The gambling industry in the UK is by every definition a big deal. In 2017, more than 100,000 people were employed within the industry. Gambling alone also contributed £2.8 billion to the public purse in the same year.
The online sector of the industry in the UK is equally robust. According to the Gambling Commission, it is the largest regulated online gambling industry in the world. It currently makes £4.7 billion for companies each year, and that figure continues to grow.
A major reason for the size and strength of the UK gambling industry is the relatively liberal nature of the country’s gambling legislation and regulation. Liberalisation began in earnest under New Labour in the late 90s. More recently, there have been signs of a sea change in politicians’ attitudes toward gambling.
Several pieces of new high-profile regulation have been introduced in the past eighteen months. There is lots of talk, too, that there will be more to come. What then, could that all mean for the gambling industry as a whole?
The most notable new regulation to hit the UK gambling industry relates to fixed-odds betting terminals (FOBTs). Coming into force in April, new rules limit the possible stakes on the machines to £2. Before, it was possible to bet significantly more on the terminals that are ubiquitous on UK high streets.
A raft of new advertising rules are also set to come into force from April. Gambling adverts will no longer be allowed on child-friendly websites or in computer games popular with children.
What’s more, betting companies will be limited in who they can use in their ads. They’ll no longer be able to use celebrities or other people who look like they’re under 25. That rules out a huge proportion of the most famous footballers and sporting personalities.
More to Come?
There’s plenty to suggest that those pieces of regulation won’t be the end of the story. Discussion has been rife in the media and throughout Westminster. Gambling, its social impacts and the need for more regulation has all been debated.
Last month, Labour came out strongly in favour of stricter regulation. They support limits on how much internet gamblers can stake and spend online with sites about slot machines likely first in line for a crackdown. Shadow culture secretary, Tom Watson, said the party would introduce such limits if they came to power. He also claimed that the tougher rules are needed to tackle ‘Britain’s hidden epidemic’ of problem gambling.
Earlier in February, the Gambling Commission proposed some rule changes of their own. Under their new rules it would be mandatory for all online gambling firms to verify a customer’s age before allowing any withdrawal of funds.
Can The Industry Cope?
There’s little doubt that more regulation will have an impact on the UK Gambling industry. The FOBT regulations have already been shown to have had a notable effect. GVC, the owners of Ladbrokes Coral, recently warned that they expected to have to close around 1,000 betting shops because of it.
William Hill, meanwhile, reported a loss of £722 million for 2018. That’s as compared to a profit of £147 million the previous year. Will Hawkley, the global head of leisure at KPMG however, thinks the land-based element of gambling companies will streamline rather than fail:
‘It will move forward and restructure. You won’t see the end of the betting shop – there’ll just be a lot less of them.’
That will make companies like Ladbrokes Coral and William Hill even more focussed on their online activities. What of the potential for upcoming stricter regulation in that area, then? In short, at the moment it is not predicted to have much of an impact. That’s ably demonstrated by the assessment of GVC’s future by George Salmon, an equity analyst at Hargreaves Lansdown:
‘The mushrooming digital division means GVC looks well placed to take the FOBT hit in its stride and deliver strong growth in 2020 and beyond.’
Part of the reason for optimism for gambling firms is the continuing process of deregulation in the US. Sports betting is increasingly becoming legal on the other side of the Atlantic. As largely online-based companies, gambling firms will likely have plenty of opportunities to take advantage of that new market.
More regulation of gambling, therefore, looks set to have a noticeable effect on the gambling industry. A significant number of betting shops may close. Online gambling may become somewhat less accessible. The industry as a whole, however, will certainly survive.