The End of Free Bets And What It Could Mean For Britain’s Gambling

With the UK Government still to declare what exactly will be contained in the 2005 Gambling act review and how it will affect gambling operators and affiliates, many industry experts have been left to speculate on what’s in store.

One of the most controversial points said to be in the document is the abolition of free bets and spins in the UK. CEO of Bojoko, Joonas Karhu, in an interview provided by igamingbusiness.com, provided some key insight into how this significant change could impact the industry.

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

He continued by saying, “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.”

As a key draw for players in their decision whether to play a game, free spins and bets are a critical part of engaging audiences and competing with rivals in the UK.

So, what does this mean for gambling operators? Karhu said, “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.”

If players decide to game outside of UK jurisdictions, this has a potentially harmful effect for both the players and the UK-based operators.

From the player’s point of view, playing outside of the UK (at least digitally using VPNs) could mean they are not protected by the gambling rules and standards enforced in the UK. This could lead to exposure to predatory gambling sites and products that may cause harm to players and increase their risk of financial insolvency.

From the point of view of UK operators, if UK customers prefer overseas operators because of their more enticing offers of free bets and spins, that leaves fewer domestic gamblers for them and, therefore, a reduction in revenue.

Karhu said, “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?”

Karhu, in his assessment of this situation, points to the theories of Adam Smith, who talks about the free market always moving capital to economically worthwhile investments.

Saying “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.”

However, suppose it no longer becomes in the affiliate’s interest to push customers toward these regulated sites and instead move towards pushing players to offshore operators that can offer more in terms of free bets and spins. In that case, both the UK gambling industry and players could suffer.

This, in combination with gambling rates being at a record low in the country, could force the closure of yet more operators that were already at a point of fragility due to the disruptions of the pandemic.

Karhu said that “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 the government takes any decision.”

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