What will become of the UK gambling industry following the APPG report?

Much has been written this week about the findings from a report released on Tuesday by the All Party Parliamentary Group for Gambling Related Harm (GRH APPG). It follows a year-long inquiry by MP's into problem gambling in the UK, with a heavy focus on the advertising methods and business practices used by gambling operators.

The GRH APPG presented a number of recommendations which they felt the UK gambling industry needed to make in order to reduce harm caused by problem gambling. The group also took a swipe at the Gambling Commission, calling into question whether the regulator was 'fit for purpose'.

A summary of the key recommendations taken from this latest report:

• Stake limits for online slot content of no higher than £2 given the potential to cause harm.
• A ban on all VIP schemes and inducements. These schemes are highly profitable for gambling companies offering very high stakes gambling and they continue to lead to significant harm.
• A ban on all gambling advertising.
• A complete overhaul of gambling regulation in the UK. The Gambling Commission is not fit for purpose.
• An urgent review of stakes, deposit and prize limits online as well as a complete review and classification of online products.
• Affordability limits set and imposed by the Gambling Commission.
• A Gambling Ombudsman for consumer redress.
• A mandatory ‘smart’ levy paid by gambling operators to fund independent research, education, prevention and treatment.
• A new Gambling Act. While some immediate changes can be made through secondary legislation and the Government should consider what changes can be made in the short-term, an overhaul of the 2005 Gambling Act is required-fit for our digital age.

What is probably most important here is to remember these are recommendations at present and one would expect that it would be very difficult to get them all passed by ministers. However, what is concerning for those firms that rely on the UK gambling market is the wide-spread support for wholesale change to the industry. Among the many supporting voices of the APPG's recommendations were only a handful of detractors. One notable voice defending the industry was GVC's chief executive Kenny Alexander. He wrote in a blog post Monday:

“A significant anti-gambling lobby believes punitive and mandatory restrictions - notably clamping down on online stake thresholds - will help problem gamblers. I don’t doubt for one minute their genuine desire to help solve the problem, but such measures would actually only serve to exacerbate the issue.”

There is an overwhelming consensus among industry experts that players will start looking outside of the licensed operators for more relaxed signup procedures, KYC (Know Your Customer) checks and reduced restrictions on maximum bets. Vulnerable players in particular may become a prime target for unlicensed operators who put profit before dealing with problem gambling.

What does the future hold?

With a powerful anti-gambling lobby mobilized and seemingly wide-spread public support, its not beyond the realms of possibility that many of these recommendations from the GRH APPG could be brought into law. Licensed operators will have to work within the law, but if marketing channels are restricted, player values drop due to reduced maximum stakes and competition from unlicensed operators increases, then it looks a very precarious road ahead.

All of which may lead to licensed UK gambling operators considering whether it is worth continuing to take bets from within the British Isles or to start looking elsewhere in the world for the future of their businesses.

Already in the last 2 years there has been an exodus of licensed gambling operators leaving the UK market as numerous measures and controls have been brought into legislation. They include, but are not limited to:

• The maximum bet on FOBT's cut to £2.
• Credit card payments to gambling operators banned.
• Gambling operators are responsible for the actions of their affiliate marketing partners.
• Anti-money laundering laws have been tightened further.
• Large fines for incomplete Know Your Customer (KYC) checks.

There are many more, but the GRH APPG do not feel that UK gambling regulation goes far enough to prevent harm caused by problem gambling.

And what of UK facing affiliates?

The future looks quite bleak for gambling affiliates who gain most or all of their website traffic from the UK. One unnamed affiliate described operating in the UK, something akin to 'a death by a thousand cuts'. With the restrictions in their marketing activity, the constant threat of breaking compliance rules and numerous restrictions for player signups, it is little wonder why many of these affiliates are looking overseas for the future of their businesses.

Rightlander's role

Even though Rightlander started life in the UK, helping igaming operators navigate affiliate compliance legislation introduced in 2017, we have built a vast knowledge of gambling compliance in many countries worldwide. Rightlander performs affiliate compliance scanning and monitoring in over 40 countries worldwide, with many more on the way. If your business needs help considering the future of igaming then we can provide that support. Visit our contact page to get in touch.