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  • The UK Gambling Industry: Change (Under New Management) or Decline?

    The UK Gambling Industry: Change (Under New Management) or Decline?

    By Luke Haward, CDC Gaming Reports

    October 3, 2018


    The cartoon version of the UK gambling industry probably would have it as a naughty schoolboy who knows he’s done wrong, fearing a severe punishment from the new headteacher. But an alternative might be a dinosaur, set in its ways regardless of environmental changes.

    As we consider the possibility of a Labour government for the UK, we can foresee changes across all industries in some form or another. But what the gambling industry essentially fearsare interventions from a higher authority which will curb its ability to make the current returns, or to achieve growth.

    Certainly over-regulation can be a problem. Every regulation is essentially a hurdle, with compliance often time-consuming and restrictive to profits. A second possible intervention – a higher rate of tax – will sting, though this is likely to come about regardless of how the next government is constituted.

    Labour have put their voice behind a call for a mandatory levy for a fund for preventing and treating problem gambling, suggesting it be set at 1% of gross gambling yield (GGY), although some pundits believe it will go higher than that in the full course of events. Most large operators are on record as noting that they could accept a mandatory levy up to this amount, but beyond such a level it could get dicey. Then again, 1% is already ten times the level of 0.1% which charity GambleAware has requested, a level that all major operators are currently meeting.

    Labour have also called for a ban on credit card transactions for gambling, and furthermore a ban on TV pre-watershed gambling ads during live sports events, though they not yet proposing a total ban on sports sponsorship.

    Deputy Leader of the Labour Party Tom Watson, at the conclusion of a year-long Labour study into problem gambling, announced that “problem gambling is Britain’s hidden epidemic and we must treat it as a public health emergency.” Further measures might include a service whereby problem gamblers can instruct their banks to block online gambling transactions, and a range of enhanced resources for gambling addiction treatment.

    Bookmakers have already seen a drastic limitation on stakes for the badly-regarded fixed odds betting terminals (still, however, this is not yet in practical effect), and numerous high profile penalties for failures in customer diligence, anti-money laundering, breach of advertising restrictions which protect children, and more. Recent scandals include junior football club gambling ads on websites and shirts, and this week news reports highlighted a site reportedly offering bets on the obviously illegal sport of cockfighting.

    It must be granted that certain parts of the sector have sadly invited further regulation, even beyond what has already been seen in new upgraded measures from the UK Gambling Commission. What’s needed now is to meet the regulators more than halfway – for surely their intention, even if overreaching in practice, is to limit the harm of gambling, and that is surely a noble and important goal for the industry itself to seriously adopt.

    Perhaps the sharp slap of regulation may wake up some key industry players to the opportunity of doing something better and more sustainable. Culture is changing quickly, technology still faster, and the player pool and their interests are also nowhere near static.

    One direction which could bring good would be limiting the spend per session. Another good direction would be simply to have better player monitoring and better training for staff in handling problem gamblers. But I feel that the industry should go further than these steps, partly to lend more purpose to gaming itself. One possibility is with skill gaming, already most appealing to the millennials, and clearly a growth area.

    The industry will have to navigate how it brings skill into game design, whilst ensuring it does not appeal to underage players, but giving players more control over outcomes, based on their skill, provides a learning opportunity to improve play, as in poker. The industry will have to navigate how it brings skill into game design, for example ensuring it does not appeal to underage players. But skill gaming will play its part in the maturing of the gambling industry.

    A second aspect of adding purpose to gaming has to be charity. Operators needs to look out for their societal impact, both by limiting the negatives for individual players, and by adding to the public good, nationally and internationally, through giving back on a much larger scale.

    The firms who keep up, and thrive long-term, will be the ones who act in the best interests of their players and the wider world, even when it means that short-term profits take a hit. For the industry to become healthier, and to bring greater good to its participants, a redesign is needed. Unfortunately, firms in the industry are not purposed to that end at the moment. Not many corporations are. But gambling exists within a heavily regulated environment. Firms that do not anticipate change nor try to shape themselves to do well within a changed – and politically responsive – environment are likely to find themselves threatened species.

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