Regulatory Changes Bring Significant Shifts to the UK’s Gaming Sector

The UK gaming industry continues to be a profitable one but will this continue to be so as stricter regulation is introduced?

There have been plans for stricter regulation of the UK gambling industry for several years. There was a White Paper on the subject of gambling reform published by the then Conservative Government. Little action was taken but the new Labour administration is starting to take action.

April will see a new maximum stake limit introduced for online slot games. These are extremely profitable for the industry. Gambling companies make a significant proportion of their profits from the UK’s online slot and casino websites. According to Offersbet and market data collected by the Gambling Commission up to December 2024, the profits from slots increased 15% year on year to a new high of £709m. The number of spins increased 9% in the previous quarter to a new peak of £23.9bn.

There have been major concerns though over how addictive they can be. Politicians and those who run charities that help people who have suffered gambling harm have long called for changes to be made.

Younger players are particularly keen on playing online slots. Many have themes such as popular TV shows or movies that attract players. However, there is no maximum stake limit for the games and huge losses can be incurred. This will change in April with those aged between 18 and 24 not being able to stake more than £2 on each spin. The following month will see older players have their maximum stake reduced to £5.

This is not the first time that such action has been taken in this area. High Street betting shops have fixed odds machines and players were making massive losses as they could stake up to £100 per game. After a lot of campaigning, the maximum stake was reduced to just £2. This led to a drop in revenue, some shops being closed and staff redundancies being made.

Will the same happen when the new maximum stake limits for online slots are introduced? Stella David is the Interim CEO of Entain whose UK businesses include Coral and Ladbrokes. Her view is that those in the second and third tier of the industry may be affected by the changes. Players may desert those sites and head to those owned by Entain so it may be “a gentle tailwind” for them and they should still enjoy a secure future.

Whether that is what happens remains to be seen but those who have been campaigning against online slots are still calling for more action to be taken. Many believe that the £2 limit should be applied to all players, not just the younger ones.

Stewart Kenny is one of the founders of Paddy Power but left the board in 2016. He still has many concerns over the safety of online slot games. His view is that they are too fast and they need to be slowed down. There was a reduction in speed four years ago but Mr Kenny believes a further reduction is needed to make them safer.

He says that there is “only seconds” between a player making their stake and finding out if they have won anything. This swift turnaround means players can “repeat the dose” and find themselves losing large amounts of money in a very short period of time. He is also concerned about the fact that many spins nearly produce wins is “fundamental to gambling addiction.”

While he continues to bet on horse and greyhound racing, he does not visit online casinos. Another area of concern for him is the offers that gambling companies make. These are used to attract new customers, for example free bets or spins.

Once a player has signed up with them, more offers are made to retain their custom in what is a very competitive market and to bet at their online casino. Kenny sees this as the gambling companies making an attempt to “try and suck you into the highly addictive online casino by sending you free spins.”

Other measures are also due to be introduced this year. While gambling companies have been making voluntary donations each year, they make varying amounts. The funds are used to help those affected by gambling harm. Now the Labour government is introducing a compulsory levy with the aim of raising £100 million a year. The amount companies will have to pay will range from 0.1% to 1.1% of their Gross Gambling Yield.

2025 is therefore going to be an interesting one for the UK gambling industry. Stricter affordability checks could also be on the way. The concern of gambling companies is that such moves might lose them custom to the unlicensed black market and further affect their profits. Time will tell us just whether that will be so.