Industry predictions for 2024: Clarity on affordability checks and more voluntary sponsorship bans

Melanie Ellis, partner at Northridge Law

The importance of getting financial checks right

With a range of legal and regulatory changes expected to come into force during 2024, one that is particularly worth mentioning is affordability checks. After years of uncertainty, clarity on the Gambling Commission’s expectations for “financial risk checks”, as they are now calling them, is on the cards. Given the continued debate about whether the early stage “frictionless” checks are truly frictionless, this is likely one for later in the year and we may see some amendment to the current proposals.

However, once in force, operators should not expect it to simply be a case of complying with the new requirements and avoiding any risk of regulatory action. There are two reasons for this: firstly, operators must still use their discretion to decide what to do with the results of every check, and, secondly, operators will need to continue using a range of other indicators of gambling harm. They will inevitably be criticised if they only carry out checks when the financial triggers are hit ignoring, for example, time spent gambling, even if overall losses are low.

Fewer regulatory reprimands in the UK

My next prediction is that we will see fewer regulatory penalties from the Gambling Commission than we did in 2023. My view is that 2023 will be seen as the “high water mark”, in terms of the number and size of financial penalties against gambling operators, as it saw the conclusion of licence reviews relating to a particular period in around 2019-2021 when operators’ compliance procedures lagged behind the Commission’s expectations. In addition to the fact that many operators have now brought their policies and procedures up to speed, the Commission’s resources will continue to be diverted to implementing the workstreams arising out of the white paper for much of 2024.

New wave of innovation

Finally, I think we may see a new wave of product and marketing innovation in 2024. Some of the legal and regulatory changes arising out of the white paper present opportunities for operators with a new product or advertising campaign that is less affected by new restrictions. For example, online games that do not meet the definition of slots will be well placed to capture some of the market share once stake limits are imposed, also products that are designed to appeal to customers with a lower, sustainable spending pattern are likely to do well.

Over the past few years we have seen consolidation of much of the industry into a few large operator groups, but the upcoming regulatory changes may begin to reverse the tide, presenting opportunities to smaller operators and new market entrants who can be quick to innovate.

Felix Faulkner, solicitor at Poppleston Allen

The looming General Election will cause further uncertainty in the UK 

While no one knows exactly when the next election will take place in the UK, what’s clear is that with the latest possible date being in January 2025, both of the main parties are now in full election campaign mode. What this means for the gambling industry is anyone’s guess.

After taking almost half the maximum parliamentary term to produce the white paper after launching its Gambling Act review, the current government doesn’t seem to be in much of a hurry to actually put its recommendations into place. Having consulted on most of the topics covered in the white paper during the two-and-a-half years it took to publish it, its first step after doing so was to consult further, in many cases on the same topics.

And all the consultations taking place, albeit fairly slowly, might be for nothing anyway if Labour comes into power. Despite kickstarting the growth of the country’s gambling industry almost 20 years ago with the introduction of the Gambling Act 2005, Labour seems unlikely to take such a liberal approach again if it regains power. It might rip the whole thing up and start again. Thus, it’s fair to say the UK gambling industry is facing a very unpredictable future right now.

The statutory levy will be introduced  

Notwithstanding the previous prediction, the introduction of a statutory levy seems as close to a done deal as it gets. Not only is the government consulting on its introduction, the Gambling Commission is concurrently running a consultation on removing the existing requirement in the Licence Conditions and Codes of Practice that says that licensees must make a contribution towards funding research, prevention and treatment of gambling-related harm.

The levy was one of the key proposals of the white paper and it’s hard to envisage much political downside to its introduction for any party. The current system whereby operators contribute disparate amounts based on their own choosing is clearly inadequate and there have been calls from various quarters, including within the industry, for a fairer system.

Having the funds distributed by the government will also remove any disincentive for organisations to accept money on the grounds it originated from the industry, as is sometimes the case currently. Whatever happens with the government, a statutory levy seems inevitable.

We will see more ‘voluntary’ sporting gambling advertising bans 

When the Premier League announced last year that it was banning gambling companies from sponsoring shirt fronts from the end of the 2025-2026 season, many anti-gambling campaigners argued it hadn’t gone far enough. Given the strong links between football and gambling, it was understandable leagues wanted to retain the ability to allow gambling sponsorship pitch-side and on shirt sleeves, etc.

But that was before gambling started having an impact on the actual product football is providing, namely its players. We’ve now seen the unprecedented playing bans of two high-level players over breaches of gambling regulations, first with Brentford striker Ivan Toney and then Newcastle’s Sandro Tonali, with both linked to gambling addiction.

Therefore, I think we will see more clubs, leagues and sporting bodies reassess their relationships with gambling companies and this may well extend beyond football.