What the Future Holds for the UK Gambling Industry With New Laws On The Horizon
The United Kingdom gambling industry has been on quite the shaky ground recently, thanks to the decisions made by the government with regard to certain cuts and proposed changes. And while some of those changes have come into effect, others may be waiting in the wings, potentially bringing even more chaos to an unsettled landscape.
So, what exactly does the future look like for the UK’s gambling industry?
FOBT Stake Restrictions Already In Force
As anyone who resides in the UK will know, the gambling industry within the country has been one of the most liberal in the world for a long period of time. Yet, it was only last year that a motion was passed to reduce the maximum stakes possible on fixed odds betting terminals (FOBTs) to £2.
These machines are often found within land-based bookmakers’ shops, and prior to the introduction of that law, gamblers in the UK were able to place maximum stakes of £100 per turn. Many gambling operators rallied against the law becoming operative, stating that it would most likely mean the closure of many land-based establishments providing the machines, and in the process, the loss of multiple jobs around the country.
This was of little use though, as the government pressed ahead with the reduction, spurred on by anti-gambling campaigners, who stated that they were partially responsible for the rise in problem gambling within the country. Within months after the law was brought into effect, companies such as William Hill reported a loss in earnings from their land-based stores, which did result in the closure of several branches. Fortunately, all of the UK’s brick-and-mortar bookies tend to have online operations as well, although this could soon be under threat as well.
MPs Move Towards Stake Limits For Online Slot Games
The UK’s cross-party group that focuses on gambling-related harm, which includes the former Conservative party leader Iain Duncan-Smith, is said to be hopeful that it can also convince the government to incorporate tighter controls on the internet gambling scene as well. It was this party that was behind the reduction in maximum stakes on FOBTs, and they are now looking to have those same limitations applied to online slot games.
An election is also coming up in the UK on Dec. 12, although it does seem that changes are planned for the gambling industry whatever the outcome of that is. The Labour party has already backed a tougher regulation of the country’s gambling scene, meaning that it’s highly possible that it will become a much stricter scene regardless of which party wins.
Of course, if the proposals to reduce the maximum stakes on web-based slot machines for UK players were adopted, it would threaten the revenue (and subsequently the amount of tax that the government takes) of the online casinos providing such games. Slots tend to contribute over one third of casino sites’ income, according to the United Kingdom Gambling Commission (UKGC). Following the news that various MPs were pushing for such rules to be included in UK legislation, the value of shares in UK gambling firms fell by almost £1.2 billion, as online casino games are worth more than £2 billion every year.
Should the move also incorporate other casino games, like blackjack and roulette for example, then the £2 billion figure would rise to £2.9 billion. After the mass sell-off of gambling stocks that took place after the revelation of potential reductions in maximum stakes on online slots, the casino firm 888 found that it was hit the hardest. This brand lost 14% of its value in just one day, cutting its market value by a huge £91 million.
Ladbrokes owner, GVC also suffered a huge impact, falling by 10.5% in value, meaning that it lost £547 million overall. And others weren’t far behind either, with William Hill registering a £230 million decline, Flutter Entertainment (which is responsible for Paddy Power Betfair) losing £217.5 million in value, and GameSys (an online slot game developer) losing £78 million.
VIP Schemes Targeted Along with Card Payments
Credit cards have also been targeted by the cross-party anti-gambling group, which says that this provides an easy way for gamblers to get into debt. MPs have been moving towards the banning of credit cards being used at online casinos and other gambling sites in recent months. And even a poll of players done recently suggested that most gamblers are behind such a ban.
Yet, it doesn’t end there, because VIP schemes have also found themselves in the party’s crosshair. These are said to be one of the main causes of gambling problems in the UK, thanks to the fact that they offer huge rewards for players who deposit large amounts and play games frequently. In a bid to make gambling safer, MPs have suggested that these should not be made available to anyone identified as being at risk.
Upcoming Election Possibilities
As noted, Labour has already backed various calls for a stricter gambling industry in the UK. In its manifesto, the party has said that it will address the adverse impacts of gambling as a matter of public health, alongside drug-related deaths and alcohol-related health. It went on to say that a Labour government would curb gambling advertising in sports and introduce a new Gambling Act fit for the digital age, establishing gambling limits and a levy for problem gambling funding. These policies would, of course, require additional changes to the current legislation in place, meaning that extra limits could be imposed on gambling overall.
Meanwhile, the Liberal Democrats have promised a new tax on gambling companies in order to treat problem gambling issues, although further details on that have not been released.
The Conservative party has also promised to review the current Gambling Act, to make it more suitable for the digital age, but also with more of a focus on tackling issues around loot boxes and credit card misuse. It also promised to take action in order to tackle gambling addiction, although again, there was little information on exactly how the Conservatives intend to go about this.
The Brexit party and the Green party haven’t placed much of a focus on the gambling industry during their respective campaigns, on the other hand.
The Future Is Changing
It seems as though regardless of which party wins the 2019 Election, changes are afoot for the UK gambling industry. It seems highly likely that betting limits will be imposed on at least one more area of gambling, and with the way things are moving right now, it seems as though the online slot sector will be on the receiving end. That could cause massive downfalls for the casino industry in general, considering that they make so much money from slot games.
Additionally, it’s quite likely that credit cards will be banned from being used at online casinos sooner or later. With this being a policy that is backed largely by the average gambler, there’s very little that would stop the government from really considering this and pushing it through.
While it’s true that the parties seem to be looking at doing all of these things as a way of curbing gambling addiction in the UK, they can’t really guarantee that this would be the outcome of such moves. Additionally, if shares in gambling companies have already fallen so dramatically with the announcement of just the suggestion of reducing the maximum stakes on online slot games, one can only imagine what will happen once such laws are passed and brought into effect.
