Will Regulation Squeeze the Bingo Industry into Decline?

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The UK Bingo scene is massive. Worth more than £1.3 billion annually, the growth of online bingo led to a proliferation of bingo websites over the last decade. However, things are changing. Since 2017, for the first time, the number of online bingo sites closing was more than the number of bingo sites opening. Since then, the gap has been widening and many bingo operators like Rank Group PLC (LON: RNK), who run Mecca Bingo, are concerned that over-regulation could send bingo into decline.

Last year saw a record number of fines dished out to gambling operators. Gambling giant 888 were hit with a record fine of £7.8 million for failing to protect vulnerable clients who still had access to their bingo platform. William Hill were also on the receiving end of a hefty fine, having to pay up £6.2 million for breaching anti-money laundering and social responsibility regulations. Operators are being more closely watched for self-exclusion than ever before. An estimated 6% of gamblers have self-excluded with numbers rising annually.

The UKGC since it took over online gambling activities in 2014 has focused mainly on sports betting and casino sites. However, the last 18 months has seen bingo operators come under the spotlight especially in advertising. Stride Gaming, a UK bingo operator, faced a £7.1m fine for compliance failures at the end of last year, following previous warnings. Compliance is even more stringent with the recent introduction of KYC (Know Your Customer) measures which as of this month require all potential bingo players to ID and verify themselves at the time of registration. It is suggested that a poor onboarding process could lead to a drop off up to 45%. In the advertising world questions are being asked if the ASA is being over-protective on gambling? Recent rulings suggest they are.

Finally, the effects of the gambling tax increase, from 15% to 21% will no doubt force a squeeze on betting operators. Already, talk is on closures be they betting shops or bingo halls and we are yet to see the effects of the increase.

Regulation has certainly tightened and doesn’t look like loosening soon. Once the dust settles down on the latest round of regulation and KYC procedures, both the online bingo sites will get used to it and learn to live with it. Online bingo in the UK will survive, but the squeeze is most definitely on.