Ep 215: Part two of a Very British Affair
For a second consecutive week, there have been developments concerning UK Gambling's regulatory future. Last Monday, parliament hosted its long anticipated debates on affordability checks, showcasing a raft of distinct opinions on the gambling review's most divisive matter. As attention now turns to the gambling commission's imminent 2 tier pilot scheme for financial risk checks, the debate revealed genuine worries from the UK racing industry about the future of a heritage sport that is so reliant on betting for its survival. The week also saw the Gambling Commission deliver the first datasets of its new survey methodologies measuring gambling prevalence in the UK. And to round off the week, and indeed February, the betting and gaming council staged its annual general meeting, which provided the perspective of key political actors on delivering change to future proof gambling, during which UK gambling stakeholders were warned of their wider duties beyond affordability checks.
Martyn Elliott:I'm Martin Elliott, and welcome to today's edition of Igaming Daily brought to you in partnership with Optimove, the number one CRM marketing solution for the Igaming market. 56% of the EGR Power 50 personalized player experiences with Optimove and as a special offer, Optimove is offering new clients a free first month when they buy Optimove. For more information and to claim the free month, go to optomove.comforward/sbc. Joining me today to discuss another busy week in, UK gambling is SBC's content director, Ted Menmure. Hi, Ted.
Martyn Elliott:How are you?
Ted Menmuir:Very well, Martin. Good to have another rift on, UK gambling's regulatory feature. Yeah. Let's but let's hope there's there's no part 3, please. Yeah.
Ted Menmuir:Yeah. If you don't wanna be Would you like a, every week? Yeah.
Martyn Elliott:Would you like a slightly quieter working week?
Ted Menmuir:Oh, yes. Oh, yes. Yeah. Yeah.
Martyn Elliott:So, right. Where shall we start? How about, that, Westminster Hall debate last Monday, which seemed quite lively? And, frankly, I got I got the impression reading through the the minutes of it. It was like a quantum leap episode from the Cameron Osborne years with, Chris Grayling, IDS, Stephen Crabb, Adam Ophrey, Matt Hancock, all pitching in.
Martyn Elliott:It was like, Yes. Like politics before Brexit. It was,
Ted Menmuir:I know. I know. And it was kind of a flashback to to that era. And,
Martyn Elliott:quite quite
Ted Menmuir:a stellar cast of MPs turning out for the debate, which which which is a good thing. And I think, you know, it it does it it does carry kind of a status that that needs to be debated.
Martyn Elliott:Yeah. I mean, is it, really interesting. Some you know, as you say, there were big hitters there. And, there was some genuine debate going on. There's a lot goes on in Westminster that is just for show, but there were some, pretty strong disagreements going on.
Martyn Elliott:There were some Mhmm. From, you know, they range from let's not have affordability jacks at the one end to, you know, an accusation that, the gambling industry was trying to use this the the future of racing to, leverage out the the affordability checks, you know, because it suited them. So, and then, you know, a number of a number of opinions sort of midway between as well. It was really interesting stuff, I thought.
Ted Menmuir:Yeah. I mean, from reading the minutes and actually observing the the video of the debate, I mean, what comes through is that none of the camps are really kind of moving on the matter. But the reality is that on affordability checks is that they're here to stay and that it will come down to to the UKGC's pilot program. And I think I mean, you know, writing last week, I think that we have reached a key pillar or a key platform that is gonna kinda oversee the future of UK gambling. And there's a lot riding on these on these tests, on this pilot program, because I just don't think it's it's about affordability checks in itself.
Ted Menmuir:I also think that it's it's the kind of foundation of where they will base all the kind of regulatory elements of of the the proceeding consultations. So this is, it's big for the UK Government Commission, but it's big for all the parties involved.
Martyn Elliott:Yeah. I think it's going to be fascinating to to see whether these affordability were checks work in practice. You know, in theory, it's been quite well thought out. There's a lot of a lot of preparation gone into this, But I still think there are some some practical issues that they've got to sort out. And I do fear that racing could be a bit of a casualty on this, because racing depends, depends almost entirely on the gambling industry for its for its income and its survival, because most of its sponsorship comes from there, and then there's the the levy that helps to fund it as well.
