Betting Business Bulletin 17th September 2017

Expectations grow over action on gaming machines

The indications grow stronger that the government is set to take action on gaming machine stakes when it announces the results of the Triennial Review in October.

The Times newspaper last week reported that the Treasury had dropped objections to the maximum stake being reduced from £100.

It claimed prime minister Theresa May supported a cut and said the review would recommend a number of options including £100, the £2 demanded by campaigners and at least two figures in between.

A ‘senior government figure’ was quoted as saying: “We know that we have to do something and that to do nothing at all would be politically toxic. It’s now really a question of negotiating what the Treasury can really live with, instead of what they want.”

The government’s review came up in both houses of parliament last week.

In the Lords Liberal Democrat peer Lord Clement-Jones asked minister Lord Ashton of Hyde what progress had been made on the review.

“Doesn’t the minister accept that it is high time the government ends its internal debate, overrides the Treasury objections and acts both to reduce the permitted stake and the speed of play on these dangerous machines without any further delay?”

In response, Lord Ashton said: “My lords, there are several misunderstandings from my noble lord.

“The first is that the chancellor has said publicly he fully supports DCMS’s work to ensure the UK’s gambling regime continues to balance the needs of vulnerable people, consumers who gamble responsibly, and those who work in the sector.”

Affiliates in the news again

There were more damaging headlines for the gambling industry after four operators fell foul of the Advertising Standards Authority (ASA) over an advert produced by an affiliate.

Ladbrokes, 888, Sky Vegas and Casumo were warned to clean up their act by the ASA after an affiliate associated with the bookmakers ran an advert deemed to have “targeted vulnerable people” by suggesting gambling could solve an individual’s personal and financial difficulties.

While none of the bookmakers condoned the actions and distanced themselves from the affiliate – a third party paid to direct potential punters to betting sites – the ASA deemed all stood to benefit and held them responsible.

A spokesman for Ladbrokes Coral said: “We take this very seriously and have been working to improve the types of advertising and marketing used by affiliates. Nobody believes this sort of ‘fake news’ marketing has a place in the sector. We’ve been reducing the number of affiliates we work with, as well as clamping down hard on anyone using our name without our knowledge in a bid to curtail this sort of activity.”

The affiliate, whose relationship with all four firms has ended, ran an advertorial, an advert written in the style of a story, which suggested an individual called ‘William’ had saved himself from considerable personal strife by taking up the offer being advertised along with ‘comments’ from ‘readers’ who shared their winning stories.

This was deemed to be “socially irresponsible” by the ASA, which also took issue with the article not clearly being identified as an advert instead of a story.

The Gambling Commission has the power to fine betting companies over misleading adverts. A spokeswoman said: “We expect operators to take action to ensure they have a clear view of what their affiliates are doing on their behalf. Where operators fail to do this, we will not hesitate to use our powers to hold them to account.”

GVC going strong

GVC Holdings, owner of the Sportingbet and bwin.party brands, continues to power ahead judged by their interim results announced last week.

Adjusted profit before tax doubled to €101.9 million (approx £89.5m) for the first six months of the year, while net gaming revenue rose by ten per cent to €441.8 m.

Chief executive Kenny Alexander said: “I am delighted with the strong progress across the group, which has continued to exceed our expectations since last year’s acquisition of bwin.party.”

He added: “Given its proven track record of creating shareholder value, GVC remains well positioned to continue to play a pivotal role in the industry’s consolidation, should the right opportunities arise.”

GVC were recently linked to a second bid for Ladbrokes Coral.

The announcement went down well in the City. Analysts at Goodbody said: “This update will be very well received by the market. Not only does the group continue to deliver significant cost synergies [but] revenue growth again surprises on the upside.”

Racing and betting set for new relationship

The first moves towards creating a body combining racing and bookmakers to develop and promote betting on the sport have been set in train.

Representatives of British racing are contacting operators to establish a betting and racing liaison group integral to the structure set to replace the Levy Board from 2019.

There have been calls from both racing and betting for such a development.

As the second part of the levy reforms introduced by the government this year, from 2019 the Levy Board’s responsibility for collecting funding from bookmakers will be taken on by the Gambling Commission, while a new Racing Authority representing the BHA, racecourses and Horsemen’s Group will be in charge of spending.

The authority has been meeting in shadow, although the search for an independent chair is ongoing.

BHA chief executive Nick Rust said: “One of the things that has been agreed in principle, subject to discussions with betting operators, is the establishment of a betting and racing liaison group that would sit as a sub-committee under the Racing Authority.

“We’d propose bringing in – and this is what we want to talk to betting operators about – four or five operators who represent the breadth of the industry, so digital and retail and a balance of types of betting and business levels.”

Battle over greyhounds continues

Betting shop channel The Racing Partnership (TRP) last week stole a march on rival SIS by publishing a proposed betting shop-orientated fixture list for 2018 comprising a minimum of 1,619 fixtures.

TRP has worked in collaboration with Bags with the fixture list comprising meetings at the 11 tracks which form the Greyhound Media Group plus Derby host Towcester.

Arc’s director of media, technology and production, and director of TRP, Mark Kingston said: “We’re delighted to have put together a fixture list based on greyhound racing from long-established tracks with a proven record of integrity and welfare.

“We have published the fixture list now to allow bookmakers to plan at a time of great uncertainty, and to protect the value of over-the-counter business in their shops.”

Greyhound racing has become a real battleground in terms of media rights with SIS, which was thwarted in an attempted hostile takeover of Bags last year, having control of fixtures from the Ladbrokes Coral tracks – Crayford, Hove, Monmore and Romford – in addition to having signed content deals with Central Park, Doncaster, Harlow, and Henlow plus some Irish greyhound racing.

SIS also claims to have all the major UK bookmakers signed up for its greyhound service from January when TRP’s rival service will also be available.

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