HomeGamblingUK gambling groups braced for sweeping reforms to protect customers

UK gambling groups braced for sweeping reforms to protect customers

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UK gambling groups are preparing for the release of a major government review into the £10bn industry as soon as this month, which will introduce a statutory levy to fund public health initiatives and tighter financial checks on customers.

The sweeping reforms are expected to ban so-called VIP packages on betting sites, pressure football’s Premier League to end front-of-shirt gambling sponsorship and legally oblige operators to allocate 1 per cent of gross yields to gambling harms care, raising an estimated £140mn a year, according to Whitehall insiders.

Coming after almost two years of delays, which have been strongly criticised by medical professionals and campaigners, the white paper will mark the first overhaul to the rules governing the industry since 2005.

As well as the ban on VIP loyalty schemes that can spur spending, stakes on online slots will be capped at between £2 and £5. But sector insiders briefed by government officials said the most controversial and complex measure — affordability checks on gamblers — was still being debated.

Proposed caps of £125 on monthly losses or £500 on annual losses before the activation of checks, which featured in an earlier draft of the review, could be watered down, said people close to discussions.

The white paper will update the 2005 Gambling Act introduced by the then Labour government, which established the rules for the industry before the advent of the smartphone.

Michael Dugher, a former Labour MP who now runs the Betting and Gaming Council, an industry body, said operators were “relaxed” about a statutory levy but that the government’s slowness “bordered on the farcical”. He added that the delay had “been bad for business, as the industry craves regulatory certainty”.

But Ian Proctor, UK and Ireland chair at Flutter, the world’s largest listed gambling group and owner of Betfair and Paddy Power, said the policy document’s publication would mark “not the end” but “the beginning of the next phase”, requiring painstaking implementation.

The sector has successfully lobbied the government against in-depth checks that would require customers staking larger amounts to produce bank statements and proof of salary. However, executives stressed that introducing frictionless measures via credit checks and open banking data would not be simple.

“All the word is that the checks are intended to be frictionless, but such a frictionless check doesn’t actually exist given lots of laws around privacy and data sharing,” said Proctor.

A swath of consultations will follow the white paper, including one to determine how frictionless checks will work, which will hear from operators, banks, the Gambling Commission and the Information Commissioner’s Office, the data watchdog.

Launched in December 2020, the review has been overseen by six gambling ministers and four culture secretaries, and its release delayed four times amid government turmoil and the Covid-19 pandemic.

But in Westminster, there remains optimism that it has broad support. Sir Iain Duncan Smith, former Conservative leader, said the “political dial had shifted” after the exits from Downing Street of Boris Johnson and Liz Truss, who both opposed a statutory levy.

He predicted that the “vast majority” of Tory MPs would back the reforms because concern over gambling harms have “trickled through to the public consciousness, especially as more and more vulnerable people have become addicted”.

According to the Gambling Commission, about 0.3 per cent of British adults were problem gamblers at the end of 2021, but a survey by polling company YouGov put the figure at 2.8 per cent, or almost 1.4mn people.

Heather Wardle, reader in sociology at Glasgow university, said the hold-ups had exacted “a very real human cost” and that the review’s pledge to “protect people from harms” jarred with “an underlying economic model by which . . . growth is coming from those who are harmed most”.

Three-fifths of industry profits come from 5 per cent of users who are either problem gamblers or at risk of becoming so, according to a 2021 parliamentary report.

Culture secretary Lucy Frazer this month met industry representatives and people with direct experience of problem gambling. On Wednesday, Frazer and sports minister Stuart Andrew, who has been handed the gambling brief, will meet families affected by gambling-related suicides in parliament.

A former minister who worked on the review said Frazer understood “that we’ve gone around it so many times and done lots of engagement”. They added: “She’ll want to make sure she’s happy with it and meet key people but otherwise it’s just delayed to sequence it after the football paper” released last week.

The culture department said it was “determined to protect those most at risk of gambling-related harm” and “working to finalise details” of the white paper. One person familiar with the document said ministers would be asked to approve it this week before it was presented to parliament in late March or mid-April.

None of the recommendations is expected to require changes to primary legislation. Any decision to end front-of-shirt sponsorship from gambling operators in the Premier League, for instance, will be voluntary and voted on by its 20 clubs.

Anticipating incoming checks, Flutter has implemented safer gambling rules at a cost of £30mn in annual revenues. Meanwhile, Ladbrokes owner Entain has warned that self-imposed measures have already cut UK net gaming revenues by 10 per cent.

Nonetheless, Matt Gaskell, clinical lead for the NHS Northern Gambling Service, one of a network of clinics for problem gambling in England, said a rise in people seeking treatment suggested the industry remained “very unsafe”. “Everybody’s interests will be much better served if we had comprehensive prevention policies in the first place,” he added.

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