UK Gambling Industry in the News — Weekly Round-up for May 25, 2018

Gamstop Effectiveness Questioned By UK Gaming Commission

Concerns over efficiency of national self-exclusion system

The Guardian newspaper has carried several anti-gambling articles this week following the government’s decision to chop FOBT maximum bets to GBP 2, but it took a different tack Friday in a story which questioned the effectiveness of the Gamstop player self-exclusion system pioneered by the Gambling Commission and the Remote Gaming Association.

The newspaper claims to have had sight of a letter from Commission executive director Tim Miller to the RGA expressing concerns about “unacceptable” flaws in Gamstop that include a lack of synchronisation with the promotional and marketing lists of online gambling operators, which has meant that self-excluded gamblers could still receive promotional inducements via direct digital mail systems.

Miller reportedly told the RGA that it was “unacceptable that currently GamStop does not interact with marketing lists in that way” and that the Commission was prepared to demand that firms do not send marketing messages to people who have signed up to either GamStop or another self-exclusion scheme, on pain of losing their licence.

The newspaper reports that it carried out tests of Gamstop itself Friday which “revealed what appeared to be flaws in the technology” in that it proved easy to register with several gambling websites following a self-exclusion filing by simply changing the surname on the account, even when details such as mobile phone number, email and home address remained the same.

A Gamstop spokesperson responded to the newspaper by explaining that the system was still being fine-tuned and would be reviewed to see whether user details could be safely linked to marketing lists without compromising personal data.

British Tote Wars Heat Up

Consortium aims to revitalise 90-year-old Tote

According to a Sky News report, a racing consortium, that includes former Merrill Lynch trader Alex Frost, has reached a GBP 130 million deal with Betfred.

The report details a GBP 20 million payment to Betfred from Alizeti Capital, a consortium of “racing industry heavyweights”, as an upfront payment for a minority stake in the Tote aiming towards a full takeover of the well known brand in the next five years.

Quoting unidentified sources, Sky News said Alizeti aims to “transform the Tote’s profile and financial performance even as it relinquishes the on-course pool-betting monopoly it has enjoyed for years.”

Another recent GBP 20 million acquisition of horseracing industry loyalty programme, Rewards for Racing (R4R), will provide the Tote access to around 900,000 members. R4R lists Bet365, Betfred, Coral and Betfair as members.

Alizeti’s fund raising pitch to prospective shareholders apparently refers to a three-to-five year partnership between Alizeti and Betfred, in which Alizeti would own 25 percent of the Tote’s business-to-business operation and a 75 percent stake in its digital and on-course consumer betting division.

Read the full report here.

Monzo To Innovate With Self Exclusion Features

A client triggered self-exclusion feature will block gambling transactions

UK-situated, app based challenger bank Monzo is developing a number of self-exclusion tools for gambling transactions.

In an upcoming upgrade, Monzo clients will be able to block transactions to gambling sites being made on their Monzo account through the activation of a feature in the settings of their app or by contacting the Monzo customer support team.

The activated feature will block any payments the self-excluded client tries to make to gambling merchants whether online and in person through identification of the merchant code.

Monzo clients who wish to deactivate the self-exclusion feature will need to contact customer support after which a 48-hour cooling off period will follow to avoid impulsive decision making on the part of the client.

Monzo indicated this would be the first of other responsible gambling features to come.

Early ideas include the ability to set a 30-day rolling gambling limit, the nomination of a “trusted friend” who would need to authorise any gambling transactions, low balance notifications and visual indicators to help clients become aware of how much they’re spending and a facility where clients can set aside an amount for the essentials such as rent, food etc.

Sky Betting And Gaming Ceo Concerned About Possible Remote Gaming Tax Increases

Look at other options before hammering companies that create UK jobs and contribute to the economy says Flint

In an op-ed article in the Yorkshire Post this (Friday) morning Sky Betting and Gaming CEO Richard Flint reacted to the UK government’s indication that it may seek higher taxes from online gambling firms to recoup tax losses brought about by the decision to chop FOBT maximum bets to GBP 2.

Flint points out that his Leeds-based company is domiciled and licensed in the UK and makes hefty tax and employment contributions to the Yorkshire economy

“Unlike other online operators we are not based in Gibraltar or Malta,” Flint notes, revealing that the company has created nearly 1,000 jobs in the last three years and has another 120 roles to fill. It has also launched schemes like the SBG CoLab programme – an incubator for tech businesses in the area, and this year it will open its graduate scheme for the fourth year running, helping build up the skills of local young people considering careers in technology.

“Any increase in Remote Gaming Duty is a tax on hi-tech Yorkshire jobs and will clearly have an impact on our plans to create new roles in the North of England in the years to come,” he warns, revealing that the company tax burden is already high.

“Last year we paid GBP 153 million in taxes and made GBP 146 million in profit. It is right that we did this – we are a UK-based business and proud of the contribution we make to Yorkshire and the wider UK economy. A contribution by the way, that was worth GBP 300 million in GVA to the regional economy,” Flint says.

“But it can’t be right to increase our tax burden even further to pay for a change in regulations that is unrelated to us. Especially when there are other, more equitable ways the government could raise any revenue it may need to cover this (FOBT) shortfall.”

Flint suggests other options the government should explore, notably:

  • Widening the tax net to other technology companies (specifically Google and Facebook) who should be able like the gambling industry to identify where customers are based, and if they are in the UK, tax them accordingly;
  • Closing the loophole that means companies based offshore don’t pay VAT on their marketing and other costs. Flint notes that this tax alone cost Sky Betting & Gaming around GBP 30 million last year, and extending it to other companies could address any shortfall the reduction in FOBT stakes might lead to.

Flint says that his company is committed to safer and responsible gambling, emphasising the importance of using data to ensure gamblers are protected.

“We already invest tens of millions of pounds in people, systems and the industry’s first ever safer gambling advertising campaign designed to reduce problem gambling in our customer base and we plan to increase this spend,” he revealed.

“To this end, Sky Betting & Gaming has already put forward a four point plan to industry. This includes harnessing technology so we can use customer data to understand player behaviour, and monitor for signs of harm.

“We look forward to working with the Government and industry going forward to continue to build a safer more responsible gambling industry fit for the 21st century. However, Ministers need to think through the implications of further tax increases online, or risk unintended consequences which would damage our local economy.”

Read more at: https://www.yorkshirepost.co.uk/news/opinion/richard-flint-don-t-gamble-with-tech-sector-over-betting-reforms-1-9169988