Oddschecker data: Margins jump in December but sign-ups continue to slow

Operators should be primed for UK market slowdown as growth continues to stagnate in monthly registration figures, according to the latest Oddschecker data.

December figures, collected in collaboration with Barclays, showed sign-ups for the Big 7 bookmakers at a four-year low, with Barclays warning an economic downturn could lead to a further reduction in betting activity.

“We expect the theme of a UK slow-down to become increasingly prevalent in 2019,” said Barclays analyst Patrick Coffey.

“While regulation is the biggest driver of growth across the sector, it is worth remembering that revenues are relatively cyclical and correlate with employment levels.

“With the fear that the UK economy may slow down and the risk that player protection measures suppress short-term growth, we think it is useful to dust off the history books to present some key data highlighting the cyclicality of the sector.” This is presented in the graph below:

Muted growth in monthly registration figures for Oddschecker’s Big 7 operators is also suggestive of a UK slowdown, as demonstrated in the below graph:

For the last three months, Barclays has flagged that monthly Oddschecker registrations have been slowing, especially for the Big 7 operators.

“This could be read as a bearish signal for the sector albeit it may be too early to conclude this,” said Coffey.

“The UK is a maturing market with greater regulatory pressures so we will continue to track this data to see if it is representative of an underlying UK slow-down,” the note added.

On the flipside, gross win margins in December improved to 5.3% versus the long-term average of 2.8% suggesting Q4 gross win margins for the sector could well be better than expected.

This was largely driven by a step up in draws during the period in European football, particularly in Spain’s La Liga and Italy’s Serie A.