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By Dale Shelabarger, Updated:
Gambling operator share prices plummeted on Thursday last week following news that the Gambling Commission is to consider cutting the maximum allowed stake at online casinos to just £2.The announcement was made by UKCG CEO Neil McArthur during a meeting with an all-party parliamentary group of MPs, tasked with investigating gambling-related harm.
Following the revelations, investors in online casino and betting firms immediately staged a sell-off. High-street giant William Hill fell by around 8% while GVC and Playtech were both down 7%. Although the losses suffered by rival companies such as 888 and Flutter weren’t quite as pronounced, the overall stock market value of UK gambling operators plunged by more than £500m.
As part of an evidence giving session, McArthur told the parliamentary group that the UKGC would consider the maximum limits allowed for online betting and that a decision would be made within six months. A spokesperson for the regulatory body confirmed the news, stating:
“We said last October that we would be looking at online stake limits as part of our ongoing work to reduce the risks of gambling-related harm. This work is in addition to us focusing on VIP practices, advertising technology and game design. We will publish our assessment and next steps for online stakes and further protections later this year.”
In November 2019, an interim report by the All-Party Parliamentary Group (APPG) proposed that a stake of £2 be applied to online slots in order to bring them in line with slot machines at high street betting shops. The measures were intended to battle the perceived ‘public health crisis’ brought about by gambling addiction in the United Kingdom. At the time, operator share prices sunk by around £1 billion.
However Labour MP Carolyn Harris declared that the report highlighted a need for a “root and branch review” of online gambling.
“Stakes and prize limits online would be a major step forward in reducing the harm caused by the sector. It is not at all clear why the Gambling Commission is not looking at this as a matter of urgency. It is an abdication of its responsibility as a regulator. There must be consistent and appropriate regulation of all forms of gambling.”
The Government has pledged to review the 2005 Gambling Act, first unveiled under the stewardship of Tony Blair. It has also given the go-ahead for many of the regulations already imposed on the sector. Nevertheless, anti-gambling campaigners suggest the measures should have been taken much earlier and that current legislation is not fit for purpose in regards to digital betting.
The influential APPG has been highly successful in generating the support of all parties in tackling gambling harm. And Thursday’s announcement marks the second such occasion that the APPG has negatively impacted the stock market value of UK gambling operators. Judging by the current climate, it probably won’t be the last.
Be sure to check back for updates about this and other major developments in the iGaming industry and to find out about gambling operator share prices as things develop.