LONDON – Since the start of the coronavirus pandemic, gambling businesses in Britain have increasingly looked to bolster and expand their online offerings, with shutdowns closing gambling shops.
The closure of commercial and social venues and the prolonged cancellation of major sporting events have fundamentally changed the gambling landscape around the world.
Despite its brick-and-mortar stores being largely closed in the past 12 months, Entain, the owner of Ladbrokes, which is on the FTSE 100 list, saw its core revenue rise 11% to £843.1 million ($1 USD) in 2020. 19 billion), of which £803.5 million came from a 50% increase in the online gambling offer.
Shares of the company hit a record high of £17.25 per share at the end of April and were up more than 36% since Monday’s close. It is currently up about 124% from its recent low during the first Covid-induced crash of March 2020. Companies like 888 Holdings, Rank Group and Gamesys have all performed strongly since last March. Meanwhile, Bet365 CEO Denise Coates posted an annual pay package of £469 million last year, one of the highest in UK corporate history.
But with isolation, boredom, stress, anxiety or financial worries increasing for many people during the pandemic, concerns have also been raised about a possible spike in addiction and harmful gambling.
The Gambling Commission, the UK’s regulatory body, found that while fewer people were gambling during the pandemic, many already engaged online gambling consumers expanded into new activities and spent more time and money betting.
The Commission noted that participation in a wider range of gambling activities may correlate with higher levels of “moderate risk and problematic gambling”, and has expressed particular concern about the increased adoption of online slot machines.
Dependence on the vulnerable
Matt Zarb-Cousin, co-founder of Gamban, a software provider that blocks access to gambling sites, told CNBC that with the canceled sports competitions and gambling companies tripling digital advertising since the UK’s first lockdown last March, many accidental better people were drawn to more intensive activities such as slots and casino games.
“Broadly speaking, the business model of getting people to sign up to bet on football or racing or sports in general is to run that at a very low margin – sometimes without any margin, sometimes even a loss leader – and so many of those to get people to the slot machines and casino games, where there is a significantly higher margin and these are more addictive products,” explains Zarb-Cousin.
He also noted that while gambling companies allow customers to exclude themselves from their services if they are concerned about the size of their gambling, in fact they rely on a very small fraction of the customers most at risk for a significant percentage of revenue.
A survey conducted last year by researchers at the University of Liverpool found that among UK gambling companies, the 5% of accounts with the highest annual spending, which Zarb-Cousin identified as the accounts most at risk of gambling damage, were 86%. of the GGY (gross gambling revenue) of companies.
Slots and casino games accounted for 93% of the GGY of online gambling among the operators who participated in the survey, while gambling products were also more often used by people from higher deprived areas. Players from the most deprived areas in the UK were responsible for disproportionately high spending in terms of GGY, the study found.
Meanwhile, most account holders made money or lost a modest amount during the year, with 84.5% of account holders spending less than £200 during the year. The survey found that for 1.4% of accounts, an average betting day contained more than 20 individual bets.
No nuisance, little regulation
The UK government is currently reviewing the Gambling Act 2005, the basis for all gambling regulations, to test its suitability for the digital age.
Gambling businesses in the UK have grown exponentially over the past decade as smartphones have enabled online gambling to become ubiquitous. Zarb-Cousin, who himself overcame an addiction to fixed-odds gambling terminals, said lax regulations had so far turned these companies into “huge monoliths” in the UK economy.
“That says quite a lot about our economy and our approach to regulation, and usually when you make huge profits you inevitably have more regulation or you have disruption,” he said.
“There has been no innovation or disruption in gambling at all and regulation has been pretty bad in every way.”
However, he suggested that stricter regulation is inevitable in the coming years as the government continues to scrutinize the sector.
Industry association the Betting and Gaming Council has emphasized that its members support 119,000 jobs in the UK and generate £4.5 billion in tax for the UK treasury and £7.7 billion for the UK economy in gross value added.
In addition to significant contributions to sports sponsorship, BGC members have also pledged £10 million to the Young People’s Gambling Harm Prevention Program and £100 million to treat gambling problems by 2024.
A spokesperson for the BGC told CNBC that the agency welcomes the revision of the Gambling Act and assures the government that it will be an “evidence-based process”, noting that the overall rate of problem gambling has been stable at 0 for 20 years. .5%, according to the latest government data.
“During the pandemic, the number of safer gambling messages on gambling websites has more than doubled, while the number of direct interventions where customers have spent more time and money than before Covid has risen by 25%,” the spokesperson said.
“We hope the Gambling Review strikes a balance between rightly protecting the vulnerable and not spoiling the fun of the millions of Brits enjoying a flutter in complete safety.”
Calling for help is ‘more difficult’
Anna Hemmings, CEO of the charity GamCare, which supports gambling addiction, told CNBC that after an initial outage at the start of the pandemic as people faced a range of other problems, the number of people calling for help is now steadily above the level is pandemic level.
“Importantly, the nature of the phone calls has become more difficult, so we’re seeing more mental health issues, more safety concerns, more domestic violence and so on,” she added.
Regardless of the Gambling Commission’s assessment, the Department of Health and Social Care has vowed to expand and improve treatment for gambling-related harm, bringing the issue into line with drug and alcohol addiction.
“There’s a serious problem with the amount of money being spent on research, education and treatment. It’s very, very low compared to drugs and alcohol and they’ve had massive budget cuts themselves in recent years,” Hemmings explained, pointing out that further investment in treatment programs was GamCare’s top priority as it awaits the results of the government’s assessment.
Along with Gamban and GamStop, a free self-exclusion program that allows gamblers to limit their online activities, GamCare has a partnership known as TalkBanStop, a program that combines counseling with practical tools to help at-risk groups in their recovery.
“People tend to let things get pretty bad before they seek help and a big part of our job is to encourage people to come forward sooner because the sooner you get help, the sooner you can minimize the damage” Hemmings said, noting that aid-seeking has declined across the board during the pandemic due to the backlogs of the NHS and an unwillingness to burden health services.
“We need to get the entire population back into that help-seeking mode that it’s legitimate and positive to seek help early.”