Warnings ignored – online stake limits set for April 2025
Another milestone in the Gambling Commission’s (UKGC) legislation review is almost upon us. And if the latest affordability check developments are anything to go by, the impending implementation of stake limits is likely to have significant ramifications for the industry.
Stake limits for slots are a central component of the 2023 White Paper and resulting review. They have been on the cards for some time, but the specifics have now been worked out, and the legislation will come into force in April 2025.
Despite warning signs from around the world, the UKGC has decided to go ahead with the controversial move.
The limits in numbers
Actual limits will depend on the player’s age, and it will be the casino’s responsibility to ensure that younger players are not able to wager more than the permitted limit. For players aged 18 to 24, the per-spin stake limit will be £2. For those aged 25 and over, this figure will be £5.
The £5 limit comes into effect on 9 April 2025, initially applying to all adults. On 21 May, the £2 limit will take effect, applying to players 24 and under. This phased introduction is intended to give casinos a chance to adapt and adjust.
These limits apply to all online slot games, and are per ‘game cycle’. A game cycle is defined by the Commission as “the period beginning with the initiation of a game by the individual and ending at the point at which all money staked during the game has been lost or all money won during the game has been delivered”.
What is the UKGC looking to achieve?
By introducing these limits, the UKGC is hoping to protect players, particularly younger ones. This remains the central goal of the 2023 White Paper Review.
Like many other aspects of the review, stake limits are targeting slots. This is because online slot games have been associated with higher levels of gambling-related harm. Studies have found that slots carry the highest risk of financial loss and are favoured by problem gamblers.
Other measures that the UKGC has applied to slots include specific technical standards, minimum spin speeds, and bans on both bonus buy and autoplay features.
Determining factors
There are a few factors that appear to have informed the Commission’s decision to set these low limits at £2 and £5.
For instance, in 2019, fixed odds betting terminals (FOBTs) had their stake limit lowered from £100 to £2, setting a precedent. At the time, some campaigned for the same limits to be applied to online slots, and some anti-gambling organisations have been lobbying for stricter online regulations ever since.
The lower limit for players under the age of 25 is to address the vulnerability of younger players. The decision to have two limits was based on research into player behaviour carried out by the UKGC and Department for Culture, Media and Sport (DCMS), which found younger players to be more susceptible to gambling-related harm.
Concerns seemingly ignored
During the consultations, casinos and their representatives resisted the limits, suggesting they would drive players to unlicensed casinos which offer limit-free gambling. The UKGC claims to have factored in these warnings and struck a balance, but its actions tell another story.
Implications, reservations, experiences in other countries
In addition to warnings from casinos in Britain, the UKGC had plenty of data from international regulators to consider.
Across Europe, regulators have implemented tighter regulations, only to see vast numbers of players flocking to illegal black market casino sites. The impact has been very damaging for some economies, and puts players in a far more dangerous position.
The German and Dutch experiences
For some reason, the UKGC has opted not to heed warnings from Germany, whose €1 per spin stake limit has driven the majority of players to illegal sites. Admittedly, this limit is lower than the UKGC’s, but the pattern observed is likely to be similar, if perhaps not to such an extent.
In the Netherlands, measures such as affordability checks and bans on advertising have had a similar effect, pushing players away from safer, legitimate sites, where their gambling can be monitored and taxed, and, importantly, their rights protected.
The Commission appears to be clumsily stumbling in the same footsteps as German and Dutch regulators, and Britain may well see the same pattern of rising illegal play. The UKGC has yet to explain why it has failed to heed the warnings from across Europe.
Danger to players
If legitimate casinos lose their appeal as a result of overregulation, illegal, unlicensed casinos become more attractive to players. Illegal sites allow for higher stakes and fewer restrictions with no invasive background checks.
Aside from the economic disadvantages of players using illegal sites, there are many disadvantages to the players themselves.
Because these slot sites aren’t answerable to British regulators and law, nothing can be done to protect players when things go wrong. UK consumer protection law cannot be applied in these situations, and unlicensed casinos are not bound by fairness regulations.
Illegal sites often offer no safer gambling tools, placing the player at increased risk of gambling-related harm. There’s often nothing in place to protect players’ data or funds, and in some cases at-risk players have been bombarded with aggressive marketing materials, in an effort to exploit their vulnerability.
All but powerless...
Unfortunately, because of jurisdictional limitations, the Gambling Commission and law enforcement agencies are all but powerless against illegal offshore casinos. For this reason, preventative measures are vital, and the Commission must avoid losing players to the black market at all costs.
The UKGC needs to consider alternatives, or less restrictive versions of affordability checks, stake limits, and other impositions on players. While these measures are well-intended their execution has been heavy-handed and reckless. Perhaps greater emphasis on safer gambling tools within a broader player education initiative would be a less oppressive way to address problem gambling.
Industry and wider impact
On a national level, an exodus of players to the black market would drastically damage the British gambling industry. Because of the ever-tightening nature of gambling regulation, it’s hard to imagine a situation in which this damage would be reversible. Once players are lost to the black market, it’s likely to be difficult to win them back.
Economic impact
The UK gambling industry is not only a significant contributor to HMRC collections, it provides more than 100,000 jobs. The loss of a significant number of these jobs, and the revenue they generate, must be avoided.
Online slots alone contribute £3.6 billion to the gambling sector every year, more than half of overall gambling revenue. This figure will surely be reduced by stake limits.
Reactions from in and around the industry have been varied. Some anti-gambling organisations consider the introduction of stake limits a victory, but this perspective is likely to be fatally short-sighted. ‘Be careful what you wish for’ goes the old saying.
There are even some critics who feel that the stake limits don’t go far enough, and argue that the £5 limit for older adults (25+) should also be brought down to £2.
Those in opposition continue to cite the patterns seen elsewhere in Europe, although the ball is now rolling and it’s likely that their warnings will fall on deaf ears.
Another clanger?
Affordability checks have already caused a stir in the world of horse racing, with them being blamed for drastically reduced annual turnover.
A recent YouGov poll conducted by the Betting and Gaming Council found that affordability checks were opposed by 58% of gamblers. Even so, apparently disregarding the potential consequences, the UKGC went ahead with them.
Why ignore the warnings?
At this point, it’s not clear why the UKGC has ignored the warnings about both affordability checks and maximum stakes. Perhaps it doesn’t want to appear weak by watering down the regulations proposed in the White Paper? However, by failing to react, it is likely to ultimately draw greater criticism.
It’s hard to imagine the state of the industry in a year or two. It’s likely that some players will have abandoned the legal market altogether. If the situations in the Netherlands or Germany are anything to go by, we may see reduced government revenues, increased levels of gambling-related harm, and a withering gambling industry.
Balance?
The UKGC often stresses the importance of striking a balance between player safety and maintaining a viable industry. However, in a few short months, the regulator has demonstrated an inability to do this.
Summary
Stake limits are coming into play over the next couple of months, set at £2 for under-25s and £5 for those aged 25 and over. Despite criticisms, warnings and a player backlash, the Commission has pushed on.
The potential consequences of this approach to regulation include players flocking to illegal sites in droves. The consequences of this, in turn, are profound on both personal and national levels.
The UKGC’s approach to both affordability checks and stake limits has been bafflingly short-sighted, to the degree that it’s hard to understand their actions. When it all really hits the fan, the Commission will be unable to redirect blame; there were more than enough warnings.