 £0.38 +7.9% Total £13.76 £9.03 +52%? *remote betting, bingo and casino **2014 Act regulated GB customers only ***2005 Act regulated Source: Gambling Commission Website Statistics

Machine Categorisation Machine category and permitted venue Maximum stake (from January 2014) Maximum prize (from January 2014) A – none currently permitted Unlimited B1 - casinos £5 £10,000 (£20k if linked) B2 – casinos and LBO’s £100 £500 B3 – above + AGC’s and bingo £2 £500 B3A – members’/miners clubs B4 – all of the above £2 £400 C – all of the above + FEC’s £1 £100 D (various non-money and/or money £8/£50/£8(max £5 cash) 30p/£1/10p/10p/2-p prize machines) – above + ‘fairs’ /£20(max £10 cash)

Licensed Betting Offices c 8,500 betting shops at end 2017 (down 7% cf 2012) Ladbrokes Coral 40% (£1.17bn merger 2016) William Hill 28% Betfred 20% Other 12% c 800 individual licencees

Licensed Betting Offices 3/2017 GGY on Betting - £3.35bn (cf £2.90bn to 3/09 - +15.5%) 3/2017 43% betting 57% machines 3/2009 60% betting 40% machines Source: Gambling Commission Website Statistics

Licensed Betting Offices 89% of £3.35bn GGY via off-course betting Off Course Split 42% 21% 15% 43,000 FTE jobs 15% General Betting Duty 25% Machine Games Duty £1bn tax contribution

Licensed Betting Offices Take Away’s from William Hill R&A’s 2017 • 82% of T/O from UK operations • 54% of UK T/O from retail cf 36% from on-line • Net Revenue up 7% 13% on-line cf 2% retail • Gross Win in shops 18% • +3% revenue from gaming machines (c£1k/week/machine – max 4) • Opened 8 Shops, closed 41 – end year count 2,342 shops • Average profit/shop £68,120 • Average rent/shop £22,000 (ave 3 year unexpired term)

Casinos As at Sept 2017 Rank Group 63 (bought Gala Casinos in 2014, 38/25 split) Genting UK 41 Others 27 Caesars Entertainment 9 2005 Act Casinos 6 (4 of 8 large/2 of 8 small)* Total 146 *Newham L11, M Keynes L13, Luton S15, Solihull L15, Wolverhampton S16, Leeds L17 Source: Gambling Commission Website Statistics

Casinos (£ bn’s ) 3/17 3/12 change Casino GGY £1.16 (8.5%) £0.87 (9.6%) +33.3% Table Drop £7.52 £5.40 +39.2% Table Win (GGY%) £0.96 (12.8%) £0.74 (13.7%) +29.7% Machine GGY £0.21 £0.13 +61.5% Table/Machine 82%/18% 85%/15% Source: Gambling Commission Website Statistics and NR&Co analysis

Casinos (£ bn’s ) 3/17 3/12 change Casinos 145 145 Machines 3,170 2,855 +11% Machines/Venue 21.9 19.69 +11% 1968 Act casino up to 20 machines (up from 10 under the 2005 Act) Large Casino up to 150 machines (5x gaming table number) Small Casino up to 80 machines (2x gaming table number) Source: Gambling Commission Website Statistics and NR&Co analysis

Casinos Take Away’s from Rank Group R&A’s to June 2017 London Provinces Revenue (yoy change) £140.1m (-6.8%) £242.1m (-0.7%) Customer Visits 1,398k (-5.7%) 6,087k (-5.4%) Spend per Visit £100.21 (-1.2%) £39.78 (+5.0%) Revenue Split (UK) Casino Games 65.0% Gaming Machines 23.4% (and up 3% in H1 to 12/17, 23.9% of total GGY) Card Room Games 4.0% Food&Drink/Other 7.6%

Bingo Bingo Clubs as at June 2017 Gala Bingo 130 (bought out of Gala Coral Group in 2015) Rank Group t/a Mecca 85 Others 143 (Majestic, Carlton, Club 3000, Castle, Beacon) Total 358 (+c.225 bingo licenses in holiday parks, AGC’s, working men’s clubs etc) Source: Gambling Commission Website Statistics/Rank Group R&A’s 2017

Bingo (£ bn’s ) 3/17 3/12 change Bingo GGY £0.69 (5.0%) £0.68 (7.5%) +1.5% Bingo Games £368.8m £415.4m -11.2% Machines £318.0m (46%) £265.3m (39%) +19.9% Machines/Licence 112 60 +86.7% Source: Gambling Commission Website Statistics and NR&Co analysis

Bingo Machine Mix Cat B3 18.4% Cat C 71.7% Cat D 9.8% Bingo Games Mix T/O GGY GGY% Main Stage Bingo 54.9% 34.3% 21.0% Mechanised Bingo 43.1% 64.4% 50.3% Prize Bingo 1.0% 1.3% 22.3% 33.7% overall Source: Gambling Commission Website Statistics and NR&Co analysis

Bingo Take Away’s from Rank Group R&A’s to June 2017 and Dec 2017 y/e 6/17 H1 12/17 Revenue (yoy change) £213.6m (-3.0% LfL) (-3.0% LfL) Customer Visits 10,528k (-9.0% LfL) (-7.0% LfL) Spend per Visit £20.29 £20.93 (-6.0% LfL) (+4.0% LfL) Revenue Split (UK) Main Stage Bingo 16.4% 17.5% Interval Games 38.8% 37.2% Amusement Machines 32.6% 32.7% Food&Drink/Other 12.2% 12.7%

Adult Gaming Centres • Over 18’s policy • Typical Profile is ‘45 and female’ (as per Praesepe Website) • Unlimited C and D machines • Maximum of 20% of machines can be category B3 and/or B4 • cf with FEC’s/Seaside Arcades (which may have an AGC within it)

Adult Gaming Centres 3/17 3/12 change No. of AGC Licences 1,550 2,247 - 31% (of which c.1,000 relate to high street AGC premises) • 259 Novomatic (t/a Quicksilver/Admiral/Noble)* • 158 Praesepe (t/a Cashino) • Motorway Service Areas * following Novomatic acquisition of Talarius in 2014

Adult Gaming Centres 3/17 3/12 change No. of AGC premises 1,550 2,247 - 31% Machine GGY £349.9m £302.4m +16% Ave GGY/premises £226k £135k +67% No. of AGC machines 58,307 54,600 +6.8% Ave Machines/Premises 37.6 32.7 +15% Source: Gambling Commission Website Statistics and NR&Co analysis

Adult Gaming Centres Average AGC (3/17) Ave No. Ave GGY Cat B3/B4 Machines 7.7 £16.3k Cat C Machines 20.8 £3.9k Cat D Machines 9.1 £1.7k Total 37.6 £21.9k B3/B4 % 20% 74% Source: Gambling Commission Website Statistics and NR&Co analysis

Panel Session Chaired by Daniel Anning Operator Panellists Byron Evans - Peter Willans - John Kerr - Richard Noble