Shares in UK gambling operators have fallen following the calls of an all-party parliamentary group for stricter measures to be imposed on the local online gambling industry so that British customers are better protected.
The cross-party group of lawmakers insists that tougher regulation needs to be imposed on online betting, saying that maximum stakes in online betting should be equal to the ones which were imposed for high-street slot machines earlier this year. They also call for a ban on the use of credit cards in online gambling sites, as well as for more responsible gambling advertising that could encourage more vulnerable people to spend more on gambling.
According to the campaigners, online gambling companies had exploited local gamblers pushing them to dangerous gambling-related consequences due to the little control from the country’s gambling regulatory body. Iain Duncan Smith, the vice-chairman of the all-party parliamentary group, criticised the UK Gambling Commission (UKGC) for what he called lack of action and failure to take the issue into consideration in depth.
As a result of the calls, shares in UK gambling operators lost almost £1.2 in value. The share price of GVC Holdings, 888 Holdings and William Hill fell between sharply fell following the recommendations. The largest decline was faced by GVC Holdings, which suffered a 10.5% share decline equalling to almost £547 million in lost value. The decline registered by William Hill amounted to £230 million, while Flutter Entertainment lost about £217.5 million.
According to The Guardian, British Prime Minister Boris Johnson was believed to be backing the calls for stricter gambling legislation and regulatory framework.
British Bookmakers Become More Focused on Online Gambling and US Expansion Due to Stringent Regulation in the UK
As Casino Guardian reported yesterday, the members of the Gambling Related Harm All-Party Parliamentary Group made recommendations regarding the maximum betting stake that should be allowed on online slot machines, urging the Government to impose the same maximum betting limit that is currently valid for land-based fixed-odds betting terminals (FOBTs). Earlier this year, the British Government finally implemented the long-discussed changes in the maximum betting stake allowed on the electronic gambling machines, slashing it from £100 to £2.
British retail gambling operators are still recovering from recent measures which the Government took to tackle the harmful effect of the gambling machines, which have been blamed for being one of the main reasons for spreading gambling-related harm. At the time when the new maximum betting stakes were unveiled, some of the largest bookmakers in the country warned that the changes would have a strong negative impact on their performance and would eventually result in the closures of some of their betting shops across the country.
Previously, GVC Holdings has revealed expectations to close approximately 900 betting shops in the UK, while William Hill has announced plans to shut 700 of its betting outlets in the country. Both companies have cited the stricter rules imposed by the Government for the expected closures.
Apart from that, the highly-competitive environment in the British gambling sector, combined with the tougher regulatory rules made most local gambling companies become more oriented towards bolstering their positions in the online gambling sector and shift their focus to further expansion to overseas markets. The recently-legalized sports betting sector in the US has been among the top expansion targets for British bookmakers over the last couple of years.
- Author
Olivia Cole