Martyn Elliott:And, traditionally, you know, the big the big bets, the big action in betting, in the UK has been on racing. So, you know, they're they're gonna have a a greater number of people, who are horse racing betters will be affect or greater proportion of horse racing betters will be affected by these, I think, than, say football betters or tennis betters. So, you know, there is there is definitely a big risk for the racing industry if these don't work as smoothly as the gambling commission hope they they do.
Ted Menmuir:Yeah. I mean, this this is one of the things about the debate and that it did come through that there is a genuine concern for racing. But it's also, overthinking here is how do you kind of govern racing and govern kind of its its its interplay and relationship with UK gambling? And can it can it get to a better place? Or can it kinda kinda it rely less on on on betting?
Ted Menmuir:And, again, also, the importance of UK racing to rural constituencies. Yeah. So you saw so many MPs like Matt Hancock come out. You know, they all kind of came out with these lines of like representing their racetracks, representing their local stables that it isn't just a case that British racing is is a sport, but it's also that it has kind of a rural connection. It has values that that are for the heritage of the UK.
Ted Menmuir:It's got a cultural aspect to it. And they really don't wanna lose that. And it would be harmful to to to the UK on the whole and the detriment if racing takes takes an impact. And, again, this is where it comes down to how well can these affordability checks be implemented and how how intrusive they will be?
Martyn Elliott:Yeah. I think so. I mean, the the other the other big thing to know, the UK the racing industry is not just about tradition. It's not just about a a great day out, and, know, going to the races is a great day out. One of the best things you can do in in in my view, anyway.
Martyn Elliott:It's a huge employer in rural economies where, you know, farming jobs don't pay that well. And so on these days, the hunts of to all intents and purposes gone. So a lot of jobs and, you know, some of the better paid jobs, although maybe stable lads will tell you differently, you know, really depend on on this being done well and this working for the industry. Otherwise, you know, they need a a big a big rethink about how they're going to, bring in the prize money and the sponsorship and so on that that that they need. So
Ted Menmuir:But there is a regret here for for everyone involved is that we're now in year 4. And I think that this has been or last week was the deepest debate we've had on regulating UK gambling, but also its cause and effect on on stakeholders, and one of them being UK racing. And I think a lot of people will be thinking like this might be, just too late down the field to kind of change the course or get a better consensus on what should be done to regulate the the industry without harming other, other stakeholders involved.
Martyn Elliott:Yeah. I think so. I think we should perhaps reflect when all this has, has gone through and so on and on. And I think I'm trying to think who it was. Is he called Danny Kruger?
Martyn Elliott:The guy who is, I think he's Prue Leith's son, isn't he? Who's a conservative MP. And he he raised the, the view in the debate that, you know, the people who are and the stakeholders who are most affected by decisions in policy aren't aren't really part of the process in forming that policy. So I think we we we should reflect after this. Why has it taken, the racing industry to come in and force this debate?
Martyn Elliott:And, like, as you say, it's in year 4 we're having it. You know, why was this not happening closer to the start when it became I think if you'd said at at the start of this regulatory process, what what are the absolute nailed on things that will come on come in as a result of the review? You just had, you know, state limits on slots were pretty much guaranteed, and affordability checks were pretty much guaranteed as well. So it's a it's a fair question for for everyone to ask and for stakeholders to ask, particularly racing that's so so badly or is likely to be badly affected by it. Why haven't we had this discussion earlier?
Martyn Elliott:And, you know, why were they not I know we've had a lot of consultations and so on, but Yeah. Have they have they been consulted enough, I guess?
Ted Menmuir:Yeah. And I'm seeing you said something very important that you have to kind of separate the consultations from an actual debate. So consultation is a part of a process of how they review the proposals that they will integrate into UK gambling. But one of the things that I kind of picked up on is that MPs such as Hancock and Matt Hancock and and Davis, they, you know, they made a clear statement that, yes, these are measures that are meant to kind of protect the players, but they're 2 very different things, state limits and affordability checks. And I think even with, with Philip Davis, what he was saying was that affordability as proposed is intrusive, and it's just not gonna work with what the government commission is proposing.
Martyn Elliott:Yeah. Yeah. I, I think he's got a point there as well. I I I do have some some doubts about whether it'll work in it's a well intentioned measure. There's no getting away from that.
