How Is Gambling Activity Becoming A Concern For The UK?

Overview of the Gambling Industry of UK

Gambling Industry has a long history in the UK, and it is said that the industry existed since the time of industrial revolution when people started betting on horse racing. This kept on the burgeoning, especially in United Income phase, because it allowed people to make alternative income, from traditional entertainment activities. With the advent of Casinos and other betting-based activities, the industry expanded further. But, it obviously had its dark side as well, as this activity is extremely risky and people were also losing a lot of their money, primarily because this activity was based on speculation without any mathematical probabilities taken into consideration, unlike investment in assets as well as gambling on Card based games, which were completely backed by arithmetic and behaviour science. Recently, the official statistics of the Gambling Commission reported that the total Gross Gambling Yield (GGY) of the Great Britain Gambling Industry were at £14.4 billion for the year ended March 2019. This was a marginal decrease as compared to the last twelve months, but, a big reason for the decrease was the poor economic environment and hence, people willing to keep their money safe. Around £1.5 billion of this yield was used for good causes, showing a massive rise in this industry in the past few years

Highlights of the UK’s existing Legislation – Gambling Act 2005

The gambling legislation, applicable for both land-based and online gaming activities in Great Britain is the Gambling Act 2005. The primary objectives set out by the Act, are to prevent gambling from becoming a source or to be associated with any crime or disorder, make sure that all the gambling activities are transparent and are conducted in a fair way so that no one can have an unfair advantage from such activities as well to protect young children being exploited or harmed by any acts of Gambling. This legislation has been supported by other sub regulations such as the Gambling (Licensing and Advertising) Act 2014. This industry is one of the biggest tax generators in the country, since 2014 when a regulation stated that operators must pay UK remote gambling duty on all transactions with customers who are residents of the United Kingdom.

Problem Areas in the UK Gambling sector

This rise in the Gambling sector in the UK, has been accompanied by distressing stories every day, displaying the risks of the industry and how some people have been seriously exploited by this sector. As per a research report published by the Gambling Commission in February 2019, it was reported that 2.7 per cent of all gamblers feel guilty about their gambling activity, 3.1 per cent of gamblers, gamble more than they can afford to lose. Around 2 per cent of all gamblers have told that they are addicts or they have a gambling problem. 0.7 per cent of all gamblers have been reported to be problem gamblers, meaning they could cause harm to themselves or people surrounding them, due to their aggressive gambling habits.

There are various adverse incidences related to gambling. Reportedly, Bet365, a bookmaker and betting company in the UK, a website where most of the football enthusiasts in the UK participate in betting on football games, was allowed to stream some of the Football Association (FA) Cup Games, one of the oldest football cup competitions in the world. There have also been stories around, how one gambling operator, Betfred has been involved in the treatment of gambling addiction and the mental health problems associated with it, which is a huge conflict of interest on its own. Another report has suggested that the owners of Betfred are key donators towards the conservative party and have withdrawn £5.2 million from their company in the last three years, out of which £375,000 has been donated as political contributions to the party currently in power in the United Kingdom. This has raised major red flags around the entire situation. The research from Gambling Commission has numbered just under half a million problem gamblers in the country, who were badly impacted by debt, mental health issues like anxiety and depression, family separations and in some cases, even suicide.

How can this problem be curbed?

Following the outrage against the problems associated with gambling activities, there has been an outcry to overhaul the current legislation, to address the above-mentioned problems. The UK Administration promised a review of the existing Gambling act of the country and said that the right changes will be made in the amendment following the above-discussed review. The last such review was conducted in 2001, but since then there has been a major technological change in the country which allows operators to conduct some unfair practices, that are currently, legal in nature. The review promised by the government needs to take into consideration the technological changes as well as the use of data so that any unfair practices could be avoided. The scope of the Act needs to be broadened and should also cover any malicious attempts from the operators. Another point is that this needs to happen as early as possible, without any delay, because with every passing day it is bringing in new scandals around this industry. Lastly, there need to be an additional support amendments or smaller added legislations so that the scale of the law can be implemented widely, as experts argue that smaller leaner and agile acts are better than a single big act.

It is extremely important for the government to get the balance between economic freedom as well as a social intervention to be right, for smoother functioning of this industry, which can also ensure Britain’s regulation of gambling be an example for the entire world.

Any changes in the regulation in the future will have a significant impact on the gambling and casino companies that are trading on the London Stock Exchange. Here are the recent stock price performances of three major players in this industry trading on the FTSE 250 Index of the London Stock Exchange (LSE).

Stock Price Performance of major players in the IndustryÂ

WMH Stock Price Performance

As on 23rd January 2020, (08:30 A.M GMT), at the time of writing this report, William Hill Plc’s stock value has been reported to be at GBX 177.05 per stock on the LSE market, an upside in the value of 0.03 per cent or GBX 0.05 per stock, in comparison with the last trading price of the stock on the previous day, that has been reported to be at GBX 177.00 per stock. The market capitalisation of William Hill Plc was reported to be at £1.547 billion with regards, to the price at which the company’s stock was trading at the time of writing.

The beta of the stock of the company has been reported at a value of 0.73, which basically means that the William Hill Plc’s stock has shown less volatility in its movement, as opposed to the volatility of the comparative index in the last twelve months.

GVC Stock Price Performance

As on 23rd January 2020, (08:35 A.M GMT), at the time of writing this report, GVC Holdings Plc’s stock value has been reported to be at GBX 904.00 per stock on the LSE market, a drop in the value of 0.75 per cent or GBX 6.80 per stock, in comparison with the last trading price of the stock on the previous day, that has been reported to be at GBX 910.80 per stock. The market capitalisation of GVC Holdings Plc was reported to be at £5.30 billion with regards, to the price at which the company’s stock was trading at the time of writing.

The beta of the stock of the company has been reported at a value of 0.57, which basically means that the GVC Holdings Plc’s stock has shown less volatility in its movement, as opposed to the volatility of the comparative index in the last twelve months.

888 Stock Price Performance

As on 23rd January 2020, (08:40 A.M GMT), at the time of writing this report, 888 Holdings Plc’s stock value has been reported to be at GBX 147.55 per stock on the LSE market, an upside in the value of 0.03 per cent or GBX 0.05 per stock, in comparison with the last trading price of the stock on the previous day, that has been reported to be at GBX 147.60 per stock. The market capitalisation of 888 Holdings Plc was reported to be at £543.68 million with regards, to the price at which the company’s stock was trading at the time of writing.

The beta of the stock of the company has been reported at a value of 0.84, which basically means that the 888 Holdings Plc’s stock has shown less volatility in its movement, as opposed to the volatility of the comparative index in the last twelve months.

Comparative Stock Price chart of WMH, GVC and 888

(Source: Thomson Reuters) Daily Chart as on 23-January-20, before the closing of the LSE Market