A new year is with us but will it be a good year for the gambling industry? Companies are waiting for news of what the UK Government has in their White Paper that looks at reforming the current gambling laws. Meanwhile, results for the final quarter of 2022 haven’t been looking too promising.
The final three months of 2022 had one major boost for UK gambling companies. For the first time ever we had a Winter World Cup. That was expected to be a major boost for gaming operators as it’s an event that gamblers love to bet on, especially with Wales taking part.
However, 888 Holdings who are a leading gambling company around the world have reported a drop in revenue for the final quarter of 2022. They saw a rise in revenue from the retail section of their business. However, online there was a fall in earnings in the last three months of 2022. This followed disappointing results in the previous quarter.
That third quarter had seen a 7% drop in revenue compared to the previous year. Why was the revenue figure down to £484 million? One reason was there being some instability after their purchase of the non-US assets of William Hill.
Another though is a worry over strict UK online player safety measures. The company was fined £9.4 million last year by the UK Gambling Commission (UKGC) for social responsibility and anti-money laundering failings.
The final quarter saw revenue to December 31 drop to £458 million (2.6% down from 2021) despite the World Cup being held. Over the whole of 2022, revenue fell 3% compared to the previous year. The final total recorded was $1.85 billion, the year before it had been £1.91 billion. Online profits were down 5%, while retail revenue increased by the same percentage.
Again when discussing the results, 888 put part of the blame on the stricter online UK regulations. Results in other regulated countries have fared well and further expansion in the US is planned.
The Q4 results saw the 888 share price fall and although the company hasn’t got financial problems, reporting a fall in revenue when the world’s largest football tournament was played is concerning. The cost of living crisis in the UK is another major problem with less money available for betting purposes.
If 888 and other gambling companies familiar to UK gamblers are worried about increased regulation, more bad news is likely to be on its way. This could lead to customers making unsafe move to playing at unlicensed sites.
It’s widely accepted that the current legislation regarding gambling in the UK is outdated. That has to be the case considering the way gambling has changed since that legislation was passed. The arrival of the internet and being able to gamble on mobile devices and tablets has changed the way in which we gamble.
The same can be said for the number of betting opportunities that are now available to punters. There are hundreds of markets available for major football events, 24/7 coverage of sporting events and the ability to bet on matches as they take place.
All the chaos that took place in Downing Street last year has delayed the publication of the White Paper on gambling reform. We got so close to it being published as the White Paper was delivered to Downing Street for a final review. Then came the resignation of Boris Johnson, the Tory Party leader election, yet more chaos with Liz Truss (remember her?) and the appointment of Rishi Sunak as Prime Minister.
That’s caused delay after delay but we have had some clues as to what the White Paper will deliver. If 888 are worried about stricter regulation of online gambling, then they have to be worried about the problems future legislation will bring.
There are concerns about the amounts that some gamblers are betting at UK online gambling sites. Can gamblers afford to make those bets? Stricter affordability checks seem to be an inevitable part of the White Paper.
Also likely is the imposing of lower maximum stakes on slot games. The government has already taken action against the gambling machines in High Street bookmakers. Reducing the maximum stake for those has hit the finances of betting companies. Doing the same online would have a similar result.
Further restrictions on how gambling companies can advertise their products are also expected in the future. Other possible targets are the welcome offers and VIP programs that are seen at online gambling sites. The days of offering free bets may come to an end as these types of offers are used to entice gamblers to join the site.
2023 is going to be a worrying year for the UK gambling industry. The White Paper will eventually be published and the UKGC will continue to become ever stricter on those betting companies they’ve licensed.
