Will UK Gambling Companies Be Banned From Offering Bonuses?

Could legislation be introduced that bans free bets and other bonuses? Ireland has been discussing reforming their gambling laws and the UK, gambling companies are waiting to see what the new Labour government has in store for them.

Ireland has recently been discussing how to reform their gambling laws. Placing a ban on bonuses has been discussed but a total ban is considered to be very unlikely. Deputy James Browne admits that a total ban on bonuses would be impossible. Where free bets are offered though, he would prefer them not be targeted at certain groups.

In Brazil, legislation has been passed that has placed several restrictions on their gambling industry. They do include banning the offering of free bets and bonuses.

There has been plenty of criticism regarding the use of bonuses in the UK gambling industry. Critics see it as a way of providing incentives to players to continue gambling with sites. That can be particularly dangerous if the customer is one that is already having problems with their gambling.

The UK gambling industry is a highly competitive one with new companies entering the  market such as Betano and BetMGM. To attract customers and then retain them, bonuses are offered both for sports betting and online casino.

This can include the offering of free bets, enhanced odds on Premier League games and matched deposits for sports betting. Online casinos also have plenty of offers such as free spins on selected slot games, VIP clubs or special offers on games such as roulette and baccarat. Players may well not try their luck on such games if an offer wasn’t in place.

There has already been talk of placing restrictions on VIP programs that are seen at online casinos. These are particularly controversial as the rewards given to players is dependent on how much they wager at the site. This creates a situation where players keep gambling to ensure that rewards are received. There has been talk of banning these programs or at least placing stronger restrictions on them.

What would happen if a ban was imposed on bonuses? It would be a major blow for gambling companies and also gamblers and the government. Gambling sites would see one of their main promotional tools taken away from them. Unable to offer free bets or other bonuses, they would have to find other ways of attracting customers. Higher odds could be offered for example but that would hit profit margins.

While licensed and regulated gambling companies would be unable to offer bonuses, that would not apply to the illegal sites on the black market. They would continue to offer bonuses and likely ones that have strict terms and conditions. That could include only being able to use free bets on selections with higher odds or accumulators rather than single bets. All of that makes it far more difficult to actually be able to withdraw funds after using the bonus.

Gamblers do like receiving bonuses though and many would register with the unlicensed companies even though levels of customer protection are lower. If this was to happen, then it would hit the profits of licensed companies. It would be bad news for the government too as the black market companies avoid the payment of gambling taxes. It’s estimated that over a five-year spell in government, up to £335 million could be lost in tax revenue.

There are already major concerns about the growth of the black market in the UK gambling industry. A recent Frontier Economics survey (commissioned by the Betting and Gaming Council (BGC) showed that close to £2.7 billion is wagered each year with unlicensed companies, 2.1% of the total amount staked in the UK.

Introducing stricter regulations and particularly a ban on bonuses would only make the matter worse. Of those who took part in the survey, 35% said that it was the bonuses and free bets on offer that attracted them to black market gambling companies. 38% of respondents who were aged between 18 and 24 were aware of illegal sites with 16% having placed bets with them. Further restrictions could see more younger players heading to the black market to gamble.

Just how the UK gambling industry is going to be reformed remains to be seen. It’s a long-running story full of delays. Last year saw a White Paper on the subject published by the then Conservative government. Labour were in agreement with much of what was included in that document.

Now they are in power but little seems to be being done to reform the gambling industry. They want to discuss possible changes with members of the industry. This month’s budget may provide some answers, particularly in how the industry is taxed. That’s unlikely to be good news for gambling companies but banning bonuses would hit them even harder.

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