In the midst of the deepest financial crisis for 300 years according to Bloomberg, following the impact of the global COVID 19 pandemic, it appears that Prime Minister Boris Johnson is embroiled in a bid for a widespread reform of the UK gambling industry.
Not since 2005 when the labour Prime Minister Tony Blair, introduced the Gambling Act which regulated the industry, has there been any suggestion that there could be any further or dramatic change to it.
However, with mounting pressure from charities associated to Responsible Gambling in recent years as gambling addiction cases rise throughout the UK, it appears that a substantial overhaul could well be in the offing.
It could well be seen as a surprise that both Downing Street and Whitehall have taken a serious interest in this, particularly considering the amount that the UK government makes from gambling tax every year, which according to Statista was close to £3 billion for 2018-2019.
Of contributing concern of which is also said to be having an influence on a reform of the 2005 Gambling Act is the activities related to advertising. Although this has tightened up in recent years, the UK government does not believe enough is being done by the ASA (Advertising Standards Authority) to prevent gambling companies from finding loopholes.
This is especially related to the fact that firms have now started to partner with sports teams, having identified what they realised was a perfect channel to advertise their brands, based on the audience numbers that see their company whether they are in a stadium or watching on television.
While the ASA banned gambling companies from advertising before the 9 PM watershed on television to crackdown on underage gambling, many sports games are broadcast during an afternoon. Although this may not be seen as direct advertising, the fact that some teams have some gambling sponsors emblazoned across their shirts. Bearing in mind that underage viewers watch sports games, it is clear that the government has a point.
The main governing body for this is the DCMS (Department for Culture, Media, and Sport) who essentially police such activities.
House of Lords & APPG Push For Gambling Act Reform
While discussions about a reform to the Gambling Act are still at an early stage, there have been a number of suggestions that have been laid as per the minutes from preliminary meetings. Below are just a few of some of the main areas which have attracted particular focus, where authority figures have deemed the most necessary for change.
- Stake limits for all online slot content which is no higher than £2 based on the possibility to cause potential harm.
- Longer periods between spins on slot games.
- A proposed blanket ban for VIP programs and enticements.
- A complete ban on all advertising relating to gambling activity.
- A total revamp of gambling legislation in the UK (there are implications that the UKGC – UK Gambling Commission is essentially redundant).
- Deposit cap for new customers until affordability can be confirmed.
- More active monitoring of customers.
The aforementioned All Party Parliamentary Group (APPG) on Reducing Harm Related to Gambling at Stormont completed an in-depth analysis over the summer of 2020 into online gambling with the proposed outcome viewed as very demanding.
Imagery In Games
Further changes to the Gambling Act, could well include drastic changes to how slot games are allowed to be designed. Currently, the software providers who design and develop the slots, know that bright, colourful imagery plays a considerable role when it comes to attracting players, in addition to the audio used in slots which can convey a sense of euphoria to players when they win a small amount, even though overall, the likelihood is, that they are still losing.
Exploring further into detail, changes to imagery used in slots is highly likely to come under a considerable amount of scrutiny in an attempt to reduce the attraction for those with clear gambling addiction.
UK Gambling Credit Card Ban
At the beginning of 2020, initial indications that there was going to be a major shake-up in the gambling industry began when the UKGC banned all UK gambling firms from offering credit cards as a payment option for gamblers, in a bid to help reduce debt levels among problem gamblers.
This was implemented in March and it was in response published by the Gambling Commission in July 2019 that an estimated 430,000 people in the UK were living with a gambling addiction.
Gambling Firm “Bribe” Brand
A report in the Guardian in June 2019, illustrated how the UK’s top five gambling firms were prepared to increase funding to help gambling addiction, six-fold to £60 million per year, however, this was subsequently branded a bribe by the Scottish National party MP Ronnie Cowan to keep opposition at bay and also prevent further action.
Cowan said in response to this:
“It’s a bribe to appease campaigners and the UK government against introducing a statutory levy for education, research, treatment and support.
“The problem of gambling-related harm is here and now and we need a continuity of supply – staffing, budgets, and treatment to be guaranteed and this can only happen with a statutory levy.”
Terms proposed at the time by the top five gambling firms indicated that they would be willing raise the voluntary levy that they pay from 0.1 percent to one percent over a five year period.
The Potential Impact Of UK Gambling Reform
Depending on how strict any proposed reform is and whether it does get passed, there are many different implications that this could have, not just economically but also from a social perspective as well.
If there are measures that are implemented which are as extreme as preventing gambling brands from being able to advertise and form affiliations with sports brands (such as football clubs), because many of these have been in place for a considerable amount of time already, it is unlikely to make too much of a difference on the majority of people. Where it might have an impact in terms of new registrations, is with a younger market over the next five years who may just have been introduced to sport at key life changes, such as joining university and being in different social circles – obviously, this is currently the legal gambling age.
This leads on to the next point. Could there be an increase in the legal gambling age in the UK? If so, this could well have a negative implication for gambling brands, who arguably have a fixed percentage each year of those who are “new gambler’s” of the allowed age.
A potentially unprecedented situation is if there is a blanket ban on advertising in the UK for gambling brands (via the traditional methods). This would again mean that gambling companies would have to further innovate to make sure that they can still get their message across, especially when it comes to new offers and promotions.
As we have seen in recent years, sophisticated advancements in technology have had a considerable impact for gambling companies, offering them more methods for them to spread the message. It could mean that they again have to follow this route.
Total, widespread advertising restrictions are unlikely because the gambling industry is one of the government’s main sources of income, in terms of taxes each year. If this were to happen, it could mean that the major gambling brands completely pull out of the UK market and move to the more relaxed European (or even up and coming American and Canadian) markets.
Bet365 Conundrum?
While the sponsoring of sports teams is currently still allowed for gambling firms, if this all of a sudden does become the subject of a ban, then it could pose an interesting question for one particular UK based gambling company. The 2019/2020 Premier League football season saw 10 football clubs displaying gambling advertising on their shirts, which rose to 17 in the Championship, one tier below, according to Gambling Insider.
Currently, Stoke-On-Trent based company Bet365 are one of the biggest household names in the UK gambling industry, headed by CEO Denise Coates. Where it would get curious if a ban does come into place is the fact that Coates’ father Peter is a shareholder in the company, however, he also owns Stoke City football club.
Because of this, Stoke City football stadium is called the ‘Bet365 Stadium’, while the firm also sponsors the club’s shirts. Where there would be a considerable amount of debate as to whether it would be able to stay this way if a ban does come in.
No doubt, the lawyers would be engaged to find some kind of loophole in the ruling, however, you would imagine that any kind of new legislation around this would take this into account. It suggests that there could be a long, drawn out battle in this particular scenario.
Final thoughts
While there are bound to be some changes around the current gambling act, especially to help tackle the issue of problem gambling and protect those who are vulnerable and stricter advertising laws introduced, the government will know that it could be at risk of a dangerous game of Chicken with the UK based gambling firms, especially if they all form an allegiance in the line of a ‘one for all, all for one’ approach and all decide to pull out based on any severe changes.
There is no doubt that this could have a significant effect on the UK economy and as a result, some kind of balanced approach will have to be considered.
