The UK Gambling Commission (UKGC) and the UK government are working on new plans for the gaming industry, although their approaches aren’t identical. The UKGC wants a more restrictive approach, and a new study from global accounting firm Ernst & Young (EY) indicates that this could be a fatal move.
The UK’s regulated gambling industry is one of the strongest in Europe. It’s also one of the most responsible, with a problem gambling rate lower than 0.5%, according to the UKGC’s own studies.
That rate has dropped over time, as gaming operators proactively implemented policies to reduce gambling addiction risks without the need for far-reaching regulatory controls. However, if the UKGC and the government clamp down like they want to, EY believes the regulated industry could be in a lot of trouble.
The UKGC wants a “single view” for the gaming industry, whereby all operators would have access to certain consumer data to control spending. The government, which has promised a more relaxed approach, believes that affordability checks would help control spending as well.
Affordability checks, in theory, would ensure gamblers and bettors can afford what they spend. EY’s survey believes it could do more harm than good.
The Betting and Gaming Council (BGC) commissioned the accounting giant to conduct the review. What it found was as much as 70% of bettors have no plans to share data with the government. In other words, that entire sector could switch to unregulated, black-market gambling and sports betting.
This industry is serious about safer gambling, and it’s encouraging that the rates of problem gambling among UK adults remain low by international standards at 0.3%. But without Government clarity on affordability checks, our members are concerned they are driving frustrated customers to the unsafe, unregulated black market,” said BGC CEO Michael Dugher.
The loss would impact private companies and employment, as well as the UK government. The revenue contribution the gaming industry gives to the country is around $8.7 billion annually, according to EY.
There is evidence to support the assumption that the UK gaming industry and the government would suffer because of overzealous controls. Reports have indicated that up to 66% of Norway’s gaming activity is offshore. In France and Italy, the figure is 57% and 23%, respectively.
As much as the UKGC harps about responsible gambling and the rules, it recently broke them. The UKGC showed its own ad on social media in support of responsible gambling, but used underage children as young as nine or 10. It isn’t clear if the regulator plans on fining itself for the violation.
More Changes Coming
Perhaps cooler heads will prevail when the new gambling laws arrive. Secretary of State for Digital, Culture, Media, and Sport, Michelle Donelan, recently said the government will take a “common sense” approach with its gambling reform.
Just because the country updates its 20-year-old laws doesn’t mean that it will sit back and wait another two decades to make additional changes. Gambling Minister Paul Scully recently stated that the arrival of the white paper isn’t going to be the end to reforms. He added that the government will continue to explore new rules through “a variety of lenses.”
The government has already delayed the presentation of its white paper on gambling reform a number of times. It’s well over a year late, although Donelan said it was coming “in the next few weeks.”
That was several weeks ago and there’s still a chance that it will appear before the end of the year. However, it’s more likely that a 2023 presentation of the UK’s new gambling laws is coming first. Hopefully, the government will have read the EY report.