The UK gambling industry has witnessed two pivot moments in its history: The first one was the introduction of the 2005 Gambling Act, which allowed gambling firms to expand their operations through online and mobile platforms, yielding new highs on revenues every year, as gambling became more popular and socially accepted. 15 years later, the Coronavirus pandemics exposed how deep can be the harm caused by the influence of gambling firms to a secluded population. Regulatory bodies are forced to pull out several restriction measures to protect the population.
Not willing to lose momentum in their gains, operators claimed the negative effects of stricter regulations being successful deterring or slowing their enforcement in the past. However, with nearly 400,000 people (children among them) classified as problem gamblers, the claims have worn out their effects, as the evidence points them as exaggerated, dodgy, and a futile attempt to prevent the inevitable.
Jobs Will be Lost
By September 20019 the gambling industry provided at least 98,174 across online platforms and brick and mortar venues. Only in land-based betting shops, over 46,000 employees working on 8,500 stores across the UK. The situation changed after the approval of a cut on Fixed Odds Betting Machines (FOBM), reducing stakes size from £100 to a maximum of £2. .Industry lobbyists claimed that nearly 4,500 stores will get closed, dragging 21,000 jobs with them, because of the restriction.
The harm caused to customers by FOBM as they were able to gamble away thousands of pounds in a matter of minutes by playing the maximum stake, led to such drastic measures.
Despite the alarming number provided by the industry, stores only decreased by 639 to 7,681 in the first full year with reduced FOBT income. As a result, customers have only dropped £700m to £2.1bn from FOBT, while major sportsbooks in Europe are on the rise and seemed to gain major benefits from the stake cut. Rather than getting constricted by the weight of regulations, the disappearance of high street stores and their employees obeys strategic decisions. Bookmakers have wooed customers to their online platform where operation cost are much lower
As a whole, the industry perceived a 3% annual decline in betting shop revenues but increased the participation in other segments, like the lottery with a £300m jump in revenues. By far, the stake reduction only slowed down problem gamblers but allowed operators to keep pushing the revenue pedal.
Firms are Committed to Protecting Customers
Saying that all operators are failing to comply with customer protection is a harmful generalization. Unfortunately, the majority of them don’t seem to match their actions with their promises.
Failing cases to comply with KYC and money laundering standards, are scattered all over the industry. The £11.6 million fine on Betway for allowing VIP customers with problem gambling issues funding their accounts with stolen money is just another example. Breaches like: allowing a customer to open 11 accounts gambling near £500,000, despite having requested his self-exclusion on several of them; or accepting £8m on deposits from a single customer who was flagged 20 times as a potential risk, while losing £4M during four years, only suggests little to no regard for the welfare of its VIP customers, and the impact on those around them.
The fact that 500 annual suicides are gambling-related, only adds fuels the fire. One notorious case was the death of Chris Bruney. The 25-year-old bettor committed suicide after accumulating over £34K in losses with PT Entertainment Services. The company faced a £3.5M fine but could avoid its payment, by surrendering its license. Bruney’s parents and supporters could only feel betrayed as they wouldn’t understand how the Gambling Commission allowed the company to close down before there were regulatory actions.
Even regulators have been accused of complying with gambling firms to keep exploiting vulnerable people, by allowing them to wash their hands, pay the fines or surrendering their licenses. The weight of the evidence crushes any lobbyist attempts to change the perception towards the gambling industry as corrupt and predatory, leading to the promotion of blanket regulations that will force regulators to push the boundaries, if necessary, to harness the situation.
Sports Might Disappear
Sports and betting have a long time relationship thanks to sponsorship. The financial support that teams, players and even whole leagues earned thanks to gambling sponsors, has helped develop professional careers, local communities, supplying apparels, training facilities, and even build stadiums. Football, in particular, has become the most popular sport in the UK and the world. Something that has made operators fight for a place in the spot with sponsorship branding across the player’s uniforms, and visible adverts on the field and sports comments.
The investment made through sponsorships has paid larger dividends to betting firms thanks to the increased exposure earned. Unfortunately, it has also drawn its collaterals. Children and vulnerable people end targeted by betting firms’ messages enticing viewers to bet, in an indiscriminate basis.
The fact that 370,000 children between 11 and 16 years bet at least once a week and the increased exposure to gambling ads during COVID lockdowns has led to a total ban of sports sponsorship.
Both industry and sports representatives predict that the measure will cause severe havoc on sports. Bigger teams in consolidated sports like football can withstand its loss. However, smaller clubs and sports like snooker and darts that strongly depend on these sponsors will find themselves struggling.
A similar situation presented when in 2002 tobacco advertising was banned. The snooker and Formula 1, players, teams and promotions end crippled for a couple of years but still are operating, ironically, thanks to gambling. Although betting firms are the most widespread contributors, they aren’t the largest. Even without the presence of betting firms, the US sports industry receives a staggering £12,88bn ($17.87bn) in annual sponsorships compared to the 2bn perceived in the UK, revealing how appealing are sports for non-gambling sponsors.
Black Market Threat
With a gambling culture so deeply ingrained in the UK society, banning it seems to be the last option for regulators. After all, people will find the means for gambling being legal or not. However, for gambling lobbyists, the menace of people migrating to black market operators because of strict regulations is a restless concern.
Gambling firms addressed a report claiming that 200,000 people in the UK spend £1.4bn on black market sites every year, warning that tougher regulation could drive more people into the arms of Curacao eGaming operators.
However, their claims are held as exaggerated. For UKGC executive chief McArthur the report has been deemed as a “dodgy dossier”. When a copy of the report was requested to the British Gambling Council (BCG) and several of the UK’s major betting companies that commissioned the report, they all refused to provide it.
For the UKGC spokesman, concerns towards the black market are held in proportion. Standards will continue to be raised making gambling safer in the regulated market “despite reports from consultants paid for and by the industry“, reflecting the unbendable commitment that the UKGC has taken.
For years gambling operators have overstated their actions and risks in an industry that has shown being exploitative at best. No matter how much firms and lobbyists claim their compliance with moral laws and regulations, their acts will always say more than words. Until operators understand their duty to protect their customers, the industry will be facing harder regulations against it over time until they understand that lives matter more than profits.