Martyn Elliott:You know, the intention is right. They've listened the people who've put this together have listened to what was said in the consultation. I just wonder if it if it's just an issue to which there is no frictionless solution. There's no there's there's no solution that won't be intrusive and won't be damaging to to some of the stakeholders.
Ted Menmuir:I'm gonna kind of fast track to the AGM and something that, Bridgette Timmons said and the worry there that, if you implement bad practices, it it isn't that, you know, it's just bad for the consumer. It's just the the impact the wider impact is that you start to get a deficient market where kind of the threats and risks seem to get kind of momentum, and your consumer is more exposed to black market. So case in point, we've seen this in Germany where, yes, the cracks start, but then 2 years down the line, your exposure goes up to 20, 30%. And, again, this this is this this is an aspect that didn't get debated. I mean, what happens?
Ted Menmuir:How do you deal with deficiencies in the market post regulation? And did we, as an industry, put that forward to to the gambling commission? I mean, we yet to see the the consultation's responses, but that's one area that I I I would wanna check on.
Martyn Elliott:Sure. Sure. That that will be, interesting to look at. Interesting to look at. So just before we get into the the break, perhaps we can just move on very slightly and have a look at the, the first round of, the gambling prevalence survey under the new methodology.
Martyn Elliott:Some interesting interesting data in that, do you think, Ted?
Ted Menmuir:I think, the the first data set is be has been on gambling providence, And it's very it was very much the EkoGC telling us, look. We're gonna apply a new model. Now I think the dataset will be expanded as it touches upon the kind of the bigger threats, the bigger risks of UK gambling. But I think for now, the kind of focus of 1st datasets on UK gambling prevalence. And, actually, there there's not much to kind of take away, take away from there that has been previously reported on UK gambling participation amongst adults.
Martyn Elliott:Yeah. Yeah. I mean, one thing which struck me a little bit was, that retail is or, you know, in person gambling is so strong. You know, we're often, you know, I I probably don't read the data and so on as much as I I should do on this, and I rely on newspaper reports and so on. And you'd, you'd be forgiven for thinking there's, some kind of pandemic of online gambling, but actually these figures tell a different story to that.
Martyn Elliott:What I was most taken about, was the question, reasons for gambling, which, some of it was, you know, 86% of people said they did it to win big money. So I suggest I would suggest 85 and a half percent of people are quite disappointed when they're with their gambling. But there were a couple of other slightly bizarre things in this. 19% of people said they gambled for the mental challenge, and 44, yeah, and 44% said they gambled because it gave them a sense of achievement. So, there you go.
Martyn Elliott:If you're look if you're looking for an excuse in future for, for putting a bet on to it, it's the mental challenge and the sense of achievement you get from it. Oh, well. Yeah. So anyway, let's, let's just go into the break and a message from our sponsor. And when we come back, we will, talk about the, Betting and Gaming Council's annual general meeting.
Martyn Elliott:Okay? Welcome back to, part 2 of the iGaming Daily. And, Ted, I was struck by something you you wrote last week, which, normally what I'm recommending is something that one of the SBC team has written, on this podcast. I can do it without worrying about sounding too sick of antics. It's somebody who's not on with me, but actually, while you're here today, I thought your report from the, from the, be betting and gaming council's annual general meeting was fascinating.
Martyn Elliott:There were some, some really interesting, nuggets in there. Who so for people who have made the mistake of not reading your report on it, Ted, who who was there? Who was taking part in this meeting?
Ted Menmuir:Okay. Well well, thank you. Yeah. Look. I mean, the the Birmingham Game Council had their annual general meeting, and, the the attendance was all the key political actors.
Ted Menmuir:So, yeah, you had, still Andrew, DCMS under secretary, but at the same time, you had the, the shadow minister, for for labor.
Martyn Elliott:I have to say, I hadn't actually, this this probably says more about me than, her activity, but I've not heard of Stephanie Peacock before. Stephanie Peacock.
Ted Menmuir:Thank you.
Martyn Elliott:Yeah. First time she'd, she'd crossed my radar.
