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by Tom Scotney, Birmingham Post
As video game companies in the West Midlands struggle, and global players cut console prices to stimulate demand, research by Ernst & Young has said online gambling is one part of the market with a bright future.
Its annual report into the gaming industry said the economic downturn was bringing challenges to the sector, but innovation in online gambling was still bringing in money.
Jim Bowden, senior manager in Ernst & Young UK's betting and gaming team, said: "A reduction in consumer confidence and disposable income has resulted in many global markets seeing a decrease in gaming revenues. Additionally, the tightening of the credit markets caused the deferral of major projects at destination gaming resorts.
Operators around the world are studying very closely every aspect of their business models to ensure they are providing customers the services they demand."
The study revealed that online gaming has seen robust trading, with many operators in the bingo and lottery markets expanding their online presence.
Mr Bowden added: "Online games provide a form of escapism for people during the difficult times and the potential audience is huge - anyone who has an internet connection. The past year has seen continued growth and innovation in this area. Online games are a fun, cost effective alternative to other leisure activities during an economic downturn."
But while online gambling has been the main success story, some casinos have weathered the recession better than others, the report said.
It said domestic gambling sites around the world were affected less than tourist gambling spots because people had been cutting down on air travel.
Some operators have also introduced new forms of gambling that have yet to face a recession.
In the UK, the growth of Fixed-Odds Betting Terminals (FOBTs) continues to be a major area of focus for bookmakers. Many bookmakers said that revenue generated from FOBTs now exceeds traditional over-the-counter gambling.
The bingo industry, like the pub industry, was hit badly by the smoking ban. The report said that this was a particular challenge since operators earn the most lucrative returns from gaming machines in the intervals between games, when most smokers go outside for a break.
The report said the industry over the coming months would be a matter of ‘survival of the fittest', concluding: "Given that many operators in the industry have already taken steps to reduce costs to align themselves to the new regulatory environment, they could be well placed to emerge stronger as the upturn comes, according to the study."
