Gambling Commission contemplates £100 monthly loss limit as call for evidence continues

The UK Gambling Commission (UKGC) is considering monthly loss limits of £100 as it grapples with the issue of affordability before the government’s review of the 2005 Gambling Act.

The regulator has called for evidence from a variety of industry stakeholders on five areas, including the hot topic of affordability thresholds, where it is seeking to strike the correct balance between consumer freedom and privacy, and consumer protection.

“Individuals spending more than they can afford to lose is one of the harms most commonly associated with a gambling disorder, and the harms can be significant even at spending levels which can be seen as low,” said the UKGC.

“The level of spend on gambling at which harms begin to occur will depend on the consumer’s discretionary income. If a consumer can only fund their gambling by using funds that are needed to support necessities, this is unsustainable.

“This call for evidence explores how to strengthen the requirements to minimise this risk, and how to balance consumer freedom and privacy at the same time.”

According to the UKGC, discretionary income is the most relevant way to assess how much consumers have to spend before experiencing harm as a result of their gambling.

Discretionary income is how much cash an individual has left at the end of the month after paying for essentials such as taxes, bills, food and accommodation.

It describes the amount an individual can spend on material items like holidays, clothes and leisure, which include online gambling, before it begins to impact on their core financial responsibilities.

The UKGC has suggested anyone spending their entire discretionary income on gambling would be showing signs of gambling-related harm.

The regulator is now weighing up a range of current and historical data to try and reach an appropriate monthly affordability limit.

For example, operator data analysed by David Forrest and Ian McHale of the University of Liverpool, which was commissioned by GambleAware, showed that 17% of online slots players and 9% of non-slots players finished with monthly losses of more than £100, although this data relates specifically to January 2017.

However, early limited trial data from the industry indicates that, within a given month, approximately 15% of active customers lose more than £150, while 2% lose more than £1,000.

UKGC CEO Neil McArthur

“Our compliance and enforcement teams have reviewed numerous cases where individuals have demonstrated gambling-related harm and yet have been able to continue to gamble without effective action being taken,” said the UKGC.

“Some of these individuals have funded their gambling activity through crime but the majority of cases were customers relying on unsustainable funds such as loans, credit, inheritance, personal injury or redundancy payments.

“Common to all these cases has been the ineffective control frameworks used by the operators to identify and manage the risk.”

In conclusion, the UKGC said it does not consider a discretionary income threshold in excess of £2,000 as either realistic or appropriate, as 98% of the population have less discretionary income than that.

“This may indicate that the lowest possible threshold is likely to be at least £100 loss per calendar month,” said the UKGC, ruling out the prospect of a “licence to gamble”, which would demand pre-emptive affordability checks on all consumers.

The £100 monthly loss limit figure mirrors a recommendation put forward by the Social Market Foundation in an August report authored by Dr James Noyes.

As part of the consultation, the UKGC has requested further evidence across four key areas, as well as affordability.

These are protecting consumers in vulnerable situations, time spent gambling thresholds, preventing marketing and the take-up of bonus offers and impact or unintended consequences.

The call for evidence will run for 10 weeks alongside the consultation and will close on 12 January 2021.