Ted Menmuir:And, also, it was well, the the budding and gaming council, they're going through a transition too. So it was Michael Dugas last statement as CEO as he transfers over to chairman and Bridget Simmons, who's the inaugural chair of the the BGC's is leaving the industry. So it was good to kinda get their perspectives too about what they feel the trade body's doing, about their their long their short term and long term output. And, also, from Brigitte Brigitte Simmons' standpoint of how the debate changed in the prior to the BGC, had been formed, and also where she kinda sees the the debate heading towards.
Martyn Elliott:Yeah. I thought I thought she had a, a really interesting point about, operators in the industry almost being the potential for them to be frozen out of, decisions by how the the levy, the incoming levy is spent on, research education and treatment. You know, I think it will be a real shame if the expertise from the industry is is not part of that process. Yeah.
Ted Menmuir:But, I mean, going back to the to the AGM, I mean, it was another good event with a good basis and and grounding of how conflicting it is to to regulate this industry and what is at stake, Who you know, what we're trying to protect. Who are the the stakeholders? And, again, you know, you just you you left there thinking, well, guys, this is 4 years down the line. And, you you know, you you you had Andrew Rhodes' statements, and and he's he he he was, you know, he he he underscored that. Look.
Ted Menmuir:Throughout his he's reached the 3rd year of his his tenure as CEO, and at no point if you look back since the UKGC was established in 2,005, there's never been kind of any detriment to growth. And you asked the kind of prominent questions like, what do you guys expect from a regulator and where do we kind of stand against you guys not being able to kind of achieve what what your business would want to do in within kind of the the regulatory remit remit of gambling.
Martyn Elliott:Yep. Yeah. I think he, looking through, your report on this, you raised some interest in, some pertinent points, really, about how things like return to player has dropped across a number of products, but profits have still going carried on going up. So what does that mean? You know, what what what can the industry really expect the regulator to do, or, what do they expect a regulatory regime to give them, which is an an interesting point.
Martyn Elliott:And another another thing I thought he, which I thought was interesting, was when he talked about moving the commission's focus onto what they what he described as, tier 2, 3, and 4 operators. And, really have a look at their operations and, you know, the compliance or otherwise, in those businesses. That's a bit of a change because we we see a lot of headlines if a tier one operator is hit with a a penalty. But, we don't hear quite so much about the the smaller players in the market.
Ted Menmuir:Mhmm. But but then another thing that Andrew Rhodes and the UK as you see on the line is that they do want a depth of market and a depth of choice in in how UK gaming is structured because they view that that is essential kind of provision against the black market. That if you're a consumer, you've got quite a vast number of operators that you can choose from, that they have some innovations to put forward to you. And that, you know, your offer isn't just here's a bonus, sign up, and you can play on on on 7 regulated sites as we've seen in other European markets.
Martyn Elliott:Sure. Sure. I mean, that's, I think there's some sense to that approach, isn't there? Mhmm. Mhmm.
Martyn Elliott:Although a lot every time you you tighten regulation, it does benefit the bigger players, I think. It does become more difficult for those without the the funds and the infrastructure to employ more compliance staff and so on to to fit in with it.
Ted Menmuir:Well, I'd I'd actually there's actually been, there's actually a thinking here, and then I was speaking to to a number of attendees at the, the AGM. And they said, look. Actually, if you are a, you know, operationally effective, small size to mids to to midsize online gambling operator, especially strong on the casino element where, you know, yes, you you might say the bigger guys have resources. Right? But they're not exactly getting it right.
Ted Menmuir:I mean, they're still spending multimillions, you know, and expenses year on year. And a lot of, you know, a lot of people were saying that if you are an effective small sized operator, UK focused, and you are good on the compliance end, and you are good on onboarding players, and and you have you're very effective at the operational procedures needed to be compliant, you're gonna get acquired, and you're gonna get acquired quite quite a big multiple. So it isn't like it you know, this compliance is gonna kill the market. I think now it's about the kind of the adaptability of the operators, right, in who's kind of standing, in the next 3 years.
Martyn Elliott:Yeah. I'd guess that, if you use that sort of thinking as well, it still, opens up the the the floor for the what you might call it, a specialist operator. Somebody who can carve out a genuine niche. Wouldn't that be Taking on the high rollers or, you know, specialising in American sports or just being a a pure pure play live casino or or whatever it might be, the market will will provide an opportunity if you do it well, I I guess, is the the outcome of that thinking, which is great great news for for players. Because, you know, while the tier the tier one operators do a really good job for a a recreational punter, someone like me, who just wants to stick a few quid on the football and, you know, the occasional big race or whatever.
