Study Conducted by Bestnongamstopcasinos UK
TALLINN, Estonia, May 30, 2024 /PRNewswire/ — After much discussion, a new initiative aimed at implementing further regulation in the gambling industry has been approved by parliament. Multiple stages of new affordability checks are to be introduced for people incurring financial losses to a certain amount from this August. The pilot programme, which is designed to protect players using online casinos or sports betting platforms from getting into financial trouble through gambling, will run for six months starting on 30th August and is designed as a two-stage approach. The first stage of affordability checks focuses on “invisible” checks on players losing £500 a month through gambling. This amount will drop even lower to £150 from 28th February 2025. The second stage involves closer scrutiny of players incurring losses of £1000 in 24 hours or £2000 in 90 days. After the six-month trial elapses, there will be a brief period of assessment to measure the effectiveness of the pilot scheme.
The initiative, which is viewed as the most drastic clampdown on the gambling industry in history, has already incurred the wrath of many operators and investors within the gambling industry, with many already worried not only about the short-term effects, but also the long-term consequences on their daily business and operations. The topic has caused huge debate amongst the public, from top politicians to industry insiders to users of gambling platforms and the debate will not likely dissipate anytime soon. Regardless of the outcome next year, the initiative has sent shockwaves around the gambling industry in what is potentially seen as a period of make or break for the gambling industry.
Our expert team at Bestnongamstopcasinosuk have put together this study and research on just how this is going to impact the industry, as these new regulations and changes continue to be rolled out in the near future and what we can expect to see off the back of these.
Protect the minority at the expense of the majority
The topic of affordability checks has been a divisive one since the initiative emerged in the mainstream, but the conversation is not a new one within the gambling industry, and indeed society. Since the UK Gambling Commission (UKGC) was established in 2005 on the back of the Gambling Act being passed by parliament, one of the primary objectives of the Commission was to protect children and vulnerable people from harm. In the proceeding years, there were a few initiatives that brought the topic of vulnerability into the spotlight. In particularly, the British Gambling Prevalence Survey in 2007, which provided statistics about the demographic of person gambling, what they were gambling on, but more importantly, what percentage of gamblers were at risk.
The overall findings revealed that there had been minor change since 1999 in the prevalence of problem gambling. Based on internationally recognised metrics, The Diagnostic and Statistical Manual for Menal Disorders, Edition IV (DSM IV) and the Canadian Problem Gambling Severity Index (PGSI), the UKGC using the latter found that 0.5% of adult gamblers had gambling issues. Once exclusive players of the National Lottery were removed from the findings, this DSM IV percentage rose to 1.2%. These figures might appear relatively low, but once the findings on low and moderate risk gamblers are put under the spotlight, the values jump to 5.1% and 1.4% respectively, highlighted a greater problem amongst gamblers.
Even as of 2022, the PGSI was down to 0.2%, but that value is still enough to prompt a pilot scheme on a wider scale, an indication that the minority does trump the majority when it comes to gambling issues. The strategy employed by the UKGC is the safer avenue, but that has not stopped hundreds of thousands of people petitioning against the affordability checks. To be exact, 103,537 people from all over the UK signed a petition set up by the Jockey Club against such checks. Although individual reasons for signing the petition are unstated in the anonymous movement, there is further fallout found online that suggests that there are other violations that could result from the affordability checks.
Invasion of privacy or protection of the vulnerable?
One of the main arguments against the new affordability checks is the potential access that those carrying out the checks would have into individual’s personal accounts and information. In an age where a lot of everyday life is carried out in the digital realm, the protection of personal data has become a greater priority in people’s lives and the idea of a credit agency snooping around personal accounts, be it bank or online casino, is unsettling for a vast majority. However, not only will people feel potentially violated by this intrusion, but individuals might also need to provide evidence in the form of payslips and bank statements that they are not liable to financial risk if they choose to play online casino games or bet online on sports.
It is a fine line the Gambling Commission has to toe, with the protection of those vulnerable the outstanding argument for the implementation of this initiative. The powers responsible have constantly reiterated that any checks would be “frictionless” and “unintrusive” but without any tangible evidence of that, it will remain hard to persuade the public of that aspect. Although the risk assessments are predicted to be aimed at approximately 3% of gambling accounts, there are still many people sceptical of the actual need to comply with the checks. According to a survey conducted by YouGov, 65% of online gambling users were unwilling to comply with the affordability checks. Couple that with 70% of people that would resist preliminary “fitness” checks before gambling (EY for the Betting and Gaming Council), there is much work to do for the Gambling Commission to persuade the majority that the protection of vulnerable peoples should be the overriding objective.
More clarity about how the process works is always an advantageous method to convince people of the overall benefits of such a significant change in online gambling and would go some way to quell some of the uproar from certain sectors. The UKGC opened up channels where individuals could voice their questions, concerns, or general input. The overarching aim of course was to provide complete disclosure on the initiative but also to explain how seamless and frictionless any checks would be to help put any unsettled minds at ease. However, in the opinion of many, the pilot scheme initiated by the UKGC could be seen as an obstruction to the freedom individuals expect to have not just when gambling online, but in society and life in general. Protection vs Freedom is essentially the argument at hand for the UKGC to consider and ensuring that the process is as transparent as possible by working with the public on consultation platforms is one way to prove good intentions. Ultimately, the outcome of these consultations should provide a more balanced approach to the proposals in what is seen as a pivotal moment for the UK gambling industry.
