The Gambling Tax Shake Up Wasn’t A Losing Bet for Some Competitors

Lorna Gill Posted by Lorna Gill

New UK tax laws came down hard on the gambling industry in December, but as businesses tried to maximise ROI, what real effect did this legislation have on the gambling PPC market?

Last December saw new gambling tax laws come into effect, ruling that any gambling company operating outside the country had to pay a 15% tax on all profits they made from UK customers.

Additionally, any special offer (such as free credits towards future bets) would be tightly regulated – the law states that organisations promoting such offers must be keeping record of them, including details about the “take up and use of such offers and the value had the full amount been staked.”

We made a number of predictions about these changes, but after three months with these laws in effect, have we seen any real shifts within the betting industry in terms of PPC?

How Did Our Predictions Fare?

We predicted the most pressing change would be that, as companies battled against the tax hikes, the cost-per-click (CPC) rate would decrease.

Adthena’s estimated cost-per-click data shows that the CPC remained stable for many specific terms, but there were some big price changes for the more generic terms – specifically, those related to betting sites, free betting, and those targeting consumers browsing their options without an allegiance to any specific gaming company.

[lightbox rel=”group1″ width=”860″ href=”https://www.adthena.com/wp-content/uploads/2015/04/cpcsBettingIndustry.jpg” title=”Estimated cost per click for betting keywords, Adthena data” src=”https://www.adthena.com/wp-content/uploads/2015/04/cpcsBettingIndustry.jpg”][/lightbox]
Estimated cost per click for betting keywords, Adthena data

The most obvious trend that pops up in our analysis of these generic terms (excluding specific, seasonal events like X Factor, horse racing meets, and football matches) is that in December, all terms excluding betting sites and bet decreased in cost-per-click.

The keywords related to free betting have not recovered. The generic term online betting experienced the sharpest decline in December, though it’s now starting to make a recovery.

Of course, this decline could also be related to the season – customers are typically saving up for Christmas throughout December and often have less money to spend on gambling.

[lightbox rel=”group1″ width=”860″ href=”https://www.adthena.com/wp-content/uploads/2015/04/Betting_Keyword_Traffic.png” title=”Betting keywords traffic, Adthena data” src=”https://www.adthena.com/wp-content/uploads/2015/04/Betting_Keyword_Traffic.png”][/lightbox]
Betting keywords traffic, Adthena data

But a look at the share of voice (SOV) leading up to February, when the market should be returning to normal, reveals a more concerning trend. All terms took a sharp nosedive in December, as gambling organisations started bidding on more specific search terms – and apart from betting sites, these terms aren’t showing any signs of recovery.

[lightbox rel=”group1″ width=”860″ href=”https://www.adthena.com/wp-content/uploads/2015/04/Gambling_Tax_Analysis_SOV.png” title=”Top betting companies share of voice, Adthena data” src=”https://www.adthena.com/wp-content/uploads/2015/04/Gambling_Tax_Analysis_SOV.png”][/lightbox]
Top betting companies share of voice, Adthena data
[lightbox rel=”group1″ width=”860″ href=”https://www.adthena.com/wp-content/uploads/2015/04/Betfred_keywords.png” title=”Betfred keyword traffic, Adthena data” src=”https://www.adthena.com/wp-content/uploads/2015/04/Betfred_keywords.png”][/lightbox]
Betfred keyword traffic, Adthena data

Perhaps the most alarming shift in the competitor play was BetFred’s SOV. The company decided to stem spending between July and November – from right after the changes were announced up until they came into effect.

The company dropped spend on all keywords, managing to get a tiny share of clicks on X Factor-related keywords, but not with an impact significant enough to change its overall SOV.

It’s a possibility that BetFred had been saving its budget in the quieter summer months so it could go all in when the gambling laws changed, or that it took this opportunity to think about how it was going to compete at the tail end of the year and into January.

Timing Is Everything, but Don’t Stop the Spend

The new gambling laws aren’t the only big change that has happened in the gaming industry in recent months. Last week, Metro Play and Metro Play-owned 666Bet both had their licences suspended by the Gambling Commission as the regulator investigated into their businesses practices.

When there’s a big shake-up in an industry like this, it’s important that your company be prepared for change. This means monitoring your competitors’ bidding activity and adapting your strategy to make the most of turbulent times.

Making intelligent decisions about when to bid on certain keywords, watching how CPCs change, and staying one step ahead of the competition is key for any company trying to boost ROI and become the market leader.

Request a demo with Adthena today to see how any upcoming changes may affect you and what your competitors are doing to prepare for them – even if they’re keeping their cards close to the chest.

Disclaimer: No client data was used to generate this blog post

(Main image credit: Matthew Wilkinson/flickr)

About the author

Lorna Gill
Lorna Gill
Lorna is responsible for acquisition marketing at Adthena, communicating their award-winning product and generating demand. She has developed her career in fast-paced, start-up environments, including two tech track 100 companies and is passionate about translating technical information into stories that excite and delight.