UK Gambling Industry Trends Expected in 2018

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Monday, March 5th, 2018 | Written by Shane Larson

This year, the UK Gambling Commission is expected to implement a number of sweeping changes to its regulations which will have a dramatic impact on the way the industry is run. One of the major new standards implemented relates to stricter rules being imposed on the advertising of gambling products, with the development designed to tackle a growing level of problem gambling in the country, with up to 2 million people currently believed to be either addicts or at a high risk of developing an addiction problem.

Stricter Advertising Rules

In 2017, the UK Gambling Commission (UKGC) and Advertising Standards Authority (ASA) came down heavy on gambling firms operating in the UK, with hefty fines having been handed out to companies deemed to have flaunted the regulators’ strict set of procedures and rules. This included the likes of Ladbrokes, Sky Bet, and Casumo all being penalized for using advertising that appeared to target vulnerable customers.

This trend has subsequently continued into 2018, and in February further rules have been introduced to protect compulsive gamblers from becoming further targets of online gambling firms. This includes internet gambling companies not being allowed to promote gambling as a money making venture; not using the phrase “Bet Now” to encourage gambling during live sporting events; or promoting Risk Free” bonuses which are misleading and require a customer to deposit money into an account before receiving their so-called free funds.

Another aspect of the UK’s gambling industry which has also been scrutinized by the country’s regulator and been found wanting is the use of unfair withdrawal policies that make it more difficult for players to cash out their funds through the setting of unreasonably low withdrawal limits over a day, week or month period. In addition, the way in which scantily dressed women are being used to promote gambling products is also now subject to stricter monitoring, with companies being warned not to advertise and promote their gambling products in such a way as to cause gender and stereotyping related offense.

Reduction in FOBT Stakes

In 2017, the issue of Fixed-Odds Betting Terminals (FOBTs) appeared on the radar of the UK government, and in particular their addictive nature, and higher stakes than other slot type machines in which a gambler could lose up to £100 every 20 seconds. Furthermore, FOBTs are even being used by money launderers to clean some of their ill gotten gains, making it an matter of urgency for the UK government to reign in FOBTs, with a decision on a reasonable reduction in their stakes expected soon.

In fact, FOBTs are expected to have their maximum stakes reduced from £100 to as low as £2, which would certainly help to address some of the concerns already mentioned. Nevertheless, such a move will undoubtedly hit the bottom line of operators such as William Hill and Ladbrokes Coral, which both operate thousands of these machines in their numerous high street bookies. In fact, last year gambling companies collected £1.8 billion from FOBTs, or half their annual revenues, and news of their imminent stake reduction has already caused betting companies to have £660 million of their stock values wiped out in January.

Mergers to Offset Losses

The imminent overhaul in FOBTs stakes, as well as the subsequent drop in revenues for betting companies, is likely to lead to an increase in mergers as firms try to offset their land-based losses by partnering with online based operators. GVC Holdings and Ladbrokes Coral, for example, are expected to seal a £4 billion merger deal soon, although the eventual price will be ultimately be determined by how low the UKGC will set the new betting stake for FOBTs.

Other mergers which may also be considered this year includes William Hill and The Stars Group, or alternatively William Hill and the Rank Group and 888, which has the potential to create the biggest gambling company in the UK. So far, William Hill has rejected both offers, although the upcoming stake reduction in FOBTs may soon motivate it to reconsider its position.

Progressive UK Market

Despite the dramatic changes currently taking place in the UK’s gambling industry, the market remains not only one of the world’s most lucrative gambling markets worth, but also one of the most progressive. Further strict monitoring of the industry is expected to help it to grow further beyond its current £4.5 billion a year size, whilst also ensuring that some of the social problems associated with the industry are also kept to a minimum.