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People Cutting Down on social drinking and gambling.
The business news agency Bloomberg has realised what many online gambling operators are starting to acknowledge - times may be tough, but there are great business opportunities for the industry being generated by the current economic crisis and its impact on the consumer.
In an interesting article this week, the news outlet found that in Ireland the man-in-the-street is feeling the economic pinch and has started to cut down on two major pastimes - social drinking and [land] gambling.
Focussing on the gambling element of the story, Bloomberg noted that Paddy Power plc, Ireland’s largest bookmaker, revealed this week that the average stake at its Irish land betting stores fell 3.4 percent last year. About a fifth of Ireland’s 1 300 betting offices may close by the end of next year, Goodbody Stockbrokers said of the trend.
And yet, in company with Internet gambling companies elsewhere in the world, Paddy Power's Internet gambling division produced strong 2008 results, contributing some 70 percent to operating profits and becoming the group's main vehicle for accessing international markets. In the UK, William Hill plc revealed this week that it continues to expand its online gambling operations as a critical component in its international strategy (see previous InfoPowa reports).
“The [Irish] economy is having an impact now,” said analyst Liam Igoe at Goodbody in Dublin. “Rather than going to pubs and betting shops, people are staying home and ordering pizzas, buying beer in and betting online. That’s going to continue.”
Ireland's gross domestic product may contract by about 6 percent this year and consumer spending will plunge 7 percent, according to Goodbody. It also forecasts that unemployment will rise to 15 percent by the end of 2010, as companies including Dell Inc., SR Technics and Intel Corp. cut jobs.
Retail sales plunged an annual 8.3 percent in December, capping the worst year for stores in more than a quarter century.
Forty betting stores have already closed across Ireland, Paddy Power said this week. William Hill Plc is closing 14 of its Irish outlets and in all, bookmakers will shut 250 by the end of next year, according to Igoe, as the economic slump combines with a doubling of Irish betting tax to curb demand.
“Gamblers just want to cut their cloth a little bit,” Paddy Power CEO Patrick Kennedy told Bloomberg this week. The average bet placed at his outlets has fallen to Euro 21.45, he said.
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