Australian think tank suggests mandatory loss limits of A$500 a month

An Australian think tank has called for the introduction of “mandatory maximum” loss limits in the market to act as a “seatbelt” for consumers potentially at risk of recording “catastrophic losses”.

The Grattan Institute’s ‘A Better Bet’ report has suggested loss limits, established by the federal government, would ensure consumers in Australia would no longer lose more than they can afford.

The think tank’s recommendations include loss caps at a daily, monthly and annual limit for both online gambling and land-based pokies throughout the country, with every customer having to choose a limit before playing.

Based on Tasmania’s pre-commitment scheme, which is already in place, the Grattan Institute has pushed a regulated upper loss limit of A$100 (£51.10) a day, A$500 a month and A$5,000 a year.

However, the body did concede that players should be able increase their limits, but with a 24-hour delay and subject to an affordability check. Conversely, users would be able to lower their cap with immediate effect.

The authors of the report also suggested the measure could be implemented via Australia’s self-exclusion register, BetStop, which launched last year.

The report read: “Under the BetStop system, all online and phone gambling providers licensed in Australia must verify customers’ identities, and check that they are not on the self-exclusion register, before they can place a bet.

“This system could be extended to support mandatory pre-commitment for all customers. Providers would need to verify customers’ chosen limits – in the same way they currently verify customer identity – and not allow losses beyond those limits.”

For pokies-based gambling, the Grattan Institute said the responsibility would lie with state governments while proposing that a universal model, encompassing online and land-based gambling, should be explored.

Furthering the case for loss limits to be set in advance, the authors said this would help stop players chasing their losses while the mandatory factor would be key to its success.

The report continued: “Mandatory schemes – where limit setting is required of all players – are much more effective in preventing harm than voluntary schemes – where customers can opt in and out (including after hitting their chosen limit).

“Many studies have found voluntary schemes to be ineffective in limiting losses, largely because people opt out even when prompted.”

The think tank did note there would be downsides to implementing mandatory loss limits, which it referred to as a “minor inconvenience” as it is of the opinion the majority of Australian bettors would not reach the suggested limits.

The report added: “The downside of a mandatory scheme is that it applies to many people who won’t ‘need’ it. But it is not a major imposition.

“Pre-commitment doesn’t require much more time or effort than identity verification (which is already required for online betting). Most people spend very little so would be unlikely to ever hit the maximum limits anyway.”

The radically conservative suggestions from the Grattan Institute come after the think tank cited data from H2 Gambling Capital that the average gambling loss per adult in Australia sits at A$1,635 a year.

That figure, based on 2022 data, puts Australian losses per capita ahead of the US (A$809), Ireland (A$892) and Hong Kong (A$1,284).

The Grattan Institute also highlighted Germany, Norway, Sweden and Belgium as markets where mandatory pre-commitment systems have been implemented to “show it can be done and offer lessons for Australia”.

Germany put a €1,000 a month deposit limit in place in 2021, which has been slammed by critics as playing a role in the spike of black-market growth in the market.

State-owned platforms in Norway have limits, but it is also a market where the black market is on the rise, while Sweden’s pandemic-induced deposit limits were praised in the report.

And while Belgium was cited as a success story, Golden Place Casino Sports CEO Massimo Menegalli told EGR this year that deposit limits will drive people to the black market.

He said: “They will go the opposite way they wanted to. For the moment, the channelisation in Belgium is more than 75% and I’m sure that will decrease.”

The Grattan Institute report’s opening preamble read: “Many people enjoy gambling without suffering harm. But it is all too easy to lose too much; these products have features that keep people coming back even when they are at risk of harm.

“That’s why gambling is strictly controlled in a number of countries. Australia has taken a lax approach to regulating gambling, and it shows.

“We have the highest losses in the world. People who gamble, their families and the broader community pay the price in their finances, health and wellbeing.”