Lawmakers have fixed their sights on online gambling, and are hoping to bring in a £2 stake limit similar to the one introduced on fixed-odds betting terminals (FOBT) earlier this year, raising the prospect of regulations weighing further on bookies profits.
The Gambling Related Harm All-Party Parliamentary group – which advocated for the limit on FOBTs – has released a report urgently calling for new legislation to introduce limits on stakes and prizes for online gambling, as well as improved affordability checks.
The group began investigating online gambling after successfully advocating for the FOBT stake limit to be reduced to £2 from £100. The move has severely impacted profits among the UK-listed gamblers, with William Hill taking an £883m non-cash impairment to reflect the changes.
Calls for regulation should hardly come as a surprise – the group did, after all, begin investigating the sector in February – but the report’s release was still enough to prompt a drop in the share price of many of the gambling groups. Shares in GVC (GVC), William Hill (WHM) and 888 (888) all closed down more than a tenth on the day.
Besides 888, which makes around 35 per cent of its revenues from the UK online sector, the gambling groups do not tend to break down online sales by geography, making the impact of any regulation difficult to gauge. However, Numis estimated Gamesys (GYS) had the most exposure, with 65 per cent of online sales coming from the UK, while Flutter Entertainment (FLTR) and GVC had the least, with 13 per cent each.
A spokesperson for GVC said the “over-regulation” the parliamentary group was advocating “would be highly counterproductive and do far more harm than good”, arguing it could push customers towards the black market. Instead, it called for better use of technology, further research and improved methods of identifying and addressing problem gambling.
For all the prospect of regulation of the online gambling sector was at least partially on the radars of companies and investors, the report offers little by way of clarity over timescales for implementation or financial impact if the proposals are adopted.
Indeed, the group’s investigation into the sector is ongoing – the report is only an interim report, and the group has yet to speak to the UK under secretary of state for arts, heritage and tourism and the chief executive of the Gambling Commission, the UK’s gambling regulator. Analysts at both Numis and Peel Hunt speculated the release of the report may have been timed in an attempt to get the proposals adopted in the major parties’ manifestos for the upcoming general election.
