UK ministers reportedly mulling maximum online stakes, banning promotions; BGC warns of negative industry impact

As the United Kingdom updates its 17-year-old gambling legislation to address concerns about problem gambling, ministers are considering allowing maximum stakes of between £2 ($2,43) and £5 ($6,08) for online casinos, as well as a ban on free bets, the Times reported Wednesday. Prime Minister Boris Johnson and other cabinet ministers are expected to sign off a final decision within the next week. 

The media report added that gaming companies could also be required to remove features from online games that increase the level of risk for customers, such as quick games. They may also have to implement “affordability checks” to show how much users can safely spend, people familiar with the matter said. Meanwhile, the UK Gambling Commission would be granted new powers along with extra funding from increased fees paid by the industry. 

Prime Minister Boris Johnson.

Even though investors may be relieved that the proposed legislation has been described as "relatively benign" by some experts, the UK's Betting and Gaming Council (BGC) on Tuesday warned that, according to new data, a ban on promotions including so-called "free bets" would push almost a third of customers to the black market while "sucking millions out of horse racing."

While some campaigners have demanded the Government introduce a complete ban on customer promotions in its upcoming reforms of the Gambling Act, the trade body says 69% of bettors believe they should be allowed. 

New research conducted by YouGov on behalf of the BGC found that 63% also said that they found promotions a "valuable part of their hobby." Almost one in three customers (28%) said they would consider black-market betting "if ministers ignored their popularity and forced through a draconian ban."

In the UK, customers must request promotional offers when opening an account with a regulated gaming operator and can stop receiving them at any point they choose, the BGC explains. The analysis conducted on behalf of the association also found the move would hit the horse racing Levy by approximately £5 million ($6.09 million) a year.

In an official press release, Chief Executive of the Betting and Gaming Council, Michael Dugher, said: “Promotions and offers are part of the customer experience for any vibrant industry, including our intensely competitive sector, which supports 119,000 jobs and brings in £4.4bn in taxes to the Treasury."

Chief Executive of the Betting and Gaming Council, Michael Dugher

According to Dugher, "bans on offers would be anti-punter and would severely degrade customer experience, punishing the overwhelming majority of punters who bet safely." He further remarked problem gambling is at 0.2%, meaning a majority of gamblers currently bet in a non-problematic manner.

“A draconian ban would damage a sector which tens of thousands rely on for their livelihoods, by turning punters away from the regulated industry into the arms of unsafe, unregulated black market gambling, where the numbers using such sites has doubled in recent years and the amount bet is in the billions," the BGC head said. "These black market sites have none of the safer gambling tools the regulated industry employ."

A move like that would also hit the horse racing levy for £5m, according to the association, "but the loss of punters to the unregulated black market would undoubtedly also hit other regulated funding for racing such as media rights and sponsorship," the BGC warned.

“We support the Government’s ‘evidence-led’ approach to gambling reform, which is why any changes should be carefully targeted to protect vulnerable players and those at risk, not the vast majority who bet safely," the industry association said. "Ministers shouldn’t be sticking their nose into how people choose to spend their own money, and the last thing they should be doing at this time is damaging business and sport."

As part of the upcoming review, the government is also reportedly eyeing the possibility to relax regulations for land-based casino opertors, allowing them to install as many as 80 gaming machines, up from 20. Casinos will also be able to extend credit to wealthy foreigners as part of an attempt to level the playing field with online gaming companies. 

It was also disclosed by the Times that proposals to prohibit gambling companies from shirt sponsorships were set to be rejected in favor of reaching a voluntary agreement with Premier League clubs. Clubs would be encouraged to abandon such prominent deals voluntarily, with the government retaining the option to introduce legislation in the future.

The Government is expected to announce the new restrictions on the industry as part of its review of the 2005 Gambling Act, amid concerns regarding the growth of online betting. According to local media reports and recent comments from industry stakeholders, the publication of a much-awaited white paper on the matter appears to be imminent, although it still lacks a date.