I think when looking at the betting outlook in the UK for the next couple of years, it is important to look at the overall economy as I think it is a pretty good starting point. It always used to be the case that alcohol, cigarettes and gambling were viewed as very resolute sectors. They tend to be fairly recession resistant industries. I am not convinced that will necessarily be the case this time round.
I saw a stat recently that said 25% of Brits have less than £1k in their bank accounts and 45% less than £4k. If that is true and I have no reason to believe it isn’t then the coming months of huge inflation will absolutely destroy the normal person. Even if energy bills only increase by £2k and not the suggested £4k it will wipe out any savings left for huge numbers of people. Allied to other inflationary measures like food, fuel and mortgage repayments and the outlook for the economy looks very grim. What we haven’t seen yet is the mass unemployment that goes with it. It will happen though. It just takes time to filter through. Companies will have to reduce costs on a backdrop of falling demand for their products and higher costs. Credit card debt is soaring in the US and will do here as well.
The first sectors that get hit in tough times are the discretionary and entertainment sectors. Betting always claims to fall under the entertainment sector. We shall see. I think the whole sector is going to take a big hit in the coming years. We haven’t seen the true impact yet in the financial reports of the betting companies. It will come though. People are going to have some very tough decisions to make soon. People just wont be able to afford to go out like they did previously, restaurants, theatre, concerts, sporting events/season tickets, tv subscriptions, holidays, etc. These industries will get clobbered.
Very simply if people have to make a true choice and aren’t betting for compulsive reasons, then spending on betting will have to go way down. The reality is that the huge majority of people lose at betting anyway. It should be a simple cost saving for a person if they need it. When you compound this with the future gambling reviews such as Affordability Checks, the news for the sector generally looks very bleak. What I am not sure about is how much the sector has previously relied on the massive whale losing accounts during the tough times. Whether they covered up a lot of falling business in other areas. That’s not to say there wont still be some of those huge losing accounts, its just that with Affordability Checks they will surely be significantly reduced. Same with previous credit card use that is now banned.
How does this all tie into the life of a pro punter? I think it can only result in falling liquidity on exchanges like Betfair. Not only that but if you have less mug money (hate that phrase) then competition on the exchange will only get significantly tougher. If it is shark against shark then peoples profits will decrease. I already know of plenty of people who no longer do this for a living and I think that trend will just continue. If liquidity decreases it can become quite a nasty cycle. It feels like the ecosystem on Betfair is very fragile at the best of times but this cant be good for it.
Maybe its time for Betfair to truly consider its pricing structure again. I would worry if I only bet in periphery markets because they will be the ones to suffer first. I suspect that in running markets will also suffer which impacts someone like myself.
Who knows how it will all play out but I think you have to look at the bigger picture and be concerned if you do this for a living. There are always things to look out for and consider. Don’t put all your eggs in one basket.
ProPunting 