There is a sense that the UK’s regulatory framework for iGaming, including online sports betting, is in a state of flux right now. The UK government’s decision to call a snap General Election for 4th July has led to the dissolving of Parliament. This has delayed the long-awaited reforms to the UK’s iGaming industry, which came out of the white paper carried out in conjunction with the UK Gambling Commission.
There’s no doubting that the UK’s iGaming market is one of the most competitive in Europe, if not the world. The UKGC remains one of the most respected iGaming jurisdictions on the planet. Several leading brands feature prominently in the London Stock Exchange, including Flutter and 888 Holdings, the latter of which recently rebranded to Evoke Plc. According to oddschecker.com, Evoke’s primary brand, 888, still boasts one of the most competitive campaigns for first-time visitors to its online casino.
Despite this competition and the esteem to which the UK iGaming market is held overseas, there was plenty of work that was expected to be done prior to the snap election. The decision of Prime Minister Rishi Sunak has expedited the collapse of talks between sportsbooks and Britain’s horse racing authorities over a voluntary deal regarding the sport’s levy, which underpins prize money for the industry.
Most reforms from the gambling white paper are on hold
Secondary legislation has also not yet been pushed through to enable new recommended stake limits of £5 maximum bets for those aged 25 and over, and £2 for those aged between 18 and 24. The UKGC was also expected to be handed enhanced powers to lock horns with the black market of the iGaming industry, where unlicensed and unregulated sites operate without oversight from regulators.
The fact that it will be a job for the next elected government to implement such provisions means there’s always the possibility of reforms falling off the radar. Nevertheless, there seems to be widespread confidence in the need to futureproof the industry.
Some of the potential reforms are more controversial than others, the most controversial of all being the affordability checks which could be imposed on players universally across the UK. The Gambling White Paper recommends the implementation of a system of financial risk checks, designed to improve standards and consistency among iGaming operators. If bettors lose a certain amount of money per day, week or month, operators must conduct frictionless “light touch” checks against a customer’s level of expenditure and their personal income.
Delving deeper into the concept of affordability checks
Although affordability checks are designed to identify those at risk of financial vulnerability, there is a sense that the checks will turn off the everyday punter that’s not prepared to disclose the level of information required on their personal income and how they spend their hard-earned money.
In fact, the impact assessments carried out within the white paper suggest that the changes could hit iGaming operators to the tune of £380-£710 million in gross gambling yield (GGY). Affordability checks will also affect the British horseracing industry and hit revenues with online sportsbooks. These bookmakers must commit 10% of their gross profits above their first £500,000 towards the UK Horserace Betting Levy.
With affordability checks seemingly the most anxiety-provoking measure in the white paper – in the eyes of both customers and operators – it’s highly likely that a pilot scheme for financial risk checks will be carried out before it becomes the universal approach.
At the time of writing, Labour appear to hold a definitive lead in the polls as Britain heads to the polling stations next month. David Brohan, an analyst of the gaming and leisure industry for stockbrokers Goodbody, doesn’t anticipate this year’s proposed reforms to be scrapped altogether regardless of who wins July’s election.
Brohan said “sweeping changes” to the proposals are unlikely because the white paper itself had generated cross-party support at a broad level. In terms of revenue, the UK’s iGaming market is expected to generate the second-highest in the world after the United States. Many other iGaming markets will be looking to the UK market with intrigue as to the next steps for regulatory reform.
