Will We See Betting Losses Limited in the Future?

Posted by Harry Kane on Wednesday, April 4, 2018

There’s no doubt about it; the gambling industry is coming under increased scrutiny from the government and the UK regulator. While much of this has been aimed at the offline sector, online brands are also under growing pressure to review their operations and ensure that they deliver a fair and compliant experience to gamblers.

One of the most recent claims has come from former Paddy Power chief executive Stewart Kenny, who has called for the industry to limit the exact amount that individual players are able to lose online.

This would represent a radical step, but one that appears increasingly likely in the current regulatory climate. In this article, we’ll discuss this in further detail, and ask whether we’ll really see betting losses limited online in the future.

Why Betting Loss Limits May Be on the Way

At present, there is little to minimise the amount that individuals gamble online in any given gaming session. So while new and existing customer promotions will always govern eligibility with a maximum betting threshold (and each individual game will stipulate minimum and maximum stakes), there is currently nothing to stop players accessing alternative titles and gambling as much as they like through a single, online casino.

Herein lies the issue, and one that is becoming increasingly troublesome for the UK Gambling Commission. After all all, the regulator released some telling (and in some respects, damning) statistics during the final quarter of 2017, one of which revealed that an estimated 2 million people in the UK are at rise of developing a gambling addiction. Overall, 0.8% of the UK population is categorised as problem gamblers, with a worrying proportion of this demographic considered to be 16 or under.

At the same time, the UKGC confirmed that the British public is fast losing trust in the gambling industry, both in terms of fairness and transparency. Now, some of this can be attributed to a wider lose of trust between consumers and big brands, with just 36% of citizens claiming that they trust large corporations to do what is right. Still, just 34% the population consider the gambling industry in the UK to be fair and trustworthy, in comparison with 49% back in 2008.

There’s a clear link between these statistics and the rise of online gambling, but regardless of this the UKGC has been compelled to act in conjunction with the UK government.

As a result of these issues, the UKGC has unveiled a five-point strategy that will be implemented over the course of the next three years. The key elements of this will be the protection of customer interests and potential problem gamblers, along with a desire to raise the standards within the UK gambling market and its perception in the eyes of consumers. To achieve these aims, the UKGC has pledged to implement more stringent regulatory measures across the board, while also promising to optimise the amount of cash generated for good causes through lotteries.

This makes more radical and progressive regulations such as the implementation of betting loss limits increasingly likely, as they would automatically help to safeguard potential problem gamblers and create an industry that is far more likely to be well-received by consumers.

Will the FOBT Crackdown Set a Precedent in the Market?

If we need further evidence that betting loss limits could be on the way, we need only glance sideways to the offline sector of the market. After all, the aforementioned Stewart Kenny and other sources in the gambling sector have compared some virtual casino games to the controversial fixed-odds betting terminals (FOBTs), which exist in land-based betting shops and are currently facing a huge clampdown across the length and breadth of the UK.

Having been made a key target by regulators and the department for Digital, Culture Media and Sport (DCMS), bookmakers are now facing up to the very real possibility that the betting limit of FOBTs will be capped at just £2. This would represent a huge decline from the current threshold of £100, which enables players to gamble a maximum of £300 per minute while playing these machines. Given that FOBTs generated spending of £1.7 billion last year and accounted more than half of bookmaker profits during this time, this would have a profound effect on the industry and set a radical precedent for the new standards that the marketplace is hoping to achieve.

Make no mistake; this precedent would transcend the offline sector of the market and set brand new regulatory standards in the online industry too.

With this in mind, betting loss limits could well be one of the first measures to be implemented online. After all, it’s hard to ignore the similarities between FOBTs and online games, as both currently enable players to gamble freely and place minimal limits on how much can be lost during each gaming session. Similarly, some online games (think of high variance slot titles, for example) allow players to lose large amounts within a short space of time, regardless of their account history or observed gambling tendencies.

Given this and the current regulatory climate, Kenny’s seemingly fanciful notion of setting mandatory limits on deposits and introducing a cooling-off period before caps could be changes is now something that should be taken seriously. It would certainly limit the amount of cash lost by individual players, while enabling the UKGC and its operators to fully embrace the concept of responsible gaming in the digital age.

When and How Will the Caps Be Enforced?

Ultimately, the clampdown of FOBT’s in the UK (they’re already banned in Ireland), makes it almost certain that regulators will eventually implement betting loss limits online. This would also have a similar impact on the industry, particularly given the profitability of online (and particularly high stakes games).

The most obvious measure will be to cap single deposits, while regulators could also move to minimise the limits associated with high stakes games. The idea of implementing a cooling-off period to prevent players from chasing losses will also be considered, although the length of this will remain open to debate.

Over time, the swathes of player data captured by online operators could also be used to set individual caps, based on behaviour and betting history. This would undoubtedly reduce some of the lost profits facing operators, although its likely that regulators will implement fixed and mandatory caps in the near-term.