UK Government Outlines Gambling Reforms to Protect Vulnerable Customers -- 2nd Update

By Kyle Morris and Ian Walker

The U.K. government on Thursday set out proposals for gambling reforms designed to protect vulnerable customers, which should lead to between a 3% and 8% reduction in gross gambling yield across the sector.

As part of its plan, the U.K. government's Department for Culture, Media and Sports plans to bring online slots games more in line with brick-and-mortar equivalents with a stake limit on online slots of between 2 and 15 pounds($2.49-$18.70), subject to consultation. It also plans to force companies to step up their checks on when losses are likely to be unaffordable and harmful for customers.

The main decrease in gross gambling sector yield should come in online gambling, where it is estimated that there will be a reduction of between 8% and 14%.

Online slots have been identified as a particularly high risk product, associated with large losses, but presently have no statutory stake limits. Proposals also include a consultation on slot-specific measures to providing greater protections for 18 to 24-year-olds, such as options of a GBP2 stake limit per spin, a GBP4 stake limit per spin or an approach based on individual risk.

The Gambling Commission will consult on two forms of financial risk checks based on moderate spend and higher spend. Background checks on moderate spending are proposed to take place at GBP125 net loss within a month or GBP500 within a year. At higher spending levels, thresholds of a GBP1,000 net loss within 24 hours or GBP2,000 within 90 days are proposed. There should also be a more detailed consideration of a customer's financial position and triggers for enhanced checks should be halved for those aged 18 to 24.

Enhanced checks are estimated to affect around 3% of online gambling accounts.

"Operators are already required to identify customers at risk of harm and take action, but there have been too many cases of interventions coming too late, or in some cases not at all. Having worked closely with the Gambling Commission, we consider it necessary to put new obligations on operators to conduct checks to understand if a customer's gambling is likely to be unaffordable and harmful," Secretary of State for Culture, Media and Sport Lucy Frazer said.

On March 28, the Gambling Commission said 888 Holdings PLC's William Hill Group had agreed to pay GBP19.2 million for social responsibility and anti-money laundering failures.

Around 300,000 people in Great Britain are estimated to be experiencing problem gambling, defined as gambling to a degree which compromises, disrupts, or damages family, personal or recreational pursuits, the government said. A further 1.8 million are identified as gambling at elevated levels of risk, it added.

The Gambling Commission plans to consult on mandating participation in a cross-operator harm prevention system based on data sharing. Reform of the way the Gambling Commission is funded will also be considered to ensure it has sufficient resources and a new ombudsman introduced for dispute resolution.

Gambling-and-betting company Entain PLC said it welcomes the review and has already implemented many of the proposals. "As a global and diversified business that operates in over 40 territories around the world, all of which are regulated or regulating, we are firmly in favor of regulation that preserves the market for the vast majority of customers who enjoy recreational betting and gaming, whilst also ensuring appropriate protection to all players," Entain Chief Executive Jette Nygaard-Andersen said.

Flutter Entertainment PLC said it welcomes the review which represents an "important and necessary change for the industry, as it looks to ensure all operators raise standards and make responsible play a priority, as Flutter has done with its Play Well strategy."

It said that the company has already removed GBP150 million of annual revenue from its U.K. business and that the gross incremental revenue impact from the measures being taken could be between GBP50 million and GBP100 million.

It added that the board doesn't see any incremental impact this year with changes occurring during 2024.

Write to Kyle Morris at [e-mail] and Ian Walker at [e-mail]

(END) Dow Jones Newswires

April 27, 2023 10:27 ET (14:27 GMT)

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