Addressing the Government’s White Paper on iGaming
Posted by Harry Kane on Friday, May 6, 2022
When Tony Blair’s Labour government introduced the Gambling Act in 2005, few would have thought that the legislation would become so unfit for purpose in such a short period of time. Increasingly, the act has been described as “analogue legislation in a digital age”, as it was written without anticipating the surge in iGaming and remote betting that has occurred in the last 18 years.
More recently, we’ve seen particularly intense lobbying behind the scenes, while the All-Party Parliamentary Group (APPG) for Gambling-Related Harm has already made a series of proposals that would change the face of iGaming in the UK. This would also make provision for the rise of mobile gambling, with a white paper set to be unveiled in the coming months.
While the release of this paper has been pushed back at least four times, this has more to do with the delays caused by frequent changes in Prime Minister and significant political unrest in the UK. But what are the key battle grounds that are being discussed around the legislative reform, and is this truly necessary in the marketplace?
A Look at the Key Battlegrounds for Legislative Reform
Some of the initial reforms proposed by the APPG for Gambling Related Harm have been met with significant pushback, thanks largely to their revolutionary nature and the potential impact that they’d have on the marketplace in a relatively short period of time. Of course, these provisions have yet to be confirmed, but here’s a look at the key battlegrounds ahead of the white papers’ publication.
#1. The Introduction of Statutory Rather than Voluntary Levies
: Currently, iGaming brands and online sportsbooks make unique contributions to responsible gambling charities and active support for problem gamblers. This is a voluntary levy, however, and campaigners are pushing for this to be replaced with a statutory alternative as part of any legislative reform. This would address issues of transparency and improve the public confidence in iGaming brands, while GambleAware have called on the UK government to unveil a mandatory levy that equates to 1% of total GGY.
#2. Affordability Checks for Gamblers
: This is another key sticking point, with affordability checks thought by some to be unnecessary given that the average Brit wagers just £2.60 per week. However, campaigners have argued that such checks are still required for high rollers and those who participate in lucrative VIP schemes, with individuals required to provide proof of earnings and cash resources over time. A consultation is expected on the level at which affordability checks will kick in, but it seems inevitable that a provision of this type will be made in the white paper.
#3. Tighter Controls Relating to Advertising and Marketing
: Some members of the APPG have discussed the prohibition of online and digital advertising for betting brands, with these channels account for the vast majority of operators’ total marketing spend. It seems inevitable that some restrictions and much tighter controls will be introduced in relation to the promotion of iGaming brands across multiple channels, while the Premier League is also likely to agree a voluntary deal that will prevent betting firms from advertising on the front of shirts.
#4. A New Maximum Stake for Online Slots
: Perhaps the most controversial element is the potential introduction of a maximum £2 stake for online slots. This would be similar to the fixed-odds betting terminal (FOBT) cap introduced in April 2019, which slashed the maximum stake from £100 per spin to just £2. This saw the revenue at offline bookmakers slashed by 56%, while it also triggered a spate of closures and job losses nationwide. The introduction of a £2 cap for online slots would be similarly impactful, while brands would have to respond by reducing the payouts by the same margin.
These battlegrounds will undoubtedly be covered at length in the white paper, with lobbyists pushing aggressively for significant reforms and a cross-party demand for changes existing in Parliament. The question that remains, of course, is the extent to which the associated measures will impact on the iGaming industry and how much betting brands will push back.
Is Aggressive Reform the Right Thing to Do?
While the push for reform is huge and undoubtedly justified to some degree, it’s unclear whether introducing aggressive measures such as a £2 betting cap for online slots is either fair or fully necessary. Firstly, this type of headline measure doesn’t do anything to tackle the socioeconomic conditions that underpin problem gambling, or prevent players from wagering excessively across multiple channels and betting sites.
Secondly, there’s an ethical question surrounding the governments’ right to interfere in the iGaming sector in a what’s undeniably a free market economy. Certainly, the current government is selective when it comes to targeting the industries in which it wants to legislate, and while they can point to the impact of gambling-related harm in society to justify their stance, it’s important that any new measures are fair and proportionate.
It’s also crucial to ensure that any reform of the Gambling Act is effective, rather than simply attempting to garner headlines and present a no-tolerance approach to problem gambling. For example, previous talk of widescale betting limits for all players appear unnecessarily harsh, especially given the behaviour of most bettors and the amounts they wager online.
Of course, it will be interesting to see the full extent of the government’s white paper and just how far the aforementioned measures will go. Once thing’s for sure; the current government is likely to come down on the side of lobbyists as opposed to operators, so the iGaming market in the UK should brace itself for change and a period of transition.