Increasing competition, uncertain economic conditions and other factors are expected to take their toll on the industry over the next five years
Melbourne, Victoria (PRWEB) July 02, 2014
Social Clubs in Australia have faced some turbulent times. Before 2008-09, a steady increase in gaming machine numbers and lax smoking laws aided industry prosperity. However, according to IBISWorld industry analyst Ryan Lin, “the introduction of caps on the total number of gaming machines allowed in each club by various state governments, coupled with the impact of the global financial crisis, has hampered industry growth.” For an industry that now derives close to 60% of its revenue from gambling, these have been unwelcome developments. Furthermore, the effect of smoking bans introduced in the early 2000s has constrained industry revenue. Industry revenue derived from non-gambling activities is expected to remain mostly flat over the five years through 2013-14.
In addition to regulatory threats, the industry faces intense competition from other licensed venues also offering gaming facilities, particularly hotels, pubs and casinos. Competition from pubs and casinos with gaming machines has increased significantly over the past five years. Despite these factors, industry revenue is expected to have increased at an annualised 2.0% over the past five years, with forecast growth of 1.3% in 2013-14. The robust growth over the past three years is expected to take the industry’s revenue to $10.5 billion in 2013-14. This is largely attributable to the strong economy and the shift of gaming machine revenue in Victoria from Tatts Group and Tabcorp to the venues themselves. Over the five years through 2018-19, tightening restrictions and regulations will continue to constrain the industry. “At the national level, there are plans to place voluntary precommitment technology on poker machines and limit ATM withdrawals in clubs,” says Lin. Increasing competition, uncertain economic conditions and other factors are also expected to take their toll on the industry over the next five years.
The Social Clubs industry has a low level of market share concentration, as there are no major players in this industry. The diversity of club types, such as sporting clubs and hobby clubs, prevent the build-up of any significant economies of scale as club patrons mostly favour clubs that appeal to their particular interests. While there has been some consolidation activity among the top operators, the majority of clubs are small and are owned and managed by members. Over the coming years, despite a fall in enterprise and establishment numbers, the level of concentration is expected to remain mostly unchanged, with the majority of clubs being independently owned and oriented towards the service of their local communities.
For more information, visit IBISWorld’s Social Clubs report in Australia industry page.
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IBISWorld industry Report Key Topics
This report includes clubs or associations in the gambling, sporting, social (such as RSL clubs) or recreational areas that generate income predominantly from the provision of hospitality services. Clubs that mainly provide sporting services, including racing clubs, are not included in the industry. The industry covers both licensed and unlicensed clubs and clubs that have gambling licenses.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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