Punters to benefit as UK gambling sector set for rough ride

UK gambling sector

The UK gambling sector is in for a rough ride as scandals around social responsibility continue to come to light and politicians turn against it.

But if the operators are bracing themselves, punters might benefit from all the upheavals, writes Dominic Gates.

To say that the UK gambling industry has been in a state of flux over the past 18 months could be the understatement of the year for those who follow the sector closely. Why is that? Well, ‘how long have you got?’ might be the more appropriate question.

In no particular order, the past year alone has seen the country’s ‘favourite’ (biggest) bookmakers and casino operators fined (and heavily), told off publicly by MPs and regulators, subject to highly negative and aggressive reporting (The Guardian in particular and from The Times), regardless of whether the stories were true, half-true or downright false.

Regulatory clampdown

They are also the current focus of investigations into their marketing practices by the UK’s Competition and Markets Authority and the government’s soon to be published Triennial Review. The review due for October will likely recommend a drop in the maximum stake allowed on fixed odds betting terminals (FOBTs) from £100 to £25 or less.

This comes on top of possible tax hikes for online operators, an increased levy for horse racing and more expensive rights for things like TV and streaming rights.

If we take the recent example of 888, one of the best know online operators in the market; the group was fined £7.8m for serious breaches of its corporate and social responsibility duties towards its players (more on that later), while Paddy Power copped a £280,000 fine from the UK’s regulatory body the Gambling Commission for encouraging one of its players to keep on playing on (the dreaded/wretched/crack cocaine of gambling, delete as appropriate) fixed odds betting terminals (FOBTs).

All this happened despite said customer telling the bookmaker that he was a problem gambler, that he had got himself into financial difficulties, that his habit had led to him being sacked from his work five times and that he had lost his family home in the process.

With friends like these… as the old saying goes.

The-Boss-Verne-Troyer

Or take the case of online bingo and casino operator BGO. A growing, fun and energetic brand, you might have seen its TV adverts featuring Paris Hilton and its figurehead Verne Troyer ‘The Boss’.

It was fined £300,000 for breaching advertising and marketing guidelines as set out by the Gambling Commission. Speaking to contacts in the industry, it wasn’t really about what BGO had done, the twist was that some of its affiliates had been pushing out misleading adverts that caused the ire of the Commission’s functionaries.

Rogue marketing

In other words, BGO had to shell out a hefty fine in large part for something some of its marketing agents had done. You can imagine the reaction of the group’s owners.

Of course many will argue that operators know the rules of the game and have all agreed to play by them and shouldn’t moan if they don’t stick to them or if they don’t monitor how some of their marketing partners promote their products (“easier said than done” is what operators would answer back).

What it shows without any doubt whatsoever is that the environment in which companies like BGO are working is increasingly fraught and littered with regulatory pitfalls, which the authorities, much of the mainstream press, along with parts of the general public, are only too happy to point out and punish the operators for any misstep.

The question many are now asking is whether all this sabre rattling will actually result in a regulatory clampdown? After all, the gambling sector has always been the target of negative press coverage and plenty of people disapprove of it. This is true, but it is clear that the gambling sector currently finds itself at the centre of a perfect storm.

Once again, in no particular order, factors conspiring against the industry include:

  • frequent and numerous negative news stories in newspapers like The Times and The Guardian about FOBTs,

  • controversial marketing stunts by operators such as Paddy Power or affiliates that have created a buzz and attracted lots of negative reactions,

  • unclear terms and conditions that force players to stay and play on the site for overly long periods before being able to cash out or benefit from promotions and bonuses,

  • a change of mood at the very top of government – UK Prime Minister Theresa May disapproves of gambling on a personal level and the sector in general (one might have thought she had more pressing issues on her mind, but hey…),

  • very effective campaigning by anti-gambling groups like the Campaign for Fairer Gambling – which has won the public debate hands down against much bigger and better funded trade groups like the Association of British Bookmakers.

But for all the talk of doom and gloom, it is also worth looking at the detail surrounding all the noise. If we take the most recent hit taken by the online gambling sector, in the shape of the £7.8m fine issued to leading operator 888, it is worth noting that it is not all black and white when it comes to the highly emotive issue of problem gambling.

The summary is damning:

“The Commission found that 888 breached the social responsibility code of the LCCP as follows:

Self Exclusion – More than 7000 of 888’s self-excluded customers were able to deposit GBP 3.5m over 13 months, between October 2015 and September 2016.

Customer Interaction – A customer, who stole in excess of £55,000 from his employer, was able to gamble £1.3m with 888 websites, spending more than three hours a day gambling for 15 months, without a single interaction with the operator, despite exhibiting behaviour indicative of problem gambling.”

Poor tech proves costly

These breaches were due to poor ‘linkage’ between 888’s platforms, or dodgy tech in simpler terms, which is rich when those companies constantly bang on about how they are at the cutting edge of everything.

Customers who had self-excluded on one platform were not excluded from the group’s other offerings (from casino to bingo or poker for example). This occurred for 13 months with 7000 customers gambling a total of £50.6m. Given the number of customers involved, the duration of the breach and the scale of the gambling involved, it is fair to say 888 committed the most serious of breaches.

888 had previously alerted the Commission to the fact that it had a malfunction with linking its platforms, but failed to address it and has thus paid a heavy price for not keeping its systems up to date and following best practice when it comes to problem gambling, money laundering and ensuring the highest standards of player safety possible.

It could also have been a lot worse for the casino group. The breaches of its licence conditions were severe enough for the Commission to start legal proceedings against it, with loss of its licence a genuine possibility.

Amid all the doom and gloom (for operators at least), what does it all mean for you punters when it comes to playing your favourite games on your favourite sites? Probably not that much in the short term, but in the medium to long run it should mean clearer (and fairer) terms and conditions, especially with regard to minimum amounts to be played for bonuses or free bets activation, simpler marketing and advertising messages and better safety when in terms of responsible gambling.

Not that bad an upshot then for players, in the meantime we’ll just have to wait and see if more operators get caught in the Commission’s net.