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Are new UK gambling regulations
threatening small businesses? |
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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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