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| Is The UK Gambling Industry In
Decline? |
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This summer sees the long-awaited publication of the UK government’s
white paper on gambling legislation. It is a
pre-cursor to what is expected to be a pretty extensive revision of the 2005 and 2014 Gambling Acts which set the framework in which the industry currently
operates.
The review comes at a time when the industry is under the spotlight for responsible gambling failings widely reported in the press where
problem gamblers have been allowed to rack up huge debts and spend far beyond their means without adequate checks being carried out by the operators they bet
with.
As an example, earlier this year 888 Holdings were
fined £9.4 million for failing to
carry out affordability checks on several gamblers, one of whom, an NHS worker, brought home £1,400 per month but was given a spend limit of £1,300
per month. The same fine also penalised 888 for anti-money laundering failings where the UKGC found that checks on source of income were inadequate to prevent
their site being used as vehicle to launder money from criminal activity.
In this context and with pressure on the government from the media, charities
and a powerful cross parliamentary group campaigning for wide reforms, the industry faces the following likely changes to its operational
boundaries:
- Affordability checks – mandatory checks on a customers’ income when they reach a pre-determined
level of spend. These checks may include submission of pay slips and bank statements, something which many gamblers may object to. It has not yet been made
clear what level the checks will be made at, but £100 per month has been mooted.
- Advertising Restrictions – an end to sponsorship of Premier League football teams and advertising on
TV during football matches is a real possibility.
- New stake limits on online slot games – currently it is possible to bet up to £100 or more per
spin. New limits could be set to £2 in line with offline Fixed Odds Betting Terminals.
- Restrictions on incentives to bet like free spins bonuses or deposit matches. This could extend to VIP
progams which have also come under the spotlight in the last three years.
Every one of these steps could hit the gambling industry where it really hurts by limiting spend by the
most valuable segment of customers, it’s VIPs or high rollers. Estimates vary, but some suggest as much as 60% of revenue is derived from as little as 5%
of customers. Not only would stake limits and affordability checks prevent consumers from spending as much as they have done, it may also drive them away from
licensed casinos and into arms of black market, offshore sites where there are no such restrictions.
All this, along with a traumatic economic outlook
for the near future, has led some to believe that the UK gambling industry is entering a period of decline.
Indeed, it may already be happening.
In November 2021 the Gambling Commission reported that there was a 5.4% decrease in the number of active gambling operators in the UK. Those who
regularly sign and play at the 1000s of white label casinos will have noticed a drop in the number of new sites as well. Review sites listing the latest offers
like the ones on this URL - https://allslotsites.com/new-slot-sites/ - show noticeably fewer newcomers.
Certainly, those businesses seeking to enter a market that was once a massive opportunity are not more cautious, particularly when the US and Canada are
opening up.
But whilst it is true that there are fewer new gambling websites that there were five years ago, it is still too early to call time for
online gambling in the UK. We should not forget that between April 2020 and March 2021 remote gaming still generated £6.9 billion in gross revenue and a
sizable tax revenue for HMRC.
In conclusion, it seems likely that revenues will decline over the next five years and the industry will need to adjust
to more regulation and lower expectations. But after things settle, we see sports and casino betting continuing in the UK for long into the future.
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