View from the City: the impact of the GC's consultation response

The Gambling Commission’s (GC) response to its summer 2023 consultation was published on 1 May 2024, the same day the Betting and Gaming Council (BGC) released an interim affordability code.

In the hours following publication, there were marked increases of about 1% in share prices of the major listed gambling companies. However, these changes were minor in comparison to previous announcements on the topic and had mostly dissipated by the end of the day.

A look at the respective outcomes from the response topics covered can help to explain this. The most publicised of these – financial risk and vulnerability – saw upsides for operators on three fronts.

They were the arrival of some clarity, if not certainty, regarding the direction of travel over the next 12 months; the confirmation that financial risk, rather than affordability, would be the subject of a pilot; and a ‘safe harbour’ of thresholds for operators to work within under the BGC code. Much of this was expected, hence the muted market reaction, and the outcome of the pilot will be key to longer-term fortunes of the UK market.

Of the other topics, on direct marketing, the industry was unable to shift the GC’s view that marketing should be ‘opt-out’ by default, resulting in the proposals from the consultation largely being carried forward to implementation.

As for remote game design, the impact of the proposals for changes to casino games mirroring those in place for slots is likely to be short-term operational complexity higher up the value chain as opposed to a hit to revenue, with casino games inherently less affected by spin speed and live casino likely to be unaffected by prohibitions on ‘celebrating a win’.

The remaining changes in the consultation – to age verification and the personal management licence regime – are unlikely to be of interest to investors.