Financial Betting: UK Traders Play to Win

Celent projects that financial betting will grow 26% per year through 2010 with strong growth from Asia and continental Europe.

While spread betting, contract for difference (CFD) trading, and binary betting get quite a lot of press, Celent estimates that there are currently only 125,000 active financial bettors, and 425,000 individuals with financial betting accounts globally90% of whom are based in the UK. However, Celent estimates that financial betting will experience explosive growth in Asia, and CFD trading, in particular, will become much more common in continental Europe.

As the table below shows, the financial betting industry is poised to grow at a CAGR of 26.33% between 2005 and 2006:

In a new report, , Celent provides an overview and analysis of key trends affecting the industry, identifies leading industry players, and discusses the future direction of this niche segment of the global retail brokerage market.

"One of the main drivers of growth is the lack of volatility in the traditional financial marketswith financial betting instruments such as binary bets, active traders can create a volatile situation with constantly changing prices and odds, even if the underlying market only moves slightly," says Lauren Bender, senior analyst in Celents Securities and Investments group and author of the report.

"However, the upcoming MiFID regulation in Europe has several articles that pose a threat to the business models practised by some financial betting firms today; firms will need to clarify and modify their business models in order to make MiFID work in their favor both in the UK and in continental Europe, "she adds.

Even in the current regulatory environment, Celent expects to see impressive growth in the industry, as firms are rushing to set up in Singapore and Australia to take advantage of the regulatory environments there.

Leading providers covered include CMC Markets, IG Index, City Index, Finspreads, Cantor Index, Man Spread Trading, E*Trade, Betfair, and Ladbrokes.

The primary geographic areas covered in the report are The United Kingdom, Australia, and Chinese-speaking Asia.

The 52-page report contains 12 charts and 8 tables. A table of contents is available online.

of Celent's Retail Securities & Investments and Retail Banking research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.