Thursday, December 8, 2022
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Andrew Rhodes: No ‘inexorable growth’ in UK gambling as costs soar

Land-based participation is still lower than pre-pandemic levels in the UK sector, although the year to March 2022 witnessed a three per cent increase, according to Andrew Rhodes, CEO of the UK Gambling Commission

Addressing the 2022 IAGR Conference in Melbourne yesterday in a speech that summarises the Commission’s recent series of enforcement actions, Rhodes also revealed there has been signs of recovery since the pandemic due to in-person gambling participation rate increasing to 26 per cent from 24 per cent in March of last year.

During the global pandemic, online participation witnessed a grand increase and, since the public health restrictions, it remained statistically stable at 26 per cent compared to March 2021 – but Rhodes expressed that it continues its long-term increase.

However, he expressed that, within the UK gambling market, the sector is “not seeing inexorable growth”, with overall gambling engagement stable and not growing as a whole. 

Explaining what this means, Rhodes noted: “What we think this means though, is that we will see a continuation of new and novel products entering the market as well as attempts to extend the participation of certain demographic groups.

“But in Great Britain we’re also seeing two other big drivers on operator and consumer behaviour starting to impact on the market.

“The first is the cost of living. No doubt there are similar stories to varying degrees in many of your jurisdictions, but increases in the cost of living appear to be leading to operators starting to make changes to their staffing and operations – even before we see much evidence of it affecting consumer gambling spend.

“The other are the changes operators are making to apply safer gambling measures.”

On the aforementioned enforcement actions – which has seen penalties against the likes of Betfred, Beway and, most notably, Entain – Rhodes observed, from the previous fiscal year, that the UKGC handed out financial penalties against three companies during the course of 2016/17.

In contrast, during the past 10 months, the regulator has charged 16 operators a total of £45m (2016/17: £1.7m). 

“At this volume, we think the message is starting to get through,” he said. “And we refuse to accept the pace of the slowest when we are confronted by recent stories of people suffering as a result of preventable harm.”

Commenting further on legal and legislative areas, Rhodes advised the Australian audience that balancing player protection with freedom of choice ‘is an issue for each jurisdiction to look at themselves’.

The CEO stated that this is an area that the much-delayed Gambling Act review – the publication of which is now uncertain due to political instability at Westminster – aims to address. 

Commenting further on the review, Rhodes added that the white paper’s release “may lead to further impacts on the gambling sector and potentially a further round of mergers and acquisitions”.

Another area for discussion at the conference was the new ‘black market’ that has reportedly been highlighted as being of interest to the UKGC over the past year  – that of emerging products’ which Rhodes was keen to stress did not refer to the black market of licensed gambling. 

Instead, the UKGC chief referred to NFTs, ‘synthetic shares’ and cryptocurrencies, gaming industry interest of which has been on the rise of late – Entain’s Ennovate platform outlined probing NFTs as an objective, for example. 

“They are becoming increasingly widespread and the boundaries between products which can be defined and regulated as gambling are becoming increasingly blurred,” Rhodes commented on the range of emerging products.

“We are likely to see more and more integration of these types of products into sport and other areas of lifestyle, as well as the legitimate gambling industry. These are lucrative growth areas, and we ignore them at our peril.”

Concluding, Rhodes stated that the UKGC is planning a trial ‘in the coming months’ to test the development of a single customer view, which he argued has the potential “to be a significant step change in improving the safety of gambling”.

Lastly, he also expressed optimism that greater sharing of data and intelligence, the adoption of common approaches and better international coordination can lead to “globalised progress across a globalised marketplace”.

He concluded: “Gambling will always be a fast changing and innovative sector. It will also always be an industry that attracts strong and wildly different views.

“But wherever our jurisdictions are on the scale, as gambling regulators we all want the same thing – compliance.

“If we can crack ways to better work together – sharing data and intelligence, adopting common approaches and coordinating actions where possible – we can achieve globalised progress across a globalised marketplace.

“Let’s raise our ambition, let’s work together and let’s make gambling fairer, safer and more crime free.”

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