Tuesday, 5 November 2019

Shares In Gambling Firms Drop After MPs Call For Regulation Overhaul

Gambling Online

Shares in several UK gambling firms have dropped this week after The Guardian revealed that a group of cross-party MPs were looking to introduce a maximum betting limit on online slot games.

Reports have revealed that several UK gambling firms have lost around £1.2 billion following the announcement in which the cross-party group on gambling-related harm called for the betting limit on slot machines, as well as tougher online regulation regarding VIPs, mandatory affordability checks and an end of credit card use at online casinos.

The group, which was behind the recent change to the maximum stakes on fixed-odds betting terminals, hope they can convince the Conservative policymakers to include tighter online gambling regulations as part of the party’s manifesto in the upcoming general election.

According to The Guardian, the maximum £2 stake limit suggested by the group would severely impact online casinos’ income, a third of which is made from online slot games. This, in turn, would devastate the online casino market as online casinos, particularly smaller brands, struggle with the shake-up.

In response to the group’s announcement, online casino stocks were sold-off on Monday, causing numerous brands to lose large percentages of their values. Reports suggest that 888 Casino took the hardest hit by losing nearly 14% of its value in one day, equivalent to a loss of around £91 million.

GVC, the owner of Ladbrokes, lost 10.5% of its value, equating to almost £547 million. Meanwhile, William Hill announced a loss of £230 million and Paddy Power Betfair owner Flutter Entertainment recorded a £217.5 million loss due to the announcement.

Tighter Online Gambling Regulations

The call for tighter regulations regarding online gambling came in a report revealed by The Guardian last week which comes after a six-month inquiry which involved evidence sessions with gambling firms as well as with people suffering from gambling addictions.

In the report, the group of cross-party MPs described the UK Gambling Commission as “ill-suited” to regulating the online sector. The group of MPs, led by Labour’s Carolyn Harris and Conservative MP Duncan Smith, also called for the Gambling Act 2005 to be replaced with new, tighter laws.

Duncan Smith, Vice-Chair of the group, said in a statement: “It’s outrageous that there are no stake limits online, that gamblers are still able to gamble using credit cards online and that operators are able to continue to offer inducements to the vulnerable without proper sanction.”

In a statement responding to the report, a UK Gambling Commission spokesperson said the regulator was “disappointed” that they were unable to give evidence before the report was released. They stated: “The report does not reflect our considerable action and process on most of the areas of concern set out in the report and we look forward to being given the chance to outline that work to the APPG.”