Opinion: Max stake limits are not a black-and-white issue

By Owain Flanders

Last week, the Gambling Related Harm All-Party Parliamentary Group (GRH APPG) called for stake and deposit limits to be set at £2 ($2.60) for online slot games in its interim report.

The report was based on a six-month inquiry, in which the group found no justification for online slot games to have higher stake limits than their land-based counterparts, referring to the £2 limit to land-based fixed-odds betting terminals (FOBTs) introduced earlier this year.

While this might seem like a black-and-white issue for the GRH APPG, the introduction of stake limits is a controversial proposal for those within the industry.

Shortly after the release of the report, I attended an industry event for the launch of Responsible Gambling Week, and as expected it was the subject on everybody’s lips.

During the first panel, John Hagan, Chairman of the Industry Group for Responsible Gambling, broached the issue with the participating executives, and the resulting opinion was unanimous.

They agreed that online stake limits were an unsatisfactory tool for a complex issue, and that in blocking customers from placing their desired stakes, limits could push problem gamblers to unlicensed sites where they are not protected by the same checks and regulations.

Instead, the executives proposed further investment into affordability checks; as Wes Himes, CEO of the Remote Gambling Association, said: "We think affordability is a much more forensic and comprehensive way to approach the issue.

"We are testing various procedures based on our ability to identify customers in relation to their financial position, which will provide a much better case-by-case, person-by-person view on what is affordable for that player."

As Ben Wright, Head of Safer Gambling at Sky Bet, suggested, when there are more sophisticated methods of protection available such as "data-science, affordability or customer education," max stake limits seem like a "blunt tool."

While customer protection is rightfully at the forefront of everyone’s minds on the subject, there is also a distinct lack of dialogue in regards to the effect on profitability when there are viable alternatives to limits.  

GVC Holdings, owner of Ladbrokes Coral, recently announced an 18% drop in its retail revenue for Q3 2019, blaming the decline on the reduction in maximum stakes for FOBTs.

The operator closed 41 of its betting shops during the period, taking the total closed as a result of the Triennial Review to 198. It is estimated that 900 of GVC’s betting shops will be closed over the next two years as a results of the maximum stake cut.

FOBT stake