View from the City: Investment decisions stall due to white paper delay

A spectre is haunting the UK gambling industry – the spectre of regulation. Or more precisely, continued uncertainty surrounding the status and timing of the publication of the UK Gambling Act 2005 review white paper. The white paper has now been delayed four times. The most recent, in July, was caused by the Conservative Party leadership election. Publication is now not expected by DCMS until October at the earliest.

There remains healthy debate regarding what regulation should look like as well as what the white paper will include. Some form of enhanced affordability threshold looks likely. As European markets increasingly focus on introducing forms of marketing restrictions, the likelihood that the UK follows suit also increases.

Similarly, there is a growing expectation that an online staking limit for slots content will be introduced to standardise online and land-based regulation. However, within this there are a wide range of potential outcomes, making it very hard to quantify the impact or plan accordingly.

As a result, decision-making is either challenging or not occurring, with decisions being delayed in many instances until the white paper is published. The impacts of this are visible across the industry. Business cases and investment decisions are stalling. Businesses with UK exposure are seeing valuations in public and institutional markets impacted by adjustments to account for the potential changes and restrictions. M&A processes are on hiatus or in some cases have collapsed entirely.

Regardless of the content, the publication of the white paper should take a positive step towards unblocking a number of these issues and enable decision-making to occur, valuations to settle and M&A to restart. Certainty presents clear benefits and on this point the industry has already united.