This Monday we reported on the Parliamentary report regarding betting limits at online casinos and as one could expect that event had an immediate impact on the industry.
Namely, immediately after the report was published and it became clear that authorities are inclined to push operators harder and aim to introduce more restrictive laws and regulations.
While it is clear that decision will have a significant impact if it’s passed and implemented, the report itself had an impact and the share price of multiple gambling operators in the country dropped significantly. Just a reminder, MPs called for a betting limit at online casinos, similar to the £2 limit of FOBTs to be introduced.
Multiple measures to be considered
The share prices of all major operators decreased. The impact on the share price of William Hill was most significant as it dropped 12.3%, well as the share of GVC, a company that owns Ladbrokes, fell 10.6%. Flutter Entertainment, which is the owner of Betfair and Paddy Power a company that was formed after the merger of the two mentioned operators, was only 3% down, and it seems that this company suffered the least.
The gambling industry in Britain grew significantly following the introduction of the Gambling Act in 2005, under Tony Blair’s Labour government. But there has been growing concerns regarding problems that arise from increasing gambling activities, such as gambling addiction, as well as other social problems.
Key focus points of the proposed reforms of the UK gambling legislation would include additional measures aimed at protection of vulnerable people, then more restrictions on so called VIP accounts, as it has been suspected that many of those who have been regarded as VIP players are actually people with a gambling problem.
The all-party parliamentary group (APPG) found that operators have been offering various rewards and incentives like free trips and weekend packages which had an effect on players and get them hooked. The group suggest introduction of mandatory checks to ensure that players wager within their means.
Online operators are particularly worried about the call to reduce the stake limits on online slots to just £2, following a similar limit on FOBTs that was introduced earlier this year.
If such a decision it reached, it will have a very significant impact on the revenue and profits of online gambling operators and would leave land-based casinos as the only options for those UK players who prefer high-stakes gambling.
Operators already hit by FOBTs stake limit
William Hill and Ladbrokes have already suffered a heavy hit following the decision to put a limit on FOBTs betting to £2. Some campaigners were satisfied with the decision, but others wondered whether a blanket limit of £2 on all forms of gambling is the right way forward. Safer Online Gambling Group is one of the organisations that have put forward proposals as to how to deal with problem gambling.
Adam Bradford, a representative of SOGG said that banning credit card gambling can be a vital step in tackling problem gambling and he also added that more should be done in terms of treatment for players who already have a gambling problem, as many of them aren’t receiving proper care.
However, Bradford said that a £2 stake limit would be preposterous, as it would destabilise the industry and potentially lead to its demise.