Shares in UK gambling firms lost nearly £1.2 billion (US$1.5 billion) in value after the Guardian revealed that MPs recommended stringent curbs on online casino games worth more than £2 billion (US$2.57 billion) a year to the industry.
MPs who joined the successful campaign to cut the maximum stakes on fixed-odds betting terminals from £100 (US$128.50) to £2 (US$2.57) recommended the same limit be applied to web-based slot machine games.
The MPs, who include the former Conservative party leader Iain Duncan Smith, hope to convince policymakers at No, 10 to include tighter controls on gambling firms in the party’s general election manifesto.
Labour has already backed much tougher regulation of the gambling industry regardless of the outcome of the election.
If adopted, proposals would threaten online casinos’ take from slot-machine players, which accounts for more than a third of their income according to the UK Gambling Commission.
The £2 billion figure would rise to £2.9 billion (US$3.7 billion) if the limits were to include other casino games such as roulette. The max bet on that game was £100 a spin in high street betting shops before the government reined in the machines after a campaign that united politicians and campaigners across the political spectrum.
Markets responded to the MPs’ recommendation by staging a mass sell-off of gambling stocks on November 4. The online-only casino firm 888 was hardest hit, losing nearly 14 percent of its value in a day, a slump that cut its market value by £91 million (US$116.9 million).
The largest fall in sterling terms was suffered by Ladbrokes’ owner, GVC, whose 10.5 percent fall equals close to £547 million (US$702.8 million) in lost value, overshadowing the Isle of Man-based firm’s announcement of a new chairman.
William Hill registered a £230 million (US$295 million) decline; Paddy Power Betfair’s owner, Flutter Entertainment, £217.5 million; and GameSys, which makes online slot machine games, £78 million.
The MPs’ report put forward a series of proposals to tighten gambling regulations, with the £2 stake limit the most eye-catching among them.
Other recommendations that could crimp gambling revenues or increase firms’ costs include an end to betting by credit card, restrictions on “VIP” accounts that reward the heaviest losers with free gifts and an investigation into the use of non-disclosure agreements to silence addicts and victims of crimes committed by them.
