Government poised to cap online casino stakes
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According to The Times, the government - which is seeking to address gambling addiction - will announce maximum stakes of between £2 and £5 for online casinos, a ban on free bets and VIP packages for people who incur heavy loses and "non-intrusive" affordability checks.
A new ombudsman will also be set up, and the Gambling Commission, the regulator, will be given new powers and additional funding via an increase in the fees paid by the industry.
However, plans to ban gambling firms from sponsoring Premier League football teams have been dropped, as has a proposed mandatory levy that would fund research and treatment of gambling addiction, The Times said.
A spokesperson for the Department for Digital, Culture, Media & Sport said the White Paper would be published as part of a review of gambling legislation "in the coming weeks". They declined to comment on The Times article, however.
The UK is one of the world’s biggest gambling markets, but campaigners are increasingly concerned about its impact on sport and on mental health. A study by Public Health England last year found that an estimated 409 suicides were linked to gambling every year in England, with harms associated with gambling costing £1.27b in 2019-2020 alone.
The government has been under concerted pressure to address the issue, and in 2020 announced a wide-ranging review of the 2005 Gambling Act.
The Times said the government believed online gambling revenues could fall by as much as £700m if its proposed measures are introduced.
But Greg Johnson, analyst at Shore Capital, said: "Overall, if the body of the article is broadly correct, we would see this as a potentially better outcome than feared for the industry and positive for stocks, albeit the devil will be in the detail.
"Using that [£700m decline] as a base level, and applying a 40%-50% drop-through rate, we estimate this could impact profitability for Flutter Entertainment, Entain and 888 Holdings by around £100m, £50m and £40m respectively, at the better end of expectations."
Numis said: "We are not expecting the White Paper to be published for another week or so, but if this is accurate, the key relief will be in non-intrusive affordability checks. We are not expecting monthly deposit limits - we think that a £200 monthly deposit limit would have reduced the size of the market by around 30%.
"We think a £2-£5 online casino staking limit could lead to mid-single impact on revenue and higher single digit impact on earnings before interest, tax, depreciation and amortisation, the most impact being 888, although many of the operators have already voluntarily lowered limits to £10."
As at 1315 BST, share in William Hill-owner 888 were ahead 6% at 176.8p and Flutter was up 1% at 8,580p. Entain was largely flat at 1,306.5p.
The White Paper will also propose relaxing regulations for bricks and mortar casinos, The Times noted, including increasing the number of gaming machines and permitting credit to be extended to foreigners. The aim was to "level the playing field" with online casinos, the newspaper said.
