Historically the UK has been heralded as one of the most tightly regulated, safe and successful gambling markets. A benchmark; renowned for regulatory compliance and customer protection, the framework that both existing and emerging gaming jurisdictions have come to follow. And yet the question remains – is this now unsustainable due to the level of regulatory restriction being imposed? The tax hike has already seen major changes, with market leaders exiting the UK market and paying their taxes elsewhere. It has to be noted here that the UK are not the first to attempt these changes, the Netherlands has recently evidenced their reality of a tax hike…. An increase of approximately €2 million in additional revenue rather than the predicted €108 million.
The benefits of a strong gambling market should be self-explanatory. From the taxation to the spend in the local economy and with UK companies, the employees, the player protection – not to mention the sponsorships and the partnerships with sports. Safer Gambling week is coming up next month, and I have already had conversations with excited compliance teams wondering how they can improve their player protection measures this year. New initiatives are being launched all the time, from providing powerful protection tools to customers themselves, to putting account restrictions in place earlier in a customer journey. All aiming to create a safe environment for a customer to enjoy their gambling.
The illegal markets (black market, grey market, offshore market – anything other than operators with a UK gambling licence) has to be an important part of this conversation. Gambling will not disappear if it is over regulated in the UK. It will go underground. No one on the right side of the regulation benefits from this; less protection, less tax, less spend.
There is a very dark side to the illegal gambling scene. The money laundering and proceeds of crime being rinsed through the system, the organised gangs using the frameworks to communicate, the complete lack of player protection on some sites- from actively targeting vulnerable customers to taking funds and disappearing. This is not all offshore gaming companies of course – there are several licensed in other jurisdictions with excellent customer service and protection levels… why are they not licensed in the UK you might ask? The hoops to jump through, the costs of doing so and the ever present threat of enforcement alongside a 40% tax may not seem particularly worth it.
Furthermore, why would customer’s choose to use these sites? Lack of awareness of the lawfulness of a site, better RTP (return to player – the amount you might get back from your £1 spend) and strong advertising, particularly to young people on sites like tiktok. There also tends to be less friction, and less shame. They are more secretive and anonymous… a huge driving force from the ethical gambling contributors recently has been to try and remove any stigma from the industry and make sure that safer gambling tools are used by the majority of players. The government, or parallel forces, appear to be doing the opposite, driving stigmatisation with increasing calls to remove the industry from the conversation on safer gambling all together.
The UK market could be thriving, and there are increasing requests from overseas entities to try and break into the UK sponsorship market, to partner with a world class team and plug more funding into the sport… which inevitably trickles down to grassroots and helps schools and clubs to fund their players and their kit. There is still a huge interest in gambling globally, particularly in online gaming and the entertainment side of this leisure industry. If you look to the States and watch the predication markets exploding that tells you all you need to know about the younger generations. We have a form of predication markets here already – betting exchanges – so we are unlikely to see the same boom, but it is still interesting to watch the new trends emerging.
When looking at the non-remote sector, the high street bingo, betting, adult gaming centres and casinos, the story is strangely the same. Despite successfully campaigning against the same tax hikes that have hit the remote sector, the same questions are back and once again the bricks and mortar gambling premises are preparing themselves for a rough winter.
Similarly, a recent labour initiative being mooted is the ‘Amazon tax’. An effort to prioritise and reward the businesses that bring social benefit and aid the local economy. But not gambling premises, despite them bringing all of the above. Overall the government attitude increasingly feels aggressive towards these wholly lawful businesses. It has been uplifting to see the stories being shared by betting, arcade and casino operators of their positive impact on the local communities, applauding their staff and demonstrating why they still deserve their place on the British high street.
All in all, gambling is a leisure industry. The responsible operators are just that; responsible. The vast majority strive for best practice and do their utmost to ensure those using their sites and premises do so for fun and within their means. Huge levels of investments, into both people and systems, takes place across the board to help identify and proactively help and prevent individuals from suffering from gambling harms. It is an industry that we should be proud of, for being innovative and proactive.
Amanda Usher
amanda@woodswhur.co.uk