House of Lords grill the ‘big five’
Top bosses from Britain’s ‘big five’ have admitted to the House of Lords how much money they make off VIP player deposits. The revelations were made this week during a two-hour hearing, held as part of an ongoing government review of the 2005 Gambling Act.
Bet365, Ladbrokes Coral, PaddyPower Betfair, SkyBet, and William Hill disclosed that they receive up to 38% of deposits from individuals they designate as important customers. VIP status is usually given to frequent or high-stakes gamblers.
The gambling firms also revealed their tactics to keep big spenders coming back in an increasingly saturated market. The companies offer not only competitive rates to place a bet, but free sporting events tickets and even cash bonuses to get customers’ attention.
Major operators open up about earnings
GVC, the largest competitor and the parent company of Ladbrokes Coral, disclosed that despite designating just 1.4% of its customers as VIPs, that group could make up to 38% of total deposits received. With a turnover of around £2.49bn ($3.12bn), the fees earned from VIPs could amount to millions.
William Hill also cashes in on VIPs, allocating the title to 0.6% of their customer base and reaping the reward of around a fifth of all deposits. Last year, William Hill had earnings of £1.6bn ($2.08bn).
the fees earned from VIPs could amount to millions
Bet365, PaddyPower (and owner of Flutter), and Skybet said they take between 1% and 2% of all VIP deposits.
Peers concerned about “predatory” schemes
The review by the peers of the House of Lords also looks at whether high-rolling customers are more vulnerable than others.
Liberal Democrat peer Baroness Thornhill described the way VIP schemes are set up as “predatory”, highlighting that a large percentage of deposits come from a small segment of users. She feels such programs “[play] on the vulnerability of people,” adding “it is certainly something we would be concerned about.”
Fines already dished out
The issue of VIP deposits is something the UKGC has been looking at for some time. In the summer of 2019, it fined Ladbrokes Coral £5.9m ($7.67m) after it was found liable for a variety of failings. In one instance, the company allowed a customer to bet and lose £1.5m ($1.95m) with no due diligence checks carried out.
Other gambling firms such as Betway have come under fire for offering tickets to customers who were gambling with stolen money.
The House of Lords will now recommend to the UK Government whether a review of the 2005 Gambling Act is deemed necessary. The law was last looked at in 2001.