A nervous wait for the gambling industry
The importance of this new initiative and the concern felt is understandable when one considers the substantial number of people working in or involved with the gambling industry. This could range from roles within online casino, sponsors, marketing companies, investors, even football teams or whole individual sporting industries such as horse racing. The advancement in technology has propelled gambling, especially the online kind, into a new financial stratosphere, and has created a new avenue of profitability that matches up with the constantly evolving online world. As a result of its success, many interested parties from other industries have started to become more involved with the gambling industry. However, the more players involved, the more people that stand to lose something.
For the gambling industry, the pilot scheme poses a massive threat to the industry as a whole and if the pilot scheme is successful, and the planned changes are implemented officially, nervousness might turn quickly to panic at how those involved in the UK gambling industry would proceed. Online casinos for example are already having to deal with the new limit imposed on online slots play by the government which will come into effect in September. The new regulation on online slots, which caps a stake at £5 for adults, and £2 for younger players, is part of the wider attempt that includes the pilot scheme to better regulate the gambling industry in the United Kingdom, but mainly implemented to protect the vulnerable.
The most striking impact for the UK gambling industry with new limits and checks imposed would be witnessed in the income margins. With regards to online casino, the industry is expected to lose £170 million as a result of new online slots limits imposed, which equates to 1.5% of the annual income of £10.9 billion. A reason for this is that players would simply go elsewhere, potentially to overseas online casinos that do not have the same restrictions as UK-licensed online casinos would. Players going elsewhere is a major concern for online casino operators, especially with the range and potency of virtual private networks (VPN) nowadays. The ability to connect and play on non-UK online casinos is remarkably simple nowadays, and the affordability checks are seen by the gambling industry as another reason for players on UK platforms to seek the emergency exit and take their money abroad.
It is an unsettling period for all involved in the gambling industry, but one shred of hope for companies within the industry is that investors were still willing to support online casino ventures when the announcement about online slots limits was made on Wednesday 21st February, with shares in big players such as Ladbrokes and 888 rising faster than the FTSE 100. However, it will be a long, nervous wait to see how the freshly imposed affordability checks affect the thinking of players and their consequent actions.
Is horse racing in the UK likely to suffer the most?
While the online gambling world in the UK will be nervously awaiting the outcome of the affordability checks, physical establishments could also be counting the costs of further spending restrictions put in place on gambling. Horse racing has been an institution in the UK for centuries, and betting on the sport continues to play a crucial role in the funding of the sport. Although affordability checks do not affect physical bets being placed, there might be a potential ripple effect felt if online betting platforms are severely affected by the pilot project affordability checks.
In the UK, some of the biggest sponsors of horse racing are online betting services such as Bet365, Unibet, BoyleSports, and Sky Bet. These companies provide huge financial support to racecourses up and down the country, which is put towards the upkeeping of racecourses, promotion, prize money, indeed all aspects that contribute to the successful running of horse racing. For a racecourse such as Cheltenham for example, which hosts the famous Gold Cup, they rely heavily on Sky Bet’s sponsorship of the Cheltenham Festival to maintain its standing in the horse racing world in the UK and Europe.
However, the horse racing industry right now is facing its own challenges with the incoming affordability checks pilot scheme a potential contributor to them. According to records from the last financial year, the turnover created by online betting fell by £1.75 billion. This is a staggering amount, and online bookmakers are concerned that this amount will only increase if the government is successful in pushing through affordability checks. The UK is renowned worldwide for being one of the greatest destinations for horseracing that attracts the biggest owners and jockeys at classic races and events such as the Gold Cup and Royal Ascot. The UK gambling industry will want to keep it that way and the Jockey Club particularly will be hoping their organised petition gets some legs.
What can we expect over the next year?
The whole gambling industry is holding its breath for the outcome of the affordability checks pilot scheme. Since the announcement was made, there is a chance some individuals might have already altered their gambling habits in advance of potential checks entering their lives. However, the vast majority, especially those not incurring losses to the amounts specified in the scheme, will likely continue as normal, but will still be wary. Regardless of the level of involvement as a provider or a user, the government’s white paper has certainly dropped a bombshell in the gambling industry.
Asides from the financial aspects, there are many other potential side-effects of any checks that are put in place in the future, perhaps most significantly on the general societal attitude surrounding gambling itself. For the main beneficiaries within the gambling industry, the fight against these potential affordability checks will continue, but regardless of the outcome of the pilot project, many within the industry are seeing this as a watershed moment for the gambling industry.
References:
PGSI & DSM IV (2007): https://www.minutes.haringey.gov.uk/documents/s18211/British%20Gambling%20Prevalence%20Survey%202007%20executive%20summary%20-%20July%2020081.pdf
Petition: https://petition.parliament.uk/petitions/649894
Online slots limits: https://www.theguardian.com/society/2024/feb/23/online-slot-machine-stakes-capped-great-britian#:~:text=The%20amount%20that%20can%20be,how%20much%20punters%20can%20wager.
Ascot 2022 turnover : https://www.ascot.com/news/ascot-racecourse-announces-2022-financial-results#:~:text=2022%20business%20summary&text=%2D%20Turnover%20rose%20by%20161%25%20to,and%20admission%20revenues%20recovering%20strongly.
Loss horse racing betting revenue: https://www.racingpost.com/news/britain/revealed-the-real-cost-of-the-huge-fall-in-racing-betting-turnover-a8rwu5W3rCRF/
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SOURCE Bestnongamstopcasinos UK
Originally published at https://www.prnewswire.com/news-releases/new-affordability-checks-a-watershed-moment-for-the-gambling-industry-302159329.html
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