Government expects online gambling industry to lose up to £895 million on white paper reforms
Paddy Power owner Flutter expects to lose up to £100 million per year
addy Power and Sky Bet owner Flutter said the gambling reforms proposed in a Government white paper today will cost it up to £100 million a year, while the Government said it expects measures to cost up to £812 million for the online gambling industry as a whole.
In its review of the costs of the reforms, the Department for Culture, Media and Sport said that new affordability checks are set to cost between £380 million and £710 million, while stake limits for online slots could cost between £125 million and £185 million, for a total hit to the online industry of between £515 million and £895 million.
Betting giant Flutter said it had already taken steps that were similar to many of the proposals, such as a £10 cap on stakes for online slot machines - where the Government is proposing a cap somewhere between £2 and £15 - and performing checks on higher-spending punters.
Those changes, it said, cost it around £150 million in revenue annually.
However, it said the measures announced today were set to cost it between £50 million and £100 million more, bringing the total impact to between £200 million and £250 million.
With many of the proposals - including the slot stake cap - set to be put out for consultation, Flutter CEO Peter Jackson said his firm would work with the Government to try to shape the final version that becomes law.
“We will constructively engage with the Government and Gambling Commission as part of the subsequent industry consultation process, with a focus on providing support to the minority at risk of gambling harm without interfering disproportionately with the enjoyment of the vast majority,” he said.
“We encourage the regulator to look at what more it can do to tackle the problem of the growing number of unlicensed and unregulated gambling companies targeting at-risk gamblers across the country.
“It is important to get new regulation right from the start, as it will ultimately provide the certainty our industry needs to continue investing in jobs and in further growing the UK’s lead in digital innovation in our rapidly evolving market.”
The firm also announced that former Kellog’s boss John Bryant would be its next chair today, while its shareholders are set to vote on whether to pursue a dual-listing of its stock in London and New York. The measure is widely expected to be approved, and Flutter have said it could be a step towards making the US the primary home of its shares.
Ladbrokes owner Entain, meanwhile, expects a smaller impact of less than online 1% of its online revenues, which would be roughly £30 million. While its share of the UK market is smaller than Flutter’s, this would still be less of an impact in relative terms.
“The UK Gambling Act Review is an important step towards having a robust regulatory framework that is fit for the digital age and creates a level playing field for all operators. We welcome the clarity that it will bring to the industry and its customers,” CEO Jette Nygaard-Andersen said. “We look forward to working with the Government and the Gambling Commission on evidenced-based consultations and implementation of the proposals outlined today.
“As a global and diversified business that operates in over 40 regulated or regulating territories around the world, all of which are regulated or regulating, we are firmly in favour of regulation that preserves the market for the vast majority of customers who enjoy recreational betting and gaming, whilst also ensuring appropriate protection to all players.”