Coronavirus Crisis Could Cause UK Gaming Fines to Spike, Say Leading Barristers

Online gaming might be riding high during the current coronavirus crisis, but some British legal experts believe the good times may be fleeting.

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Two UK barristers have warned gaming companies that sweeping changes could hurt the industry once the coronavirus crisis is over. (Image: Finance Magnates)

As operators across the industry, including in the UK, report a surge of activity, two UK barristers have issued a warning.

In a brief issued earlier today, Richard Littler QC and Ian Whitehurst from Exchange Chambers outlined a potentially stormy time for the industry.

Betting and Gaming Strong, but Economy is Hurting

The coronavirus lockdown has put the British economy in a critical position. Chancellor Rishi Sunak recently put together a stimulus package worth more than £330 billion/$385 billion. However, the financial strain is starting to show.

London’s Financial Times Stock Exchange (FTSE 100) has fallen 28.8% since January. The Bank of England has cut interest rates to 0.25%, the lowest ever. And, economist David Blanchflower believes as many as six million Brits could be unemployed in the coming months.

In many respects, the physical prognosis for coronavirus is better than the financial one. People might recover from the virus, but economies may not. Although the British government is doing all it can to mitigate the risks, some sort of downturn is almost inevitable.

The fallout could result in HM Treasury targeting gaming companies for extra revenue. According to barristers Littler and Whitehurst, the political narrative continues to paint an ominous picture for the industry.

Recent record fines have been cited as evidence that betting and gaming is coming under increasing scrutiny. The upshot of this could be an ever-increasing culture of financial penalties for regulatory infractions.

Coronavirus Crash Could Come Back to Bite Gambling Industry

Littler and Whitehurst agree that upholding the 2005 Gambling Act and protecting consumers is vital. However, they contend that there should be a collaborative process between operators and the UK Gambling Commission (UKGC).

In their view, the recent spate of fines could suggest the UKGC is favoring this approach over other forms of disciplinary action.

“It is in that context that the Gambling Commission has begun to flex its considerable powers more aggressively of late,” reads the April 8 brief.

The pair also share the concern that new powers will not only lead to more fines, but to larger ones.

“The principal concern for the gambling industry in the medium term is if the Commission begins to lobby for greater powers to impose penalties more commensurate with a company’s turnover (not profit),” the brief continues.

An increase in the use of the “regulatory settlements” mechanism stands out as a principle issue. Although there are benefits to operators reaching agreements with the UKGC in the wake of regulatory failings, they also create a potentially problematic dynamic.

Littler and Whitehurst see the lack of transparency and independent oversight as problems. In essence, the UKGC would have the power to play “judge, jury and executioner” in cases where private settlements replace public investigations.

The combination of increased power and a growing culture of fines based on turnover could hurt the British gambling industry. Littler and Whitehurst suggest these dynamics, in tandem with a need to rebuild the economy, could unfairly increase the cost of regulatory infractions.

Regulations are there to protect. The argument, however, is that they shouldn’t be used as a tool to extract money from businesses in an effort to help fund the Treasury.

Daniel Smyth
Written by
Daniel Smyth
Dan Smyth is a poker media journeyman who politely reminds CardsChat readers that poker is played all around the world, not just America.

Comments

makisaa wrote...

This epidemic is a very dangerous situation for the global economy. Economies are already facing big problems and we are just in the beginning. On the other hand poker is part of the economy, but it seems to rise its number of players. I think that economy has a chance of restart with this situation. The same can happen for poker. Let`s hope that things will move for humanity`s good interest and soon we will recover from this unexpected situation

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M13A13 wrote...

If the coronavirus pandemic will be beneficial to online poker and other games of chance, only the future can tell, even because the economy of all countries will shrink, in other words, there will be a huge economic crisis with losses in tax collection, a drop in trade and financial markets, many people will lose their jobs and many will have no other source of income.
As people will become poorer, possibly the gambling market will suffer a lot, with deposit losses, now on the other hand many who work in live poker will migrate to online poker, but in my opinion the economic crisis will be so profound that online poker and other games of chance will suffer.

1

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