The UK gambling industry is one of the most lucrative in the world. A report by the UK Gambling Commission showed that the regulated gambling industry in Great Britain generated a gross gambling yield (GGY) or equivalent of £14.3bn, a considerable leap from the £8.4 billion in 2011, but still a slight decline of 0.5% from 2018. Globally, the online gambling market size surpassed $55 billion in 2019 and is anticipated to grow at 16.5% between 2020 and 2026.
This year has been a unique and challenging year for the UK gambling industry. COVID-19 and a four-month March lockdown meant bingo halls, betting shops and casinos were all closed and sporting events cancelled across the world. Despite a complete drop off in sports betting, online gambling activities increased. Online bingo, poker, slots, and casinos all saw an uptake in users as global lockdowns pushed people online.
So, with a mixed set of fortunes – physical events closed but online activity increasing, how are Britain’s gambling companies faring and what three UK gambling stocks to look out for in the final quarter of a rollercoaster year?
Playtech PLC (LON: PTEC)
Founded in 1999, the gaming, gambling and trading technology provider has enjoyed a solid third 2020, reaping the benefits of the spike in online gambling whilst agreeing a number of distribution deals and partnerships to expand their reach.
Now, with a market cap exceeding £1 billion and priced at 351.70, Playtech PLC (LON: PTEC) shares have come a long way from March’s 141.35 low. Although there are legitimate concerns over being overpriced and running out of steam, there is still plenty of value in Playtech PLC (LON: PTEC) shares.
With plenty of partnerships taking place, the provider of some of the more popular bingo sites like those found here is expanding at an impressive rate. Expect more growth during the lockdown and more partnerships signed.
GVC Holdings PLC (LON: GVC)
One of the biggest gambling companies in the world, and owners of some of the UK’s biggest bingo, casino, and sports betting brands, 2020 has been a mixed year.
The owner of the Ladbrokes Coral betting group recently warned that the new coronavirus lockdowns imposed on the UK and Europe will cost the company at least £37 million in the fourth quarter. However, group net revenue climbed 12% in the third quarter to end-September and just last week, the FTSE 100-registered company founded in 2004 raised its forecast for underlying profits in the current year to end December 2020 to between £770mln and £790mln.
Plenty of upside still to go in the GVC Holdings share price before the end of the year.
The Rank Group PLC (LON: RNK)
The Rank Group PC (LON: RNK) owners of the Mecca Bingo chain of clubs and Grosvenor casino chain, as well as popular online bingo and casino brands, has suffered under covid-19 restrictions and lockdowns.
Having recently sold its Belgian casino interests to the Kindred Group, the company is in talks with its advisers over a potential equity issuance of up to a maximum of 19.9 percent allowed by the London Stock Exchange, which would raise £70 million.
News of the share issuance sent The Rank Group PLC (LON: RNK) stock soaring, closing Monday up 23.52% at 115.00. However, the share price is some way below February’s 322.50 high.
With operational costs being cut, funding found and the hope of a lockdown not extended beyond December 2nd, there is certainly room for growth in The Rank Group PLC (LON: RNK) stock price for the rest of the year.