The Competition and Markets Authority (CMA) announced on June 23rd that they are taking enforcement action against several online gambling operators. This has shone a light on the booming gambling industry and questions whether it is treating customers fairly.
The gambling sector
Gambling, which consists of the betting industry, e.g. horse racing or football betting, and games of chance, for example, roulette and the National Lottery, is a hugely lucrative business. According to statistics from the Gambling Commission UK, revenue for the sector was £13.8 billion in the year ending September 2016, which represented a 65% growth since 2009. Whilst there are many legitimate concerns about the social harm of gambling and its proper regulation, it is a major employer and the government benefits from tax revenues.
The growth of online gambling
Online accounted for about one-third of revenue in 2016 and now mobile platforms have targeted a much wider group of participants than the traditional working class male frequenting the high street betting shop. Access has become instant and people can gamble on a 24-7 basis without leaving home.
Product innovations such as the ability to bet against other people, through for example, the Betfair betting exchange; a widening of product availability such as betting on the number of corners in football matches; TV coverage of poker tournaments and the emergence of betting in-play on live events, have contributed to gambling’s rapid growth.
The market is hugely competitive and promotions, such as “free” bets or roulette spins, have become standard across the sector. These initiatives are controversial as some gambling operators make it extremely difficult for customers to obtain their winnings. The CMA found that “Customers might have to play hundreds of times before they are allowed to withdraw any money.” Of course, this then makes the gambling advice “quit while you are ahead” impossible to implement, even if someone wanted to.
A welcome development
This development by the CMA to enforce action against several online gambling operators is welcome and the terms and conditions for new gambling customers should be clear and fair. This should also be part of the overall strategy to address problem gambling with gambling firms and the government.
Finally, this controversy over terms and conditions makes me think about many other areas of our lives: how many people read the terms and conditions when they update their phone’s operating system or read their insurance policy before they obtain cover?
What are your thoughts on the growth of online gambling and the CMA’s actions? If you are interested in exploring this subject further, you can contact Des Laffey directly at D.J.Laffey@kent.ac.uk or find out more about our e-commerce module on the MSc in Marketing.
Dr Des Laffey
Des Laffey is a Senior Lecturer in E-Commerce at Kent Business School. He has published a number of papers on the gambling industry including his 2016 paper in the Journal of European Public Policy on the regulation of online gambling within the European Union. He can be contacted at D.J.Laffey@kent.ac.uk.