The UK’s Gambling White Paper Explained
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For the first time in nearly two decades, gambling is set to come under the legislative spotlight in the UK.
The UK gambling industry, the world's largest and most mature market, has been in a state of flux for the past few years. The growth of online casino games and the continued success of sports betting has seen gambling conquer and maintain new demographics of punters.
Since November 2020, however, the country’s government has been undertaking a comprehensive sector review. It is shortly due to publish its findings in a White Paper, which will likely shape future laws and potentially cause sleepless nights for operating executives.
The document could have massive implications for the £10bn industry, so it’s essential to understand what it could mean for operators and players alike.
What Is The Gambling White Paper?
In simple terms, it’s a lengthy document of policies that form the government’s proposed regulation of online gambling across the country.
It constitutes an update of the 2005 Gambling Act introduced by the then Labour government which established the rules for the industry before the introduction and proliferation of smartphone technology.
The paper will begin by outlining current regulations and propose policy changes for those offering gambling services in the UK. These will include, but not be limited to, ensuring consumers are protected, reducing problem gambling levels, making it easier to enforce payment regulations, and preventing money laundering.
Whitehall insiders contend that the paper could also ban ‘VIP packages’ on betting sites, pressure football’s Premier League to end teams’ front-of-shirt sponsorship from gambling companies, and legally force the hand of gambling operators to allocate 1% of gross yields to gambling harms care; the equivalent of £140m a year. These changes can potentially alter the entire industry, from how people see gambling advertised to how users gamble online, and even when it comes to comparing the best online casinos.
Checks and Balances
Indeed the most significant and complex issue the White Paper is looking to tackle is to monitor the fine line of spurring gambling to the point it becomes problematic. Some measures to achieve this include introducing a cap on online slot game stakes between £2-5 and £125 on monthly losses or £500 on annual losses, measures that will directly impact operators and affiliates.
The most controversial element, rumored to still be in the debate among MPs, is the ‘affordability check.’ Though details remain unclear to date, it is suggested that certain would-be punters deemed to be gambling excessively could have to submit financial information including bank statements, payslips, and P60s, before being allowed to play.
In an opinion editorial in Politics Home this month, former Labour MP-turned-CEO of the Betting and Gaming Council, Michael Dugher, described the checks as “intrusive” and “low-level.”
“The millions of punters who enjoy a bet perfectly safely and responsibly are rightly hostile to the introduction of blanket, intrusive, low level so-called ‘affordability checks’ – such as those demanded by anti-gambling prohibitionists,” he writes. “We support big changes in the White Paper, including using technology to support enhanced spending checks online, but we think these need to be background financial risk checks and that they need to be carefully targeted towards problem gamblers and those at risk.”
Dugher also claims that, ironically, the checks would drive bettors away from established bookmakers onto the so-called ‘black market’.
Indeed, a February survey of 3,500 members of horse racing news outlet, Racing TV, found that 15% said they bet or knew someone who bets with an unregulated bookmaker.
In addition, another 80% said they would not like to see mandatory limits imposed by bookmakers. In comparison, a shocking 92% said they would consider a different bookmaker which did not require personal information before customers were allowed to bet.
Somewhere down the line, affordability checking in some format seems inevitable. A study in 2019 shared with The Guardian showed that a relatively small fraction of customers is responsible for most deposits with online gambling firms – 83% of deposits were from 2% of customers in one case.
In real terms, a 2021 parliamentary report found that three-fifths of industry profits come from 5% of users who are either problem gamblers or at risk of becoming so, according to a 2021 parliamentary report.
That said, a Gambling Commission study showed that about 0.2% of British adults were problem gamblers in the year to March 2022, with moderate and low-risk gamblers numbering 0.9% and 1.4%, respectively.
What’s Next?
Another hurdle is that the checks are very hard to implement properly in the United Kingdom, where many laws protect players’ privacy.
As a result, the parliamentary process to exhume problems from the proposed checks will click into gear after the paper’s publication, with consultations expected from operators, banks, the Gambling Commission, and the Information Commissioner’s Office, the data watchdog.
Industry figures like Dugher’s concerns around what may change for the industry are with good cause, however, as the market has already shown to be especially vulnerable to legal process changes.
In 2020, a sector-wide £1bn share price plunge was triggered due to a late-2019 recommendation from a cross-party MP group to impose maximum stake limits on fixed-odds betting terminals.
And, while trying to responsibly keep profit and player numbers on the up at home, many bookies are pushing resources into a second frontier; the US.
The world’s second-largest gambling market is, in part, relaxing as more states begin to alter their law to allow online casino play and sports betting. While some remain resolute that gambling will remain illegal for the immediate and long-term future, UK-based operators are keen to maximize the potential returns involvement in the US could bring.
Hyperbole aside, the coming months and years will be transformative for the UK gambling industry. The long-awaited White Paper has been delayed and is now slow-cooked to set law protections for players to avoid addiction and potential financial ruin.
What remains to be seen is how restrictive the measures will be, if operators can retain and entice new players while adhering to the government’s ruleset, and whether gamblers will continue to play by their rules.
This article was produced and syndicated by Wealth of Geeks.
