The free bet dilemma

The UK government’s review of the 2005 Gambling Act has been rumbling on for almost two years now, further pushed back following the resignation of Prime Minister Boris Johnson in July.

This leaves operators, suppliers and affiliates expecting change to come but not knowing what that change will be or how long till new requirements come into force, Bojoko chief executive Joonas Karhu says. 

“Of course, over the past few months, there have been several ‘leaks’ as to some of the changes being considered, with stake limits on slots, enhanced affordability checks and a ban on football team shirt sponsorships just some of the measures being considered.

Karhu continues, “while everyone in this industry wants to ensure players are fully protected at all times, there is a real risk that we are heading towards overregulation, and that is certainly the case with one of the other measures being mulled over – a ban on free bets and free spins.

For operators and affiliates, this would be a concerning change to regulations and could potentially have the opposite effect as that intended by the UK government.”

Free bets and free spins are a major factor for consumers when deciding to play and are also one of if not the key aspects of online casino that affiliates create content around and used to engage players and drive them to their licensed operator partners.

What does this mean for gaming operators?

This, of course creates major issues if GB-licensed operators are no longer allowed to offer free bets and free spins to players. 

“If UK operators and affiliates can no longer use free bets to engage consumers and promote brands, where will that leave the sportsbooks and casinos and the affiliates that promote them?

“It must be remembered that it is not illegal for UK players to wager at offshore sites, although it is illegal for those sites to actively target UK players. Could a ban on free bets and free spins ultimately push more UK players to these sites? I would say that is a real possibility.”

Karhu recognises that if this does happen then players are not afforded the same protections – if any protections at all – as they do when playing at a Gambling Commission-licensed site. 

“The UK is already considered to be one of the most stringent when it comes to responsible gambling. A mass player exodus could lead to the British market no longer being viable for a growing number of operators and, as we have seen in recent months and years, could lead to several licensed brands withdrawing from the market, further reducing customer choice.” 

“If there are bigger opportunities for running offshore sportsbooks and casinos, could this lead to more operators investing in these sites rather than pursuing regulated markets?”

At Bojoko, Karhu draws upon part of Adam Smith’s free market theory and the idea that capital moves towards economically worthwhile investments.

“Smith’s theory would also apply to affiliates, who may find that in order to meet the needs of their visitors and members they need to start promoting offshore sites, too. 

“Affiliates do a tremendous job of ensuring players are channelled to licensed sites while also educating players on the importance of safe gaming and the tools available to them to help them stay in control of their play.”

But if it is no longer viable for affiliates to work with and promote GB-licensed online casino and sportsbook brands, it is not unreasonable to expect many to push players to offshore sites that can offer free bets and free spins. Ultimately these sites will allow them to generate more revenue.

Considering gambling rates

He points out that problem gambling rates are at a record low in Great Britain. The latest Gambling Commission report found that just 0.2% of the UK population was considered to have a gambling problem.

Karhu says that lessons should be learned from markets such as Sweden, where restrictions are even tighter than in Great Britain. “Operators can only offer one welcome bonus with no further bonuses or incentives allowed. This has led to relatively low channelisation rates for licensed operators.”

A report published back in May suggests that if some restrictions were lifted, channelisation rates could jump from around 80% to 90% and generate an additional SEK1bn in tax revenue.

“It is my belief that all of the questions I have raised about the impact a ban on free bets and free spins could have on the UK market must be considered before any decision is taken by the government,” Karhu adds. 

There is a real risk of taking action for the sake of taking action, and in this case, it could do untold harm to operators, affiliates, the wider industry and most importantly the players we are all seeking to protect.”