How is the iGaming Market Becoming Safer?
Posted by Harry Kane on Tuesday, February 22, 2022
While most talk and media reporting about the iGaming industry is negative, the scale of problem gambling and its acceleration throughout the UK is often exaggerated. What’s more, not enough credit is given to the steps taken to make online gambling safer and less accessible to problem and underage players down the years, with the UK Gambling Commission (UKGC) having led this charge since 2018. But precisely how has the iGaming market in the UK become safer in recent years? Below, we’ve taken a look at the key changes and how they’ve impacted on virtual gambling on these shores.
Improved Control and Fairness
Back in 2018, the UKGC announced a series of core strategic objectives through 2021, the majority of which were focused on the protection of underage and potentially vulnerable gamblers through the UK. However, the regulator was also committed to improving the reputation surrounding the wider iGaming market in the UK, largely through the provision of improved control and fairness from the perspective of players.
Some of these measures were relatively simple, such as the requirement for all iGaming operators to publish their return-to-player (RTP) rates live on casino websites. The RTP rate refers to the amount of cash that you can expect to recoup for every £1 wagered through a particular game, making it easier for players to manage their bankroll and select titles that suit their overall outlook.
Other measures have been a little more complex and impactful, while creating seismic shifts in terms of how operators manage activity and monetise their core verticals. Here’s a breakdown of the most significant changes:
1. The Separation of Deposit and Bonus Balances
This change in guidelines has largely altered the nature of welcome bonuses, which previously included customers’ deposits as part of underlying wagering requirements. These terms dictate how much you’ll have to play through before withdrawing any associated bonus winnings, while it’s now usually expressed as a multiplier of a new player’s total bonus value.
Historically, however, wagering requirements would commonly be applied to the combined value of a player’s deposit and their bonus funds, effectively placing withdrawal restrictions on their own hard-earned money. For example, let’s say that you qualify for a 100% deposit match up to £50 through this model, with the wagering requirements fixed at 30x the total value of your deposit and bonus funds.
If you deposit £10 and receive £10 with which to play, you subsequently have to play through £600 before making a withdrawal. Not only is access to your deposit funds restricted by such terms, but it also increases the amount you’ll have to play through overall.
This was considered to be a major stumbling block for regulators, who ruled it unfair that operators were able to place restrictions on players who wanted to withdraw their own cash. As a result, they introduced rules that formally separated deposit and bonus balances, ensuring that only the latter could be restricted as part of casino welcome offers.
So, using the same example mentioned above as our reference, it’s only the £10 received in bonus funds that would be subjected to wagering requirements, creating a much lower playthrough amount of £300. As a result of this, you can also now withdraw your deposit at any time, creating far greater control over your bankroll and superior transparency for players overall.
2. Players Can No Longer Wager on Credit
Back in April 2020, the UKGC also moved to ban the use of all credit cards at online casinos registered on these shores. This followed a detailed investigation by the regulator and governmental Department for Digital, Media, Culture and Sport, which made some startling discoveries that informed the eventual decision. For example, of the 10.5 million people who regularly gambled online in the UK in 2019, around 800,000 utilised credit cards to fund their wagers.
While this may seem like a relatively small percentage, further research carried out by the Commission found that 22% of this demographic were categorised as being ‘problem’ or ‘at-risk’ gamblers. This included a large proportion of online casino VIPs, who are typically high-rollers who may have a compulsion and spend outside of their corporeal means.
This explains that while barely more than 7.6% of UK-based online gamblers frequently wagered with a credit card prior to the measure being introduced, approximately 20% of all iGaming bets were placed using credit and borrowed funds.
So, the decision to ban credit cards became a relatively simple one for the Commission to take, especially from the perspective of safeguarding vulnerable online gamblers and enhancing the perception of the industry overall.
Sure, it can be argued that this measure does little to prevent gamblers from taking out short-term loans and using this money to wager through a bank card, but this was an important first step in the quest to stop the practice of gambling using borrowed funds.
3. Verification Processes are More Detailed and Transparent
Previously, online casinos were permitted a total of 72 hours to conduct age verification checks on new players, during which time individuals were free to register for an account, access any bonuses that they were eligible for and wager potentially large sums of cash.
However, the Commission recognised that this created a window in which underage gamblers could register and stake money, with some 14% of 11 to 16 year-olds in the UK having spent their money on gambling during the previous week according to official figures from 2020.
So, last year saw them change the surrounding rules and regulations, effectively closing this window and compelling operators to carry out immediate age verification checks when new customers registered for an account.
This is largely conducted electronically and, in the background, based on the information you provide to a casino and according to the principle of ‘Know Your Customer’ (KYC) protocols. As a result, it’s possible for players to having the age verified instantly through a number of channels, such as the Electoral Roll.
If further proof of identity is required before verification is confirmed, operators will have to request this immediately. What’s more, the player in question won’t be able to deposit or wager funds prior to this process being carried out, affording operators the time to identify underage players.