The case against online loss-limits  

Last week’s TV barrage of anti-gambling messaging (headlined by Panorama and Ross Kemp) thrust the topic of loss-limits for online gambling into the public debate. Alun Bowden made the case on EGR last week for some of the potential benefits, so just how likely is that outcome?

Ed Ware, CEO of 32Red from 2002 until the company’s sale to Kindred Group in 2017, would lay “pretty short odds” that online gambling is now the government’s main target. “I believe most in the sector would agree it is inevitable that online gaming will be brought into sharper focus now that the long-running FOBT issue has been settled,” Ware says. “The shift in political attitude and engagement is painfully clear for UK remote gambling operators – from the heady days of 2005 to today’s regime where there is a clear agenda for, and very little pushback against, those minded to restrict, curb or even ban this type of gambling.”

The last #RossKempLivingWith of the series is on @ITV on Thursday at 7.30. This week we are looking at online gambling and the impact it has. Hope you can watch pic.twitter.com/jPjOluj4oO

— Ross Kemp (@RossKemp) August 13, 2019

After visiting a random selection of UK-licensed online casinos, EGR Compliance found RNG-powered table games with maximum stakes per round running into four figures, usually between the £1,000 and £3,000 mark. Within the live casino tabs, table limits advertised at £5,000 and £10,000 per hand or spin are fairly ubiquitous. And at a few VIP tables, high rollers can put down bets of £20,000 at a time.

Leading live casino supplier Evolution Gaming allows clients to set their own limits for its Salon Privé tables, where players must meet a minimum bankroll threshold to play. Evolution says limits for live casino vary depending on the game and the market, although some clients offer “very low limits”. However, Ware suggests high rollers are “part and parcel of every successful casino” and says that during his time at 32Red there were plenty of players betting in the thousands.

For some, including politicians, it may seem like eye-watering limits for betting on a PC or smartphone. Furthermore, they may question why gamblers can now bet just £2 per spin on an FOBT but gamble thousands of pounds at a time online. Yet Sam Brown, an online gaming consultant who has previously worked for Betfair, Ladbrokes, Betsson and, most recently, as CEO of online casino Rolla, says unmonitored high-stakes online gambling is a fallacy. “On the face of it, offering customers £10,000 stakes looks high – perhaps even reckless – but you have to understand what happens behind the scenes for a player to make such bets.

“You cannot simply register online, deposit £100,000 and hit the roulette tables. Players playing online at these stakes in the UK will have gone through rigorous internal checks, both self-imposed and regulator-imposed checks, to ensure the player can responsibly enjoy bets at these stakes.” Indeed, online operators hold far more information on a player compared to a situation where an anonymous customer enters a betting shop and feeds £1,000 in cash into an FOBT. Online, operators will have registration details, often including documents for source of wealth checks, and can track playing patterns to identify problem gambling behaviours.

Land-based customers are not subject to the same identity checks as online customers

It’s also important to note that staking is all relative, of course; a wealthy individual betting £1,000 per spin online could be gambling well within his or her means, while another customer staking £100 could be playing recklessly. This is why setting player table limits based on affordability checks and playing patterns seems a more practical solution.

Brown, who insists player protection tools are “much more intelligent than blanket stake reductions”, says: “I don’t believe the government would take such blanket measures online, but it’s not out of the question that in the future they require online operators to set stake parameters based on customer affordability. For example, a player depositing £200 might see different stake limits to a player depositing £2,000.”

Challenging times

Right now, UK-licensed online operators are battling fierce regulatory headwinds. As well as a hike in remote gaming duty from 15% to 21%, operators are forced to undertake more stringent checks on customers’ source of funds, which has put a hefty dent in VIP revenues for many operators. They are also having to get on top of problem gambling and combat money laundering to avoid potentially multimillion-pound fines from the GC or, much worse still, have their licences revoked.

So, any stake reductions to online casino gaming would be a hammer blow, not to mention a double whammy for the major UK operators with a high-street presence: Ladbrokes Coral, William Hill, Betfred and Paddy Power. But it would ultimately prove to be a futile regulatory move, according to Wes Himes, interim chief executive of the Remote Gambling Association. “A stake and prize limit would be ineffective in an environment where a customer could simply move to an unregulated site, an outcome no-one wants in terms of protecting customers.

“Therefore, the industry is researching and developing new initiatives to allow customers to reduce or block spending but also looking at operator-led tools to trigger intervention earlier in the stage of a customer’s journey.” While Himes acknowledges that four- and five-figure limits “would look high to anyone viewing from the outside”, he stresses the need to study the evidence on the harm this creates before, as he puts it, “jumping to blunt public policy solutions”.

Wes Himes

Himes adds: “The industry has a responsibility to guide and manage player behaviour and it is around this area that new innovations are being developed, whether it is offering customers the ability to block gambling spend via their debit and credit cards, looking at affordability in relation to at-risk gambling, or new methods of data analysis which allow operator intervention much earlier in the journey. These will drive a safer gambling agenda.”

The challenge for the embattled sector is to introduce these initiatives as quickly as possible amid the mounting scrutiny and pressure from almost all sides. Most would agree the GC requiring operators to implement a more rigorous registration process, besides thorough source of funds checks, is a positive step. Yet a blanket ceiling for online stake limits set at an arbitrary figure appears an unworkable move in an already tightly regulated space like egaming.

After all, Ware warns, those high rollers will tend to seek out ways to gamble at their preferred stakes. “Unlike in the bricks-and-mortar casino where a customer is able to significantly increase their staking once through registration, online customers wishing to bet big having managed to be age-verified, proved they have the wealth to bet and had their inside leg measurement taken may be disappointed with £5 per spin in the future.” He concludes: “This demand will look elsewhere for its high stakes casino entertainment.”