UK Gambling Industry in the News — Weekly Round-up for May 18, 2018

UK Gambling Set To Continue Growth Through 2022

New Technavio study predicts a CAGR of over 5 percent between 2018 and 2022

Independent research specialists Technavio has published the conclusions of its latest UK gambling industry study, covering the period 2018 to 2022 and predicting that the compound annual growth rate (CAGR) will exceed 5 percent over the period.

One of the key factors driving growth is the increased adoption of online platforms for gambling,the report notes. The online gambling sector in the UK has been witnessing substantial growth over the last few years, and in 2017, the online gambling segment accounted for over 35 percent of the entire national gambling market. The segment witnessed an incremental growth of 2 percent between 2015 and 2017.

During the forecast period, the UK regulatory bodies expect the growth to continue. Online gambling and its continued growth at the expense of conventional gambling operations will drive the gambling market in the UK during the forecast period, Technavio analysts claim, highlighting the growing importance of artificial intelligence.

“AI can be used to determine consumer behaviour. This would enable sites to better anticipate players’ needs and figure out what drives them to play, quit, or change games the most. AI can also help intensify computer-opponents. AI is used in the gambling industry to improve customer service. Advanced bots that are replacing customer service representatives can access and analyse knowledge about a customer’s specific playing habits,” says a senior analyst at Technavio.

The UK gambling industry is known for its implementation of emerging consumer trends and innovative technologies, and the most effective operators have facilitated a smooth shift from the physical to the digital world.

The report segments the industry into the following types, betting, lottery, and casino. The betting segment held the largest market share in 2017, accounting for nearly 45 percent of the market and this is expected to increase more than 3 percent by 2022.

UK Government’s Decision On Fixed Odds This Week

Fixed-odds betting stakes ‘to be cut to GBP 2’ say widespread media reports

Widespread overnight reports in the UK press Wednesday have predicted that the UK government’s decision on Fixed Odds Betting Terminal maximum deposits is imminent… and the consensus is that it will not be good news for High Street retail bookmakers.

The reports claim that the government will impose a GBP 2 maximum stake despite last-minute warnings from major gambling companies that such a move will result in up to 20,000 jobs lost and financial damage to companies as retail betting shops are shuttered.

Research by professional business services supplier KPMG has estimated a GBP 2 limit would cut revenue for HM Treasury by GBP 1.1 billion over three years, an annual loss of GBP 45 million to local authorities and a GBP 50 million hit to British racing.

Concerns have been expressed that the government may seek to recoup some of these lost tax revenues by increased taxation on online gambling.

UPDATE:

Overnight reports appear to have been correct; the BBC and other media have reported that the GBP 2 maximum stake feared by bookmakers has been introduced.

Sports Minister Tracey Crouch said reducing the stake to GBP 2 “will reduce harm for the most vulnerable”.

Crouch said: “We recognise the potential impact of this change for betting shops which depend on (FOBT) revenues, but also that this is an industry that is innovative and able to adapt to changes.”

She said the government will work with the industry and the Gambling Commission “to examine the effects of regulatory changes and also the continuing trend of growth of gambling activity online”.

Crouch said FOBTs were “an outlier in the world of high-street gambling because of the speed with which it is possible to lose large amounts of money”. She said that the GBP 2 limit would “substantially” reduce harm and protect the most vulnerable players.

She added: “Even cutting to GBP 10 would leave problem gamblers, and those most vulnerable, exposed to losses that would cause them and their families significant harm.”

The government has not set an exact timetable for implementing its decision, said Matt Hancock, secretary of state for digital, culture, media and sport, applauding the decision as a major step in combatting the social blight of problem gambling.

“We’re going to get on with it. It does take parliament to approve it, so there will be a need to put measures through parliament,” Hancock said during an interview on BBC Radio 4 Thursday.

“I’m not going to set out an exact timetable because today we’re announcing the decision. We’re going to work with the industry to make sure that that’s implemented effectively.

“When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand.”

Concerns that the tax loss to the Treasury would lead to increased taxation of Remote Gaming have also been heightened by part of the government statement that advises the FOBT stake reduction “will be linked to an increase in Remote Gaming Duty, paid by online gaming operators, at the relevant Budget.”

Reacting to the government announcement, William Hill and Paddy Power Betfair said the decision would hit gaming revenue hard.

