{"id":8433,"date":"2022-06-16T04:26:52","date_gmt":"2022-06-16T11:26:52","guid":{"rendered":"https:\/\/wagers.com\/staging\/4285\/?p=8433"},"modified":"2023-01-25T11:36:27","modified_gmt":"2023-01-25T19:36:27","slug":"uk-reforms-could-have-far-reaching-impact-on-us-operators","status":"publish","type":"post","link":"https:\/\/wagers.com\/staging\/4285\/news\/uk-reforms-could-have-far-reaching-impact-on-us-operators\/","title":{"rendered":"UK reforms could have far-reaching impact on US operators"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The ongoing wait for the UK government\u2019s White Paper on gambling reform has been one of the longest running industry sagas of the past few years.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to numerous media reports, it is finally due to be released at the end of this month and is likely to propose major regulatory reforms around:\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> a potential \u00a32 stake limit on online slots, <\/span><\/li>\n<li><span style=\"font-weight: 400;\">affordability checks, <\/span><\/li>\n<li><span style=\"font-weight: 400;\">new advertising and marketing restrictions, and <\/span><\/li>\n<li><span style=\"font-weight: 400;\">the implementation of a single customer view, which would enable UK operators to view customers\u2019 gambling activities across all their accounts.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If brought into law, these changes could have major impacts on UK gambling companies, but also on their U.S. activities. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whether they are operators, suppliers or affiliates, many of them operate in both markets and the hit such regulations could cause to their revenues could be noteworthy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Groups such as Bally\u2019s Corporation, FanDuel, bet365 or 888 on the operator side, affiliates such as Gambling.com or Catena Media or suppliers such as Open Bet (part of Endeavor Holdings) or Genius Sports; all have activities in the UK and are active in the U.S., even if their market shares and scope vary considerably.\u00a0\u00a0<\/span><\/p>\n<h3>UK<strong> figures detail<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\"> Recent first quarter figures published illustrate how changing UK regulations could impact some of those companies\u2019 U.S. plans.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bally Corporation\u2019s first quarter results published in early May revealed that group revenue was up 35% to $548.3m, but also showed that international digital revenues represented nearly 50% of that total at $253m\/\u00a3188.5m (at currency rates at the time). <\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">The UK makes up more than half those ex-US online revenues at \u00a3108m.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">During the call, Bally CEO Lee Fenton sounded confident the UK gambling review would not result in dramatic reforms and with regard to affordability checks. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">He said: \u201cWe don\u2019t want to be requesting (authentication) documents from players at relatively modest levels of spend and we think the message is getting through. It\u2019s also part of Tory MPs (Conservative members of parliament) pushing back against the \u2018nanny state\u2019, which is a key issue for them.\u201d\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">888 meanwhile managed <a href=\"https:\/\/wagersearningsmore.substack.com\/p\/apr-7-888-knocks-250m-off-william?s=w\" target=\"_blank\" rel=\"noopener\">to reduce its purchase price for William Hill\u2019s non-US activities<\/a> from Caesars Entertainment by \u00a3250m because of the macroeconomic issues impacting the world economy and the UK\u2019s looming regulatory overhaul.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the affiliate side of the industry, Gambling.com CEO Charles Gillespie sounded somewhat blas\u00e9 about discussing the topic during his company\u2019s recent call with analysts.\u00a0\u00a0<\/span><\/p>\n<blockquote><p><em><span style=\"font-weight: 400;\">Gillespie said the regulatory reforms had been \u201cwatered down, but <\/span><span style=\"font-weight: 400;\">we weren\u2019t particularly concerned by it and hopefully they (the UK government) release something and people will stop asking questions about it. The latest noises suggest we can be relaxed about it.\u201d\u00a0\u00a0<\/span><\/em><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">His comments would indicate that new regulations are \u2018baked in\u2019 by many stakeholders and from the tenor of those comments implies that impacts on revenues will be minimal, or at least manageable. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other side of the argument, Peter Jackson, CEO of FanDuel\u2019s parent company Flutter Entertainment, was much more downbeat about prospects in the UK.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The group\u2019s first quarter trading update published in early May revealed that UK &amp; Ireland revenue was down 8% to \u00a3519m. Online revenue from the UK and Ireland was down 20% due to the ongoing introduction of safer gambling measures, lower hold and a return to more normal post-Covid working conditions had cost the group around \u00a330m. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Jackson added that he hoped to \u201csee some clarity on the outlook for regulatory change\u201d once the government\u2019s white paper came out.<\/span><\/p>\n<h3>No hard forecasts<\/h3>\n<p><span style=\"font-weight: 400;\">There are no hard forecasts on the potential impact new regulations such as a \u00a32 stake limit on online slots might have on UK operators, but when the government introduced a \u00a32 stake limit on the fixed odds betting terminals (FOBTs) in April 20219, all the companies with major retail networks closed many of their high street outlets.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Six months after the introduction of the FOBT stake limit, around 1,100 shops had closed. William Hill closed 700 shops, for Ladbrokes Coral owner GVC (as it was then known), it was 900 closures and Ladbrokes Coral\u2019s net gaming revenue from the machines dropped 36% subsequently, while Betfred closed between 400 and 500 of its shops.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the UK these topics are tied to highly sensitive issues linked to responsible gambling, operators\u2019 social responsibilities, gambling harm and its tragic impact on some vulnerable people. In the public domain the combined effect of these factors has led to a debate that has become dominated by claim and counterclaim from anti- and pro-gambling lobbies, leaving little room for dialogue. The market as it stands should act as a cautionary tale to U.S. stakeholders.\u00a0<\/span><\/p>\n<h3>Far-reaching impact<\/h3>\n<p><span style=\"font-weight: 400;\">There is no doubt more restrictive regulations will impact UK operators as a result of the reform proposals that are set to be published shortly, but their impact is seemingly underplayed by many in the industry.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">My colleague <\/span><a href=\"https:\/\/wagersearningsmore.substack.com\/p\/jun-10-weekend-edition-50?s=w\"><span style=\"font-weight: 400;\">Scott Longley wrote recently<\/span><\/a><span style=\"font-weight: 400;\"> that reforms such as<\/span><span style=\"font-weight: 400;\"> \u201ca possible \u00a32 stake limit on slots, affordability measures and advertising bans would have been viewed as an apocalyptic triple-whammy\u201d not long ago.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cNow it\u2019s an aside in a note which foregrounds regional gaming deliberations. The UK may not be central to Bally but the effects of whatever measures are (finally) introduced will be far-reaching.\u201d\u00a0<\/span><\/p>\n<p>He was referring to <span style=\"font-weight: 400;\">Bally Corp in this case, but clearly the logic applies to all UK companies with U.S. operations.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The ongoing wait for the UK government\u2019s White Paper on gambling reform has been one of the longest running industry sagas of the past few years.\u00a0 According to numerous media reports, it is finally due to be released at the end of this month and is likely to propose major regulatory reforms around:\u00a0 a potential [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[324],"tags":[1240,939,591,640,1237,1238,1239],"class_list":["post-8433","post","type-post","status-publish","format-standard","hentry","category-news","tag-bally-corporation","tag-betmgm","tag-entain","tag-fanduel","tag-flutter-entertainment","tag-gvc","tag-ladbrokes"],"_links":{"self":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/8433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/comments?post=8433"}],"version-history":[{"count":8,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/8433\/revisions"}],"predecessor-version":[{"id":8444,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/8433\/revisions\/8444"}],"wp:attachment":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/media?parent=8433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/categories?post=8433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/tags?post=8433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}