Some of the UK’s largest betting companies have taken a big hit to their shares this week. The impact comes after British MPs called for new gambling restrictions to be put in place for online casino games.
The UK Gambling Commission and members of the Labour Party have been urging for a change in regulation for the last few weeks. Right now, the country’s Responsible Gambling Week is in full swing, and the event looks to promote the importance of safe gambling and help those at risk of developing an addiction or disorder.
Despite casino capitals like Vegas and Macau, the UK is considered the land of gambling in many parts of the world. They have betting shops and kiosks on almost every corner, and both sports betting and pari-mutuel betting are 2 of the most profit generating markets.
Recently, it’s become more and more apparent that slot machine games pose the highest risk in regards to addiction and financial turmoil for many gamblers. These machines would allow people to mindlessly pump in up to £100 a time before MPs called for new rules. Now, the Gambling Related Harm All Party Parliamentary group wants there to be £2 limit per bet for slots. The same currently applies to fixed odds betting terminals which critics dub as the “crack cocaine” of gambling.
“There is no justification for having slot machine style games online with staking levels above £2, in line with land-based venues,” the APPG said in an interim report published on Monday. “It is possible to bet thousands of pounds in a matter of minutes from a mobile phone with no supervision.”
Labour have also been pushing for a ban on credit cards used to gamble online.
MP for Swansea East and chair of APPG, Carolyn Harris said how her party “intend to go after the online companies just like we did with the fixed odds betting terminals… The consequences of this on people’s lives are absolutely unbelievable.”
Stakes were cut for fixed odds betting terminals in April; reducing the betting limit from £100 to £2. This has had a significant effect on betting companies, who are now seeking other ways of boosting revenues. Since July, the betting firm GVC saw an 18% drop in their retail business, while their online revenues went up by 12%.
On Monday, online betting giants like Ladbrokes Coral, Bwin, Partypoker and Sportingbet all saw their revenues drop by 10.5%, while William Hill saw a decline of 12.5% and 888 Holdings shares dropped 13.9%.
An analyst for William Hill told press “Investors weren’t expecting this. The main things which certainly surprised me was the maximum stakes online, the fact they put a number on it. “
MPs feel that reducing the stake limits to £2 for online games will prevent problem gamblers from “doubling up significant sums with each successive bet” and chasing after their losses. Online gaming groups contesting the new stake limits and pointed out that internal data used to identify players is the most practical way of assessing whether they are at risk of problem gambling.
MPs also cited in their report how online gaming revenue went up from £1.2bn in 2007 to a colossal £5.6bn in 2018. Data reveals that the increase is mainly coming from smartphone users.
Last week the Gambling Commission was being scrutinized for not having looked into the issues surrounding max betting stakes allowed online. Some even went as far to say that the regulators are not “fit for purpose” and that they “do nothing at all except dole out arbitrary fines on certain occasions. There’s no consistency.”
The commission was said to have taken offense to these remarks, retorting with the fact the report had been released before they could react or give any evidence against the case.
William Hill and said that “a flat £2 stake is likely to push players into unregulated sites. There’s massive potential for unforeseen consequences.” 888 declined to comment on the recent events.
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