London, England - The top 5 players in the UK sports betting industry have made a combined effort to pledge £100 million to the British government. This is a tacit attempt to stave off planned tighter controls, which they fear could shackle future growth and suffocate innovation in the industry.
Just recently, the UK Gambling Commission (UKGC) has taken an interest in eSports betting, particularly after controversy broke over sites like CS:GO Lotto. They even published a discussion paper detailing their concerns regarding eSports betting, and one of the concerns discussed was whether there was a need to tighten its legal status or not.
There are already comprehensive laws in the UK that govern how gambling works. These laws also cover competitions as well as lottery-style contests. However, it has recently come to the attention of the UKGC that eSports gambling has escaped regulation for the most part, perhaps largely because this type of gambling has just recently emerged. This is particularly true of the practice of betting with game items like skins and virtual currencies.
There have also been reports that gambling operators have failed to safeguard players from problem gambling and gambling addiction. These reports have led to a call for a mandatory betting levy, which will be used to fund research and programs geared towards addressing problem gambling and gambling addiction. This has put a lot of pressure on the industry’s major players, and they have decided to make the first move.
The Department of Culture Media and Sport received a letter signed by top management at Bet365, Ladbrokes Coral (GVC), Paddy Power Betfair, Skybet, and William Hill this week. In the letter, the five betting operators pledged to increase their current voluntary levy from 0.1% of gross revenue to 1% over the next five years. This would mean the levy will go from £10 million to £100 million.
Part of the letter says: “We are committing to collaborate to address gambling-related harm with the priority of protecting the young and vulnerable.” Prior to this development, the industry has already committed to applying a self-imposed ban on advertising gambling activities during any televised sports event. This ban is expected to start being enforced later this year.
It certainly looks like industry players are desperate to improve the industry’s image and prevent another round of regulatory backlash similar to the one that led to a significant reduction on maximum stakes allowed for fixed-odds betting terminals (FOBTs). An industry insider told the BBC that the industry is currently “on a precipice.”
“If we don’t get ahead of this, we will end up where the alcohol industry was 10 years ago and tobacco 30 years ago,” the insider said. “The fear is that we face a ban on touchline advertising or football shirt sponsorship.”
Despite this statement, however, the real concern isn’t really touchline advertising or football shirt sponsorship. Rather, it is the possibility of restrictions being placed on online advertising, where about 80% of the industry’s marketing efforts are currently being spent. A ban on online advertising would definitely be a huge blow from which the industry might not easily recover.