The UK gambling industry is under intense scrutiny in 2020. The media and politicians are accusing operators of failing to fulfil their responsibilities to tackle the growing issue of problem gambling. In the next 12 months and beyond we can expect to see some radical changes that will affect how casinos and sportsbooks take bets and how they treat their customers. In this article we look at some of the proposed changes and how the landscape might look in years to come.
Problem Gambling in the UK
The UK Gambling Commission reports that 0.7% of people over 16 years of age are classified as problem gamblers. This is an issue which effects both on and offline and a movement is now very much in place to clean up the exploitative side of the business.
Until recently the focus has been on high street bookmakers, and the scourge of Fixed Odds Betting Terminals (FOBTs), video roulette machines that had allowed gamblers to spend £1000s a day. In April 2019, in a high-profile change to the law, the maximum stakes available at FOBTs was reduced from £100 to £2. This has led to the closure of many bookies by big names like Will Hill who were dependent on the revenue from these machines even more than they were from revenue from sports bets in those shops.
Now, attention is turning to online, with the UK media reporting on cases of gamblers who have lost huge sums of money and suffered mental health problems as a result of their addictions to slots and casino games.
In April 2019 The Guardian reported on a case of a woman who lost £125,000 playing with Casumo and Leo Vegas, including an overnight spree in which she lost £54,000, and spreading her losses over nine credit cards.
Pressure is on not just the operators to take action to identify addictive behaviour and step in to disable accounts, but the UK Gambling Commission too.
In November 2019, The Gambling Related Harm All-Party Parliamentary Group (GRH APPG), published a report claiming the UK GC was ‘not fit for purpose’ and failing in its duty to protect vulnerable people and children from exploitation by gambling companies, and to stop criminal enterprise from using gambling sites to launder money.
Upcoming Changes to the Online Gambling Industry in the UK
The heat is most definitely on the industry and big changes are on the horizon. Here is what we can expect to see in the coming months and years.
- A Ban on Credit Cards For Online Gambling
As of 14thApril 2020 it will no longer be legal for gambling operators in the UK to take deposits via credit cards. That applies to both casinos and sportsbooks. It is estimated that 22% of gamblers who make deposits with a credit card are problem gamblers. The ban also encompasses deposits made using a credit card via eWallets like Paypal or Neteller.
On the announcement, Neil McArthur, the Gambling Commission’s chief executive, said: “Credit card gambling can lead to significant financial harm. The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have.”
- Mandatory Membership of Gamstop for Operators
The UK Gambling Commission are also planning to make membership of Gamstop, the nation-wide self-exclusion scheme for players, a condition of a license to operate. The scheme which suffered a series of set-backs since its original launch date in 2017 is now seen as another effective tool in the fight against problem gambling.
- Review of VIP Incentive Programs
Another area under scrutiny from MPs is the use of VIP programs by operators to reward high rollers and re-activate dormant gamblers who haven’t played in months. Time and again recovering addicts have referred to instances where they were encouraged to keep betting by multiple bonuses and free bet offers which served to prolong and aggravate their addiction.
A review of VIP programs is expected in the near future, with new guidelines for operators to follow.
- Reduction in Maximum Stake for Online Bets
Following the example of Fixed Odds Betting Terminals (FOBTs) in the offline sector, it is being proposed that a new maximum stake is applied to all bets on casino games, including video slots. The proposed value is £2. This is a big change as many games, and most slots, have maximum stakes of £100 or more. The aim would be to reduce the speed in which a player can lose money.
There is a lot of opposition to this proposal and operators claim that players will simply move to unlicensed, unscrupulous casinos where they can stake much higher values when they play. The reality is that a change like this could have a big impact on the revenues of betting firms who rely on big spenders playing big stakes to make profit.
- A New Gambling Act and the It’s Potential Impact
Speaking recently after the announcement of the ban on credit cards for gambling online, the culture minister, Helen Whately, said: “We will be carrying out a review of the Gambling Act to ensure it is fit for the digital age and we will be launching a new nationwide addiction strategy in 2020.”
The online gambling industry in the UK is worth over £5 billion, accounting for over one third of gross gaming yield as a whole, and contributing a tidy sum to HMRC. However, it seems that even a right-wing tory government are not going to allow gambling firms to continue unchecked. Indeed, it seems very likely that all the proposals mentioned in this article, and more, will be brought together in a new Gambling Act during this parliament’s 5-year term.
The 2005 Gambling Act, passed under Tony Blair’s government, laid much of the foundations for the industry as it is now, but new legislation will be much tougher and will likely initiate a period of upheaval as operators decide whether continuing to take bets in the UK is a worthwhile strategy.
Already in recent months we have seen some small white label brands pull out of the UK market, perhaps in anticipation of the upcoming changes. Royal Panda, owned by Leo Vegas, Midaur, The Bear Group (Slingo.com, Spin Genie), Ikibu and Rolla Casino, who only opened recently, have all closed their doors to UK customers. Whilst these are relatively small businesses, the signs are there that the proliferation of white label sites may be coming to an end.
Whatever happens in five years time the landscape could look quite different to how it does now, hopefully achieving a balance between fair and safe gambling and the freedom to enjoy a good bet.
Keep up to date with the latest changes in the UK Gambling Industry at TheSlotBuzz.com.