Which Demographic is Most Likely to Include Problem Gamblers?

Posted by Harry Kane on Friday, March 8, 2024

When the UK Gambling Commission (UKGC) first unveiled its report into VIP gambling at the beginning of 2020, it revealed that the market’s leading firms were incredibly reliant on high-stakes players. Although measures laid out in the recent iGaming review will tackle this to some degree, it still raises issues about the nature of problem gambling in the UK.

This report suggests that high rollers are most at risk of becoming problem gamblers, while this is further supported by various studies. But could other, less wealthy bettors be more vulnerable to the pitfalls of problem gambling, and does the recent white paper help to safeguard these individuals?

Addressing the Numbers – Which Demographic is Most at Risk of Problem Gambling?

A report commissioned by the UKGC in 2020 found that the gambling industry was incredibly reliant on high rollers and VIPs. Analysis of individual brands found that one operator had taken 83% of its total deposits from just 2% of customers, all of which participate in variable levels of the available VIP scheme.

A rival brand boasted a VIP customer base of 5%, which accounted for 58% of its total deposits. Another accepted 48% of its cumulative deposits from just 3% of bettors, with this suggesting that high rollers may be more likely to become problem gamblers over time.

These findings prompted further research into the industry. This subsequently revealed that of the estimated 47,000 VIPs active in the UK’s gambling industry, as many as 8% of them could be classed as problem or at least ‘at-risk’ gamblers. This is nearly 11-times higher than the average rate among the general public, which is why the white paper has taken steps to target verticals such as online slots.

This also builds on evidence gathered by the University of Liverpool and the National Centre for Social Research, which found that brands generate approximately 70% of their total revenues from the patrons that lose the most money. Apparently, this percentage increases to 86% in the sports betting niche, where bettors are likely to wager more based on their existing knowledge base or impassioned support for one particular team.

However, sports betting can also unlock much higher odds on average, and this may be more appealing to less well-off players who are in search of life-changing returns (or attempting to recover losses that they cannot afford). Bettors of this type often place long-odds wagers (especially once they’ve developed compulsive gambling behaviours), placing them among the top 5% when it comes to the highest losing accounts.

The same trend is even more evident in offline gambling. After all, it’s well known that betting brands are more likely to build new brick-and-mortar premises in economically deprived areas, with one well-known high street in Birmingham having recently given the green line to construct an eighth betting shop (this has been met with fierce opposition from locals).

This is borne out by the numbers too. It’s estimated that 21% of gambling premises and bookmakers in the UK are based in the most economically deprived decile of areas, compared to a paltry 2% in the least deprived regions. This hints at a clear strategy by operators, while suggesting that less well-off players may also be at higher risk of developing compulsive gambling behaviours.

What Do These Findings Mean in the UK Marketplace?

It’s frustrating that there hasn’t been more studies covering this topic, although it’s fair to say that players at both extremes of spending spectrum are more likely to become problem gamblers. We can also surmise that some verticals are more likely to attract problem gambling and drive significant losses than others, with online slots offering a relevant case in point.

The previous data revealed that slots accounted for more than half of all losses above £5,000. This vertical also accounted for 70% of gaming sessions where players were active for three hours or more, highlighting the immersive nature of slots and their exciting themes.

Even more alarmingly, more than 14,000 UK-based accounts did this at least three times during a single year, creating the potential for sizable losses amongst those who simply cannot afford to sustain them. Remember, slots are also the most accessible iGaming vertical, as they’re complete games of chance that require no skill or experience at all.

This is why the gambling white paper targeted slots heavily, suggesting a £2 betting cap for players aged 25 and under. Players older than this may ultimately see the betting cap slashed to £5, simultaneously protecting non-wealthy problem gamblers and minimising the risk of VIP players developing compulsive behaviours.

Although high rollers could switch their attention to other verticals, they may also be subject to affordability checks when wagering over a specific threshold each month. This would require them to provide evidence of earnings that can sustain their betting activity, and some may not be willing to provide this to gambling brands.

This raises other potential issues, of course, as high rollers may be included to seek out offshore or unlicensed operators on the black market. The same can be said for less wealthy bettors who also want to continue wagering at the same rate, so this is something that the regulator and government will have to monitor in the coming months and weeks.

Ultimately, we can surmise that problem gamblers come from all demographics, although they’re most likely to exist either as high rollers or less wealthy individuals who live in economically deprived areas. These issues have been targeted to some degree by the recent iGaming white paper, but other steps may be required to help safeguard players in the marketplace.