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Examining the Impact of New Slot Stake Limits in the UK

The DCMS (Department for Digital, Culture, Media & Support) released a white paper in 2023 containing the Government’s proposals to update the regulatory framework for the gambling industry.

The government’s proposals included information on the importance of tackling the issue of player protection and minimising the risks linked to high-stakes slot games. This initiative is a response to years of extensive public campaigns and research conducted on gamblers in the UK, consistently highlighting the necessity for stricter regulation.

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New Slot Stake Limits

Starting in September, individuals aged 25 and above will be subject to a stake limit of £5 when playing slot games either online or at a casino or betting shop. Whereas individuals between the ages of 18 and 24 will be required to adhere to a lower £2 limit.

The announcement of these new stake limits was widely anticipated following the release of the white paper review of the Gambling Act 2005 in April of last year. This move signifies a new era for the UK market and its consumers, as online operators are now mandated to take concrete and actionable measures.

When Will the New Stake Limits Be Enforced?

The Government has outlined a six-week transitional phase for operators to incorporate the £5 stake limit for all customers. An additional six weeks will be granted to develop the necessary technological measures to enforce the £2 betting limit for customers under 25. Failure to devise the required technological solutions within this timeframe will result in operators being obliged to impose a universal maximum betting cap of £2.

Why Is There a Lower Stake Limit for Those under 25?

As established, the government has decided to implement a lower betting amount for individuals under 25, attributing this decision to the notably high problem gambling rate observed within this demographic. NHS data indicates that 8.7% of the population aged between 18 and 24 have experienced some issues with gambling, with the majority of these problems being related to slot games.

“Although millions of people gamble safely every single day, the evidence shows that there is a significantly higher problem gambling rate for online slot games. We also know that young adults can be more vulnerable when it comes to gambling-related harm, which is why we committed to addressing both of these issues in our white paper,”

– gambling minister Stuart Andrew stated.

As highlighted by the government, this age group generally has less disposable income and is undergoing continuous neurological development, which can affect their perception of risk. Additionally, this period in their lives often involves significant milestones, such as learning to manage money independently for the first time.

Furthermore, the government noted that there is substantial evidence indicating a more significant association between harm caused by gambling and instances of suicide among younger adults.

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How Will This Impact the Industry?

The UK Government has estimated that the newly introduced stake limits could significantly impact the industry’s gross gambling revenue, possibly costing up to £166.2 million a year.

While the stake limits are regarded as a pivotal step in modernising the UK’s gambling laws for the digital era, they have sparked intense discussion within the online gambling sector. Some critics of the consultation feedback have raised concerns that these measures might curtail personal freedoms and pose significant enforcement costs.

In addition to the UK Government’s projections, the Department for Culture, Media and Sport has indicated that the new restrictions could lead to a 5.2% decrease in the gross gambling yield from online slots as a percentage of the total online slots GGY for the fiscal year 2022-23. This is expected to result in a 2.6% drop in the overall remote GGY for the same timeframe.

However, the Department for Digital, Culture, Media, and Sport has emphasised that implementing a £5 bet limit on slot games would effectively proportionately meet the Government’s objectives while minimising the risk of unintended outcomes like driving consumers towards unregulated online markets. Moreover, it was pointed out that only a tiny fraction (0.6%) of all online slot spins in the UK involve wager amounts exceeding £5.

The £2 limit has sparked more debate. While 30% of respondents to the Government’s consultation supported a reduced limit for younger adults, others have raised concerns that implementing such restrictions would necessitate significant development efforts from operators and developers. This approach is seen as much more intricate and exorbitant than setting a universal limit.

That said, the DCMS states that most respondents thought that the limits on £10 bets could find a middle ground between protection and autonomy. This suggests a widespread desire in the industry to shield players from excessive losses effectively. Additionally, the department mentioned that newer games such as Slingo, which merges features of slot games, jackpot slots, and bingo, might also fall under these new restrictions.

What Do the Stakeholders Say?

The new limits were met with varying responses across the sector, reflecting diverse interests and concerns among stakeholders. As mentioned, there is a faction that welcomes these changes, viewing them as necessary steps toward a safer gambling environment, particularly for the most vulnerable groups, i.e., the under-25s.

Bally’s CEO, Robeson Reeves, has expressed little concern about the upcoming regulatory adjustments in the UK, specifically the introduction of online stake limits. He suggests these measures will lead to a more sustainable business model.

As the UK maintains its strong performance, the CEO faced inquiries regarding the regulatory challenges ahead. The prohibition of higher online slot stakes could theoretically lead to decreased revenue.

In response, Reeves responded that the company had actively collaborated with the UK Government and the Gambling Commission, expressing his belief that the ensuing decisions were reasonable and had a “genuine focus on player protection.”

Betting and Gaming Council CEO Michael Dugher supports the government’s objectives but highlighted the possible financial implications for operators.

“It is important to recognise that measures like this come with a cost to our members and impact their customers,” he stated.

“Nothing in the white paper should be viewed in isolation, but instead seen as a total package, and I would urge ministers and the regulator to remain mindful of the overall impact these changes make on BGC members,” he added.

On the other hand, Victoria Reed, Better Change CEO, was highly critical in her evaluation of the new regulations. She labelled the introduction of the new stake limits as an “own goal” by the Government and criticised it as “lazy legislation purely to appease political pressure.” According to Reed, a proactive approach is preferable in this situation, advocating for player education as the foremost strategy to enhance outcomes related to gambling harm.

What Do We Think?

The news about the introduction of new stake limits for online slot games in the UK represents a significant regulatory shift aimed at curbing problem gambling, especially among younger adults who are statistically more vulnerable to gambling-related harm. While the intention behind these changes is clear, it is vital to consider the broader implications for all stakeholders involved.

We fully support initiatives promoting responsible gambling and protecting consumers, particularly those at risk of harm. The data indicating higher problem gambling rates among 18 to 24-year-olds is concerning, and addressing this issue should undoubtedly be a priority.

However, it is also crucial to understand the impact such regulatory changes may have on the industry. Stakeholders cannot overlook the projected loss in gambling revenue, their concerns regarding enforcement costs, and their questions about personal freedom. Such changes may also push players towards unregulated markets or multiple account sign-ups, which would have the opposite effect of what the regulations intend.

To summarise, while we support the government’s efforts to update and strengthen the regulatory framework for gambling to protect consumers, particularly younger adults, we also recognise the challenges and potential unintended consequences these changes might bring to the industry.

A collaborative approach involving all stakeholders in developing comprehensive, effective strategies is essential. Furthermore, any measures taken must result from careful consideration, ensuring they are both effective in protecting consumers and fair to industry operators.

This approach should balance regulatory measures with education, support and innovation to ensure a healthy, sustainable gambling entertainment environment that protects consumers while allowing the industry to thrive and increase.

Alex Hussain Gambling Journalist

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