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Are new UK gambling regulations
threatening small businesses?

Small businesses have had cause for concern in recent years; shares in iGaming businesses have plummeted because of calls for a stake limit for online slot games. Fears these changes may have damaging effects and with increasingly strict regulations throughout the industry, have left small businesses in a panic.

New regulations

Gambling-related harm has become a big issue in the past decade with things coming to a head in November 2019 as an all-party parliamentary group lobbied the government to install a £2 maximum stake for online slot games.

That request compounded an already-worried betting industry after the enaction of a maximum £2 stake on fixed-odds betting terminals (FOBTs) earlier in the year.

The drop on the stock market of nearly £1.2bn for UK gambling firms confirmed their worst fears with online slot games at severe risk if the former request is approved.

Potential consequences

Slots games, like slots on Bet and Skill, make up a third of all UK gambling companies’ income with their worth approximately £2bn a year.

The larger companies experienced the greatest drops in share prices. Ladbrokes’ owner GVC, lost over half a billion in value with 888 losing 14% of its share price.

But, whilst large companies were hit, smaller businesses fared the worst. In an already ridiculously competitive industry, new casino comparison sites and slots companies will struggle indefinitely if the £2 stake is introduced. And, many foreign operators could block UK traffic too if UK regulations drop the maximum stake.

Already being squeezed

The news of a £2 maximum stake could almost be the tipping edge for iGaming small businesses. Already required to pay UK tax, POC tax, and make withdrawals easier for players who are used to quick and affordable choices, small UK iGaming businesses are entering scary times.

Large fines of millions in some cases have been dished out by the UK Gambling Commission (UKGC) for those unwilling to abide by regulations.

Difference across the pond

Whilst regulations tighten in the UK, across the Atlantic they are loosening. The Supreme Court’s lifting of the federal ban on sports betting in 2018 could lead to its legalization, giving disillusioned UK small businesses hope.

But, currently, operating in the UK sets to look more expensive with further regulations and law changes around the corner. This would be catastrophic for small businesses, especially when considering that changes to FOBT limits slashed UK gambling businesses’ profits when online slots give most companies a much higher percentage of income.

Not all small businesses will be able to shift their attention to the US, but for those that can, they are becoming increasingly likely to do so as the UK government clamps down.

Remember to always play at a casino with a license. Check for a UKGC license here.
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