The Implications of the UK’s Gambling White Paper for the Industry
Earlier this year, after close to three years of waiting, the UK government’s long-awaited Gambling White Paper was finally published. It comes 15 years after the last gambling review, and there are few who would challenge its necessity. The gambling industry has undergone significant transformations in the last decade and a half, in particular the rise of online casino UK mobile platforms, and many would argue that the current regulations are not fit for purpose. The White Paper includes several recommendations and has sparked diverse reactions across the industry. Here we shall take a brief look at the implications of the changes it calls for.
Initial Responses to the White Paper
Needless to say, the response to the proposals has been mixed. While gambling welfare charities argue that the measures don’t go far enough in addressing the risks associated with gambling, some operators have countered that the changes might adversely affect the entire betting industry, instead of targeting specific contentious issues.
Affordability Checks and Betting Limits
One of the most notable and controversial proposals in the White Paper is the introduction of affordability checks. A player that loses £1,000 within 24 hours or £2,000 over a period of 90 days will have to go through a detailed affordability check. Furthermore, operators will have to carry out “passive” checks on players who lose more than £125 each month or £500 per year.
However, a petition opposing these checks recently surpassed the 100,000 signatories mark and as such it will be discussed in parliament. The petition is calling for the abandonment of the idea of affordability checks as the current proposal creates the risk of “inappropriate and discriminatory” checks based upon the player’s postcode or job title.
Another contentious issue is the introduction of betting limits for slots. It was suggested that the limit should be between £2 and £15 per spin with lower limits for new accounts and players under the age of 25.
The Financial Ramifications
If the above recommendations are introduced unchanged, then there is little doubt that revenues will be affected. Government projections suggest a potential revenue decline of 8-14%. In other words, a huge amount of money will wiped from the industry. For example, Flutter said that the proposals could impact its revenues by between £50 million and £100 million.
Furthermore, it seems highly likely that investors will look to other markets. The gambling industry is currently surging ahead in the US and Canada, with more and more US states legalising some form of gambling. This trend is expected to continue over the coming years and betting revenue across the pond is already massive.
Black Market Fears
Some in the industry have expressed concerns that the betting limits and the invasive nature of affordability checks will drive players to unlicensed websites. This of course means that they will not benefit from the player protections that operators are required to implement under UK law and that the UK will not be earning any tax revenue from their activities.
Andrew Rhodes, the Gambling Commission CEO, believes that these fears are overstated and he is dismissive of concerns raised by industry stakeholders. However, similar betting limits were introduced in Germany a few years ago and a study published last week found that nearly half of all online gambling activity in the country takes place on unlicensed sites.
An Uncertain Future
There is no doubt that significant changes are coming to the UK’s gambling industry. The recommendations still require governmental approval and it is looking increasingly likely that Conservative government is on its way out, which add further layers of unpredictability. As such, operators may temporarily shift their focus from the British market, given the current regulatory climate and the attractive opportunities in other jurisdictions. There is still great debate going on around many of the issues, as demonstrated by the petition on affordability checks, so for now, all that players and operators can do is keep a close eye on the situation.