Part 2: The UK market overview: at a crossroads
The introduction of a national self-exclusion regime for online operators will at least give the regulator some reassurance that operators are serious about what is at stake in that particular area.
It should be noted that the number of selfexclusions in the year to September 2016 reached more than 800,000, but without any greater clarity over the actual number of individuals involved, it is hard to make any judgement regarding what is happening in this area.
“ Any further tightening of know your customer, anti-money laundering and customer selfexclusion requirements could also provide a negative for the online gaming operators,” says Davies from Canaccord Genuity.
French at Cenkos also raises the spectre of the debate regarding staking limits on gaming machines in betting shops potentially migrating to the online arena.
“ Clearly the Commission is flexing its muscles in a number of areas, which is impacting a number of operators,” he says.“ Longer term there has to be concerns around higher tax rates and maximum stake limits for gaming.”
Given the current regulatory logjam, it might be argued that the market is now facing up to one of the conundrums of growth – the bigger the sector gets, the more it gets noticed and hence attracts the attentions of critics.
As Leyland from Regulus Partners points out, should the sector be hoping for further doubledigit year-on-year growth from this point, it can expect to be on the end of even more regulatory attention.
“ Given improvements in product and accessibility,( double-digit growth) is not impossible— but it is a tough ask in a challenging economic environment; such growth might also attract further negative regulatory attention if poorly handled,” he says.
The second half of 2016 will likely pose some interesting questions for the online sector. The new football season starting in August will once again be a hugely competitive environment and the major sports betting operators gear up for next year’ s football World Cup, which takes place in Russia.
By that point we will know the degree to which the terms and conditions of gambling companies have been forced to change or moderate and we may also be looking at a market where at the very least all TV advertising for gambling services has been banished to post-watershed timings or possibly been banned altogether.
Given the lag in the publication of the official Gambling Commission figures – and also the somewhat nascent nature of the reporting – we will have to rely on the limited reporting from both listed and private operators to give us a hint about how the market is performing going into next summer.
This will likely be a mixed bag given the variety of trajectories of the major players and the differing performances of the verticals within the larger full suite operators.
There would be great surprise if the market headed into reverse – the inflation rate of nearly 3 % should mean that some form of forward momentum is maintained regardless.
But within the headline figures, there will surely be some winners and losers in what remains the biggest and most profitable online gambling market in Europe.
iGaming Business Market Monitor • June 2017 8