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UK gambling lawyers and executives fear proposed player affordability measures and wonder whether such restrictive measures are a “sign of things to come” for the rest of the world’s gambling industry.
The average punter would undoubtedly agree gambling companies should ensure that bettors can afford their bets, panellists said, but experts argue that gamblers baulk at having restrictive measures such as producing bank statements and payslip stubs applied to themselves.
“Everyone thinks it sounds OK, for someone else,” said lawyer John Hagan, a partner at Harris Hagan. “When it involves yourself it’s quite different.”
Flutter executive Simon Bernholt summed it up as: “Affordability for thee, but not for me.”
The panel debate came on Friday (September 16) at the International Masters of Gaming Law (IMGL) conference in London.
Early adoption of expected safer gambling restrictions have already pummelled profit for UK-focused online gambling operators and a potential requirement for affordability checks is considered by many to be the most challenging to manage.
A long-delayed white paper that will precede a restructuring of the country’s gambling laws has been pushed back again, to the end of this year or beginning of next year.
But the prospect of intrusive affordability checks, a measure meant to protect gamblers from harm, seems to be the one that makes the gambling industry most uncomfortable.
Affordability checks could be seen as a curb on liberty and privacy, panellists said.
Such checks would force operators to make judgements “we would argue are not appropriate for a gambling company”, Bernholt said.
Media leaks from draft white papers suggest that the government is contemplating “soft” affordability checks at gambling losses of £125 per month and £500 per year, and more rigorous checks at £2,000 per year, levels which Hagan said would impose “considerable friction” on betting habits.
But others pointed out that there is a new minister at the Department for Digital, Culture, Media & Sport, and a new Prime Minister, Liz Truss, so the white paper could easily change drastically before it is released.
Potential staking limits on online slots were deemed less of a problem.
Media leaks suggest limits could be set at £2 to £5 per spin, with limits of £10 to £25 per spin for those who undergo affordability checks, said attorney Niki Stephens of Mishcon de Reya.
Ian Ince of Playtech said its data suggests that such limits would not have much impact on the overwhelming majority of the UK industry because most slots stakes are quite low.
Flutter has already voluntarily applied £10 per spin limits to its UK players, Bernholt said.
Expected regulatory restrictions have already hurt UK gambling profit.
Flutter’s UK and Irish first-half revenue dropped 4 percent even as total revenue grew 11 percent. The company said it expected a £48m hit this year from UK safer gambling measures it has implemented in advance of the white paper.
Across the Atlantic
One gambling company called the UK's tight market restrictions "the acid test" that could help them survive challenges elsewhere.
Last week, Kindred Group told investors and analysts that its success in the hotly competitive UK market suggests that it can succeed in any regulated market.
The claim was part of the Stockholm-listed company’s presentation on how it planned to succeed, gradually, in North America, even though its performance has not been stellar so far.
Although its market share in the UK is only 3 percent, it is profitable there and its growth exceeds that of the market, Kindred said.
“If we can make it here, we can make it anywhere,” one executive promised.
The US online gambling market has grown so fast from 2018 that in the first half of 2022, the US as a whole surpassed the UK online gambling market, making it the world’s largest regulated market for the first time.
However, the US is made up of more than two dozen state-regulated jurisdictions, which means the UK is still the biggest single market and regulatory jurisdiction.
But the fun in America may not last, according to the IMGL panellists.
Hagan said the US market is currently full of excitement, opportunity and a tax windfall for many states.
“That’s where the party is. In the UK, that’s where the hangover is,” he said. In the US, “the hangover will follow”.
Ince said the proliferation of gambling ads in the US is sure to cause trouble in the long run.
“There will be a backlash against gambling, it will come as sure as night follows day,” he said.
