The share price of Flutter, the FTSE 100 online gambling giant that owns the PaddyPower and Betfair brands, has edged up by half a percent this morning despite weekend reports it has chosen to cap the revenues it earns from younger customers. In a move that pre-empts an upcoming government review of the Gambling Act, Flutter is to introduce a £500 monthly limit on losses that can be accrued by customers under the age of 25.
The measure, in place since yesterday, means that younger customers will only be allowed to place bets to a maximum value of £500, adjusted for any winnings already banked the same month. That means if a customer in the under-25s age group has won £1000 that month they would be able to place new bets worth up to £1500. The cap has been set at €500 (£430) for under-25s in Ireland.
The gambling industry is under pressure to demonstrate the extent to which it can self-police itself with respect to problem gambling ahead of the Gambling Act review. And it has to tread a fine line between doing so and not shooting itself in the foot by irritating customers who don’t appreciate a nanny approach.
Flutter’s head of UK and Ireland Conor Grant alluded to that balancing act when commenting on the introduction of the new rule:
“There’s a very fine balance for us in providing the safety net and dictating what customers can and can’t do with their money.”
Flutter estimates that only around 5% of the roughly 750,000 active gamblers in the UK and Ireland under the age of 25 ever lose over £500 a month and that a much smaller percentage do so regularly. It’s not clear whether higher earners or high net worth under-25s will be able to exempt themselves from the restriction if they actively pursue doing so.
That would mirror the regulation of risky investment products that are banned from being marketed to retail investors. A private investor may access such products by self-declaring as a high net worth or sophisticated investor and therefore appreciative of the level of risk they are taking on.
In 2020 the Gambling Commission banned the use of credit cards to make deposits into customer accounts with betting companies in the UK and in 2018 operators voluntarily banned themselves from advertising from “whistle to whistle” during live sports events. Last week operators agreed to introduce both restrictions to Ireland.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.