London casinos, corner bookies and days at the track are all familiar in the world of a UK gambler. But the 21stcentury is bringing changes. The government is instituting new rules, gamers are staying at home to play at the casino online and social trends are driving the gambling industry.
Observers point to some of the changes which, they say, will impact UK gambling activities for years to come.
Betting companies, including shops and both land-based casinos and online casinos will be expected to comply with stricter advertising rules in the future. Any gambling operator who is licensed in the UK will be required refrain from any type of advertising that misleads of exploits. This rule was set in place to protect vulnerable groups of customers. Failure to comply could lead to heavy fines.
The rules prohibit gambling operators from broadcasting ads during sports events. Such ads currently represent 95% of all commercials that appear on air during live football events.
Other types of ads that will be prohibited include promotions, even those which are so-called “Risk Free” promotions. These ads, the government has ruled, mislead customers because people may easily misinterpret the language of the ad since they don’t specifically note the promotion refers only to matched bets – in order to receive the “free” credits the customer will be required to deposit a specific amount. Even though this information is clearly stated in the promotion’s terms and conditions, there is still room for misinterpretation.
“Bet Now” types of advertising will also be unacceptable under the new rules. “Bet Now” instills the viewer with a sense of urgency and uses psychological pressure tactics to convince players to act quickly or lose out on a special deal.
So-called “Money Back” deals are also unacceptable. Betting companies generally offer customers free credits as “money back” but that, the government says, is misleading since the player doesn’t really receive any money back. Under the new rules an offer can’t be the cause of a customer incurring losses while winnings accumulated with such offers are capped at a specific amount.
The deadline for these advertising rules was April 2 2018. Now that the rules are in effect, proponents of responsible gaming are applauding the changes. They note that UK citizens will have more customer protection, especially after recent scandals in which negligence resulted in advertisements appearing that seemed to target children and insufficient staff training regarding handling cases of problem gambling.
Fixed Odds Betting Terminals
Fixed Odds Betting Terminals’ (FOBT) operators are facing a backlash from Gamblers Anonymous and other anti-addiction organizations for their efforts to increase the numbers of FOBTs in British Betting shops. The machines have been termed “extremely harmful” by campaigners because of their high addiction potential. The machines, which offer digital casino games such as blackjack, poker and roulette are criticized because they trap people into gambling in a compulsive manner.
FTOBs cause people to incur significant losses in a very short period of time due to the high speed at which gamers can make high bets. The high minimum stakes on these machines and the pace at which the game runs through its paces means that players can stake up to £100 every 20 seconds – which most gamers lose.
Government officials see these machines as a convenient tool for money launderers. Any earnings that fraudsters achieve on these machines appear as legitimate gambling profits. This has caused the UK government to consider how to control FOBT gaming. One possible move would be to lower the maximum stake from £100 to £2 per every 20 seconds. In addition to acting as a benefit to vulnerable customers this reduction will help to control any money laundering that may be occurring via the machines usage.
If the reduction is put into effect it will have a negative impact on the business of high-street betting firms like Ladbrokes Coral and William Hill.
These firms operate thousands of FOBT machines across Britain. It could cause hundreds of millions of dollars in loses to the companies and negative effects of the anticipated stake reduction are already being seen in the drop in these companies’ stocks. This isn’t surprising considering that, in 2017, betting companies generated more than half of their annual revenue from FOBTs.
2018 may be a big year for mergers within the betting world. FOBT stake reduction will likely force some big gambling companies to merge. Together with the mergers these companies will probably increase online gambling operations to supplement their landbased concerns.
A preview of such mergers came in December of 2017 when landbrokes Coral and GVC Holdings announced that they would merge. GVC Holdiers agreed to a £4 billion buyout of Ladbrokes Coral though progress is stalled due to an investigation of the deal on behalf of the UK Competition and Markets Authority or CMA. The investigation will determine whether the merger will lead to competition reduction in the local market. 1600 Ladbrokes Coral Group jobs are in jeopardy because of the merger on both management and support levels.
In other UK merger news William Hill and the Stars Group (formerly Amaya) discussed introducing a huge omni-channel platform. Negotiations broke down but Stars Group’s financial situation, precarious at the time of the negotiations, has improved and stockholders might now be more amenable to the joint venture – more if the UK government decides in favour of the FOBT stake reduction.
The igaming industry in the UK is expected to continue its growth in 2018. According to UK Gaming Council figures gambling online is currently the largest gambling sector in the country. The sector shows a gross gaming revenue of £4.5 billion for the period April 2015 and March 2016 and that amount is growing month by month.
Another growing sector involves virtual reality gaming which is connected to igaming. Virtual reality gaming is expected to grow by 800% by the year 2021. Other trends that will drive online gaming include mobile gaming apps and social media gaming.