How Technology Will Help Keep Retail Betting Alive

Scott Ferguson

The worldwide state of retail betting

Almost since the relegalisation of UK betting shops in the 1961, the doom predictors have had the death of the betting shop in their sights.

From the advent of the betting tax in 1966 (later repealed and replaced with a gross profits tax), to the introduction of online and later mobile betting, to the hefty stake restrictions on B2 gaming machines (Fixed Odds Betting Terminals or FOBTs), enforced change is never far away for bookmakers.

Times change and the government loves to throw a spanner in the works whenever bookmakers get too profitable or appear to be failing in their social responsibilities. Yet still the retail industry survives – perhaps not as prevalent as it was at its peak – but still in a healthy position.

Every business on the high street has struggled to deal with the onset of the internet with banks, department stores, restaurants and toy retailers among those leaving empty shops behind. The bigger, adaptable companies continue to grow while smaller or more rigid businesses get swallowed up or slowly wither and die.

Even before the latest move on FOBT stakes, smaller bookmakers struggled to compete with the multi-national, billion pound firms who rule by economy of scale. In a similar vein to a money-burning sport like Formula 1, the barriers to grow, even from a tiny to a small business, are substantial. The big names snare the prime real estate, demand the media attention and dominate the advertising cycle.

While the backmarkers are left to compete for crumbs, limited in infrastructure by budget and forced to advertise in fanzines or 200-download podcasts rather than prime-time Sky Sports TV slots. Of course, the latter is subject to the newest disruption, the voluntary (read as, “let’s do something ourselves before the government comes down on us ten times harder”) ban on bookmaker advertising during live sports broadcasts.

The novelty and grandeur of the Vegas-style casino sportsbook won’t work in the mature British market, nor will the sports bar in a pub model from Australia and Europe owing to the irresponsibility of many when alcohol is involved, but there must be some middle ground.

Increased pressure on the industry

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With endless investor pressure, the major players are continually driven to streamline operations and add to revenue via merger and acquisition, often creating further economy of scale.

Automation has decimated the size of trading teams (yes, to about a tenth of original size), development centres have been sent offshore along with internet operations, while telephone betting centres are a relic of the past.

Staffing levels in licensed betting offices have been stripped back to the bare minimum with customers heavily incentivised to move their trade online as acquisition and ongoing relationship management costs of existing customers are predictably far cheaper than finding new ones.

The total number of shops In Britain and Ireland may decrease as the industry consolidates, but retail will continue to evolve. It simply must to survive. The betting cafe with floor-walking staff taking bets has been proposed in the past, but in the current day and age of retail shops sounds as far off the mark as The Homer.

The future of technology-based retail betting

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Most UK operators report the majority of sports wagers are now placed on self-service betting terminals (SSBTs) rather than over the counter (OTC), aligning with a trend very common to many high street business.

But there is still plenty of business to convert.

The first staffless betting shops are now operating in Ireland, stocked with SSBTs, TV screens, a payout machine and a video link to a remote office. This might only work on a small scale, and critically, Ireland does not have FOBTs to deal with, but the BetXS-brand shops are proving more cost-effective than a standard independent betting office.

The Australian model, in the specialist betting shops and inside pubs, sees over 95 per cent of retail bets placed via self-service machines, with staff managing the venue and payouts rather than dealing with the minutia of every transaction.

While cash still has a place in society, there will always be a need for retail betting. How much the betting shop of 2025 will differ from the shop of 2019 is unclear, but the movement toward digitisation and self-service technology is only going to continue.

At Captec, we have a strong history of developing leading-edge technology products across a broad range of industries. Gaming and wagering is a recent addition to that range, and in the coming months, our portfolio of products aimed at extending the life and versatility of betting terminal hardware will be released. See the portfolio here.

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