UK Gambling Industry in the News — Weekly Round-up for July 27, 2018

World Cup Football Brought New Gamblers To UK Companies

YouGov study says scale, enthusiasm and excitement generated by Russian-hosted championship translated into more betting – especially online

A new YouGov study has illustrated how the 2018 World Cup Football championship in Russia has attracted new customers to British betting companies, but cautions that ongoing efforts are needed to retain these fresh but ‘infrequent’ punters.

The study showed that the scale, enthusiasm and excitement generated by the tournament translated into involvement in betting, whether that was in a fun office-based competition, or with an established betting organisation.

The study shows that 14 percent of Brits (around 7 million people) took part in a World Cup sweepstake with their friends, family or workplace, including almost a quarter (24 percent) of full time workers.

Outside of the work environment, YouGov data suggests that 6 million people in the UK placed a bet on the tournament, either in a traditional high-street betting shop, or online (equivalent to 12 percent of the adult population).

Crucially for online brands, more than three times as many people placed their bet online than in a physical bookmaker.

YouGov says that a million of this year’s World Cup punters were new to gambling (ie they had not placed a sports bet in the preceding year).

And it says that introductory offers were a major incentive, resulting in a third of World Cup bettors (around 2 million people) opening up a new account in order to take advantage of free bets and offers.

“The challenge for gambling brands is to sustain interest in the industry now that the hope and hype of the tournament has dissipated,” YouGov observes.

“With the next World Cup an agonising four years away, gambling companies can’t rely on the ‘Three Lions’ to bring customers in, so marketing campaigns concentrated on new but infrequent consumers are crucial.

https://yougov.co.uk/news/2018/07/23/online-betting-companies-boosted-new-gamblers-duri/

Karamba Error Sparks A.S.A. Criticism

Online gambling operator says contraventions of advertising standards were a staff error

The UK Advertising Standards Association has hauled AG Communications, an online gambling operator trading as Karamba.com, over the coals on two public complaints concerning its publicity material.

The complaints were aimed at material titled “Tips and tricks on how to Win at Starburst,” and “How to Choose a Winning Slot Machine,” which were accused of being misleading by implying that such strategies could increase a punter’s chances of winning, and of being socially irresponsible by encouraging gambling behaviour that could lead to financial, social or emotional harm.

AG Communications expressed regret over the material, claiming that the web pages concerned had been uploaded in error by employees and in contravention of the company internal processes which routinely ensure regulatory compliance.

The company noted that the material attracted low levels of user traffic and had subsequently been removed.

The company reported that it had conducted an internal review of the issue and has re-emphasised the approval processes it had in place for the guidance of staff.

The ASA supported the complaints and ruled that the material must not again appear in its current form.

“We told Karamba.com to ensure their future marketing communications contained nothing that was likely to encourage irresponsible gambling behaviour that could lead to financial, social or emotional harm.

“Additionally, future marketing communications must not misleadingly imply that particular strategies improved a consumer’s chances of winning Starburst when that was not the case, and Karamaba.com must hold adequate substantiation in support of such claims,” the ASA adjudicators observed.

UK Bookmakers Could Get Major Tax Refund

Betfred challenge to VAT tax on FOBTs successful

There was some positivity for British bookmakers this week as the news broke that BetFred has been successful in challenging HM Revenue & Customs before a tax tribunal on the imposition of VAT on Fixed Odds Betting Terminals between 2005 and 2013.

In its challenge, Betfred claimed that the decision to apply the 20 percent VAT rate to FOBTs from 2005 in addition to an existing 15 percent betting duty, was a breach of European tax law.

Government stopped levying the VAT in 2013, replacing it with machine games duty that started at 20 percent and has since risen to 25 percent.

The tax tribunal ruled that collecting VAT on FOBTs had “breached the principle of fiscal neutrality” because similar roulette-style games played in casinos and online were exempt from the tax.

The decision could result in a massive GBP 1 billion refund to bookies if government fails to appeal or is unsuccessful in an appeal. The HMRC has declined to indicate what it intends to do, but says it is considering what is clearly a very important judgement.

BetFred’s managing director, Mark Stebbings, said: “We welcome the decision regarding the historical tax treatment of FOBTs, which pre-dates the introduction of machine games duty in February 2013. It does not concern Betfred’s ongoing tax liabilities.”

InfoPowa readers will recall that after years of bitter argument anti-FOBT campaigners earlier this year persuaded government to reduce the maximum stake on FOBTs from GBP 100 to just GBP 2 with effect from 2020.

The drastic reduction sparked industry warnings that bookmakers would be hard hit, shops could close and jobs may be lost.

Government also stands to lose significant tax revenue from the cuts, although it has indicated that it is considering replacing the lost revenue by hiking tax on online gambling to 20 percent.