William Hill expects total gaming net revenue to fall by 35-45 percent, while Paddy Power sees a 33-43 percent decline in its machine gaming revenue. GVC said it expects to reposition its business within two years following implementation, with fully mitigated impact of about GBP 120 million pounds on its core earnings, and GBP 160 million in the first full year after implementation.

GVC said in statement:

“It is now important that the industry is given an adequate implementation period to help prepare and plan for the shop closures that will arise, including attempting to mitigate the impact of resultant job losses. Significant re-engineering of the machines and gaming software will also be required to effect these changes.”

Shares in betting companies dropped this (Thursday) morning on the news, with GVC down nearly five percent in early trading, and William Hill down nearly six percent.

Is Online Gambling The Next Target?

Gambleaware chief claims characteristics that make FOBTs so addictive also apply to online gambling

Flushed with the success of their anti-FOBT campaign, anti-gambling activists and problem gambling charities are now looking for a new target….and it might just be online gambling.

In an interview with the Independent newspaper Thursday GambleAware chief Marc Etches said that attention must be paid to the rapidly growing online gambling sector, pointing out that almost unlimited stakes remain available online and can be taken up quickly and easily through smartphone apps.

The Independent noted that online gambling will soon account for half of all money wagered in the UK and is far more prevalent than betting on FOBTs. Just 1 percent of adults gamble at a bookmakers while 18 percent do so online, the newspaper claimed.

Etches opined that the characteristics that make FOBTs so addictive also apply to online gambling.

“With mobile phones, online gambling is instantly accessible,” Etches said.

“For those people who have a problem controlling their gambling behaviour, accessibility, speed of play and the ability to lose a lot of money very quickly become particularly dangerous.”

Etches also claims that gambling is being normalised due to the rapid growth of advertising and promotion, particularly at or around sporting events. And nine out of 20 Premier League football clubs currently play with a gambling company logo emblazoned on their shirts, whilst half-time ads promoting betting firms are pervasive.

He also feels that gambling advertising should be the subject of more careful consideration regarding where and when it is placed and the likely audience – a reference to his assertion that children are being exposed to this type of advertising.

“We have 11-year-olds self-reporting for problem gambling. That can’t be right,” Etches said.

Gambling firms invested GBP 1.4 billion on TV ads between 2012 and 2017, with online operators doubling their marketing budgets in that time.

The UK government announced earlier this week that Public Health England is conducting a review into the harm caused by gambling, an indication that Etches hopes illustrates that attitudes towards gambling are belatedly beginning to change.

“Across the whole House of Commons you can see a recognition, at last, that gambling-related harm is a health issue. To actually have confirmation that work is being done in cooperation with Public Health England and the Department for Health and Social care is a really positive outcome.”

Labour’s shadow minister for culture, Tom Watson, called on his Conservative opposite number Tracey Crouch to follow the FOBT ban with the implementation of a levy on all gambling firms in order to fund addiction treatment, education and research.

UK Television Stars Under Investigation By Advertising Watchdog

Three Geordie Shore actors are alleged to have promoted gambling sites on social media without making their affiliation clear

The BBC reported Friday that three actors from the reality television series Geordie Shore are being investigated by UK advertising watchdog the Advertising Standards Authority (ASA) on suspicion of promoting gambling websites on their social media accounts without making their affiliation with gambling companies clear.

Gary Beadle, Scott Timlin and Aaron Chalmers have been named amid allegations that they have not revealed that their social media posts are adverts. The trio have not yet commented on the accusation.

The BBC report notes that the trio have a combined 15.3 million followers on several social networking sites, and that it is alleged that their posts advertise gambling odds on sports fixtures and encourage followers to link to betting websites Coral and Ladbrokes.

The Ladbrokes Coral gambling group has confirmed the men are affiliates marketers who are paid commissions if users sign up to a betting account through their social media sites.

Celebrities are allowed to post on social media for companies, but must make clear that it is an advertisement, and subject to strict rules regarding gambling advertising.

The ASA told BBC Radio 5 live it was investigating and would be contacting the advertisers and brands behind the offers that the three have posted about.

A spokesman said: “The issue is high up on our agenda. Protecting young and vulnerable people from inappropriately targeted or irresponsible gambling ads is a priority.”

The ASA also confirmed Beadle had been warned about similar social media posting behaviour before, and had agreed to make adverts clear in future.

Ladbrokes Coral said: “Ladbrokes Coral has what is a very standard affiliate relationship with these celebrities, and which is compliant with the ASA and CAP [Committees of Advertising Practice] rules governing this activity.”