Martyn Elliott:If you are a bit of a more considered player, you know, you have a particular specialism in mind, the the tier ones don't always really meet those needs, looking at purely from a player's point of view.
Ted Menmuir:Yeah.
Martyn Elliott:Yeah. Okay. One other thing that interested me was, the aforementioned, Stephanie Peacock, turning up at the meeting. Did she let did she give any hints as to what Labour's thinking about this might be? Because, you know, there's an opinion poll out today, which if you put it into the UK polling report model, says that Labour are going to get 454 seats on the next election.
Martyn Elliott:Yeah. So let let's say that they have a good chance of forming the government. So what they think on this is quite important.
Ted Menmuir:So, yes, look, Go to the BGC to get the, the shadow ministers' views. Yep. And, as as Stephanie Peacock said, look, there is kind of consensus across political ranks on that gamut needs reforms. One thing that she on the line is that any reform that Labour do on a high risk sector is pulled back against the UK consumer living through a period of high inflation and a cost of living crisis. And they mentioned she mentioned that twice in the speech that, look, you guys are gonna get regulated, but our thinking is always about, is it fair on what the consumer is is is going through and what the consumer is living?
Ted Menmuir:And, you know, talking about a fair market, she did she did raise the point that she, Labour believes it's unfair that the National Lottery has been left out has been left out of, safer gambling duties and that they were that they need to be involved.
Martyn Elliott:Yeah. I thought that I thought that was interesting because that's been been missing from this conversation for, for quite some time, really, isn't it? And I I know that a number of people I speak to in the, operators are quite annoyed about that the National Lottery can get away with things that, you know, apply huge costs to them. And, you know, people really hate their people in the industry, a lot of them hate those adverts, the lottery, where where they can say, come on. You can change your life if you gamble with us.
Martyn Elliott:And, obviously, everyone else is, highly regulated, what they can and can't say in their adverts. But, I the, you know, the safer gambling provisions is a more important point than that, I guess. But, you know, I thought some are positive, quite encouraging that they've they've thought about that, where the current government hasn't. But, so any, any conclusion you wanted to reach from the, the BGC meeting? Or, can
Ted Menmuir:we explain look. It's it's it's been an interesting month to kinda reflect back on. A lot of developments coming in February. And, look, at least we're getting some clarity on the UK gamut's regulatory future. And look, these player protection measures are here to stay, but they're yet to be kind of out and out defined.
Ted Menmuir:We've got a key 6 months coming up for for the industry. And, again, going back to kind of affordability checks, I I don't think that full affordability checks will just be on the limits. I think that they are coming gonna be kind of the foundation of how UK Gaming proceeds with the rest of its agenda or the the the rest of the white paper, yeah, or white paper proposals. Yep. And what what turns out of this pilot test will also affect kind of the gambling levy, how that's structured.
Ted Menmuir:Because, again, I think what we're at the period where we actually, you know, we're drilling down on the actual mechanisms and how they're gonna be imposed. And, again, what is feasible. And I think that once the regulator and the political actors know, like, you know, this is actual this is actually, like, a blueprint that we can put through. Right? They can then start thinking about, look.
Ted Menmuir:What are the other kind of remaining elements of this review and how they shaped by affordability check as a protection on the consumer.
Martyn Elliott:Yeah. I, I think you're absolutely right. We are, it's nice that we've got some kind of, resolution or something concrete to go on, but, yeah, you're right. 1st, first step on a sorry. I'm gonna sound, quite cliched like somebody, who's just been voted off strictly come dancing.
Martyn Elliott:I was talking about the the journey we've been on through this. And, you know, it is the first step on a a longer journey, I think. And, I guess we can probably revisit this in, on March 5th next year and see where we're up to. And, we'll still be talking about it, I imagine. But, thanks for, thanks for joining me today, Ted.
Martyn Elliott:And, despite the technical issues we've, we've had along the way, We've got through it finally, I think. So
Ted Menmuir:Thank you.
Martyn Elliott:Yeah. And, thanks for listening, and come back and join us again for another episode of Igaming Daily tomorrow.
