UK triennial review findings: Industry reaction

The UK Government published the long-awaited findings of its triennial review this morning, including four potential options for maximum FOBT stakes, new funding for problem gambling adverts and stronger protections on online gambling products.

For the full details on the announcement click here.

Here’s what key industry stakeholders had to say about the announcement:

Ladbrokes Coral 

Ladbrokes Coral note the further consultation on the triennial review and will take an active part in providing evidence on all relevant areas as part of the process outlined today.

With regard to the suggested B2 maximum stake levels, we will contribute to the consultation as both Ladbrokes Coral and as part of the wider high street bookmaking industry. The process has been ongoing for nearly twelve months and introduced a prolonged period of uncertainty into our business. We welcome the further consultation as a positive step to reaching a final outcome and hope that the commitment to being evidence led will remain in place as we enter the decision making part of the process.

Clive Hawkswood, chief executive, Remote Gambling Association

There is a great deal to consider in this important paper and we will naturally want time to do so properly before commenting in detail and responding to the consultation. However, we completely support the Government’s intention to ensure that proportionate and effective safeguards for consumers are in place. We recognise there are concerns about aspects of gambling advertising and it is helpful that this paper can provide the basis for an informed debate about the issues.

The sections relating specifically to online gambling do not call for any immediate changes, but are much more a reminder to keep progressing with the work that is already underway. If it was not clear before then it really should be now that the industry’s effective use of data analytics will be a crucial factor in determining in the longer term whether we might be subject to more stringent regulation.

Joe Saumarez Smith, chairman, Bede Gaming

I get the feeling the government is sticking to evidence-based policy making which is reassuring. But, this seems like a last-chance warning for the online sector. The government is saying, regulate yourselves on responsible gambling, or we will do it for you. And legislation in things like this is never good. The industry now needs to go above and beyond the letter of the law, and all work together to come up with something that works and is workable.

I am concerned about GamStop (the national self-exclusion database). The consultation document suggest the government think this will be in place by the end of the year. But no-one in the industry has even received the technical specifications yet. They don’t know what they’re building so I think it’s very unlikely this will get done. The major operators need four or five months for this project. And I’m concerned the government will hold that up as an example and say, ‘we gave you a warning, and it hasn’t been done, so here’s legislation’.

The advertising restrictions do look lighter than feared. But again there is still the chance for thigns to change during this consultation period. Anyone saying the industry has got off lightly here is premature to say the least.

Paul Leyland, analyst, Regulus Partners

Our first take is that the government has committed clearly to FOBT stake reduction and probably further social responsibility measures, but the range of (theoretically) possible outcomes still covers the relatively benign to the highly severe – the politics of the situation tilts the likely outcome toward the severe, but this is by no means certain.

Other proposed measures are of much less immediate or even medium-term impact, though there is a clear sense that the UK industry – online especially – needs to publicly and meaningfully demonstrate much stronger responsible operation going forward to preserve anything close to the legislative – regulatory status quo

Simon French, Cenkos

The [FOBT] proposals are perhaps more negative for the industry than media leaks suggested with the £20 max stake option being only for non-slots (with a £2 max for slots) whilst the suggestion of increasing the downtime on spin speeds for roulette appears to be an unexpected negative.

In addition, there appears to be little unexpected change around advertising. The key measures are a two year responsible gambling advertising campaign, new advertising guidelines to protect those at risk of problem gambling and children and young people and ensure content does not encourage impulsive or socially irresponsible gambling and strengthening the code on responsible gambling advertising.

Warwick Bartlett, Global Betting & Gaming Consultants

After two years the DCMS has still not made a decision, but at least one will be forthcoming in 12 weeks, after yet more consultation. According to Government data the £2 stake would cause a loss to the industry of £639m, but only 17% of sessions end with an average stake of up to £2, so 83% of customers would be dissatisfied. So the potential loss of revenue could be almost double £639m.  I would be interested to see the assumptions made by the DCMS to arrive at this figure. The DCMS seems to be gambling (forgive the pun) that a lot of customers will bet on other products. The risk is that they are wrong and shops will close, causing significant job losses at a time when retail industry in general is slowing down, so there are fewer vacancies on the High Street to fill. The £2 stake is clearly too far to go, it would just drive gamblers elsewhere, and will do nothing to solve addiction”.

Goodbody

We accept that a fair conclusion is that while £2 is still on the table, the chances of it being introduced are less than they were previously. However, we would highlight that the media noise and subsequent political pressure over the next three months could also have an influence on the outcome. Elsewhere, the document does not suggest there will be any major changes to advertising put forward just more warnings, greater education and stricter rules and regulations. On first glance, we would not be surprised if some sector share prices reacted positively to this.

Ironic that shares of Ladbrokes Coral and Wm Hill are up this morning and @PPBetfair – which did dirty on fellow bookies – is down

— Dominic Walsh (@walshdominic) October 31, 2017

Victoria Pease, analyst at Edison Investment Research

The Fixed Odds Betting report doesn’t take any decisive action or provide clear conclusions and for now it means continued uncertainty for the industry and will likely postpone any meaningful conversation around M&A.

Marc Etches, chief executive of GambleAware

“There was a concern this review would focus narrowly on FOBT stakes, so we are pleased to see the government has acted boldly and taken a more holistic view of the risks attached to all forms of gambling, including online which will soon be 50% of the market.”

On advertising: We should treat gambling related harm as a public health problem, like alcohol or obesity, working on prevention as well as treatment. We’re delighted to be asked to lead a new, independent, multi-million-pound campaign to help raise awareness of the risks and the free help available. We need to get better at spotting problems before they reach crisis point, protect children with better education about risks and equip industry staff with the confidence to intervene and support vulnerable customers.”

On funding treatment: With 430,000 problem gamblers in need of treatment, we need all those who profit from gambling to fund our work.  The current voluntary system is not delivering. That’s why GambleAware is calling for a statutory levy, something we’re pleased to see the Government considering if the industry does not step up its efforts.”