“Slower customer acquisition”
Ladbrokes owner Entain has seen £1bn ($1.2bn) knocked off the company’s market valuation citing the UK’s new safer gambling laws as having a bigger impact than expected.
On Monday, shares were down as much as 15%, leaving the company down 33% for the year.
revenue was “softer than expected” since the summer
As a result of the UK’s safer gambling rules, Entain’s revenue has been “softer than expected” since the summer, the company said. Despite the new rules not being put into place yet, Entain enacted them early, and when they were announced, the company took a £110m ($134m) revenue hit.
In addition to the UK, there was also slow revenue growth in Australia and Italy.
Russ Mould, investment director at AJ Bell, said that governments are ramping up efforts to prevent social harm from gambling.
“This means companies have to spend more on measures to mitigate problem gambling and that can lead to slower customer acquisition,” Mould said.
Sticking point
Since the release of the UK government’s gambling reform white paper in April, there has been plenty of discussion over the new rules. One focus has been on affordability checks and what they mean for customers, betting shops, and online gambling.
believe that many customers will turn to the black market
Independent bookmakers have already voiced their concerns over affordability checks, with one arguing they are a “complete mess.” The issue for many independent bookmakers is whether or not they will have to conduct affordability checks on customers before they can place a bet. If they do, they believe that many customers will turn to the black market, which is becoming easy for bettors to access.
This is despite reassurances from Andrew Rhodes, chief executive of the Gambling Commission, that affordability checks “would not apply to betting in bookmakers or at the racetrack.” It would only apply to online gambling.
The threat of the black market
One area that could see “significant financial implications” from the black market is horse racing.
According to the British Horseracing Authority (BHA), the UK Gambling Commission (UKGC) is continuing to underestimate the threat of the black market. Because of this, the black market could impact customer protection and the integrity of the sport.
very small, but estimates do vary”
Rhodes has said that while there is a growing black market, the size of it in the UK is “very small, but estimates do vary.”
Yet, at the same time, figures show that 73% of 296 people would be happy to use the black market if they were required to hand over more private information to bookmakers in order to place a bet.
