Monday June 8, 2020 - 10:53:46 GMT
Global-View.com - www.global-view.com
Share This Story:
|
|
Email
Why New Regulation Could Squeeze Out UK Gambling Firms
After many years of unprecedented growth in the gambling market UK betting firms are facing an uncertain future. Until now regulatory conditions laid out in the 2005 and 2014 Gambling Acts have allowed companies to flourish, with Gross Gambling Yield topping £14 billion annually, much of it from the online sector in which thousands of betting sites and online casinos operate.
However, over the last decade calls for reform of the industry have been growing louder. Some sections of the media and a group of MPs in parliament are reporting on an epidemic of problem gambling driven by easy access to betting sites and pervasive advertising on TV and social media. Critics say the current context has ‘normalised’ betting and exposed children and vulnerable adults to advertisements at all times of day, 7 days a week.
The movement for reform is gathering pace and a new Gambling Act is widely expected to be passed soon. A parliamentary commission investigating the social impacts of the industry will report on its findings this summer and propose far-reaching reforms that could have a huge impact on the opportunities for casino and sportsbook sites to advertise and take bets in the UK.
Proposed new regulation will impact the operations and marketing functions of these businesses.
In particular reformers are demanding tighter restrictions on how much a gambler can spend. These will come in the form of a cap on stakes on casino games, and a limit on how much each customer can deposit every week or month. Currently is it possible to stake as much as £100 per spin on slots games at online casinos, and deposit £10,000s every week. It is expected that the new regulations will cap stakes on slot games at £2 and weekly deposits at around £500. These restrictions will hit betting firms where it hurts by limiting the spend of their most valuable customers.
Back in November 2019 shares in gambling firms fell sharply when the £2 stake limit was first proposed.
In addition, operators will be monitored much more closely to ensure that they are not exploiting vulnerable problem gamblers. Betting firms will be held to account if they do not do enough to recognise addictive patterns of spend and close down those customer accounts. They will also have to remove loyalty schemes aimed at VIP players as they are seen as too predatory.
But it won’t be just the operational side of these businesses that will be hit. A new Gambling Act will introduce much tougher restrictions on where, when and how brands can be advertised. The ubiquity of gambling brands at sports grounds and in ad-breaks between every big sporting event on TV is seen as a big driver of problem gambling, whilst ads on social media are criticised because they are unfiltered for under 18s and problem gamblers. Reformers want to cut the amount of ads on TV, remove them from sites like Twitter and cut advertising of specials like in-play betting.
If, as expected, these proposed changes become law, then we can expect a big change in the UK market. Currently it supports thousands of businesses, from big online sportsbooks like Bet365 and global casino brands like 888, to small, specialist affiliate marketing sites like The Slot Buzz. Each of them will find it hard to adjust to a new playing field. In fact, we are already seeing a shift in focus as these businesses look to offset expected losses in the UK by cashing in on the new frontier of regulated gambling in the US. In the last 12 months we have seen GVC, owners of the Ladbrokes-Coral brands, strike a deal with MGM, whilst their big rivals, Paddy Power Betfair buy Fan Duel who have already established themselves as a big name in Fantasy Sports.
So, whilst one door seems to be at least partially shutting – there will always be a gambling market in the UK, if a less lucrative one – another one is opening across the Atlantic. And we can expect a period of adjustment in the value of betting businesses as these changes play out over the next five years.
Forex Trading News
Forex Research
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
here.
Forex News
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
We are starting an affiliate program to market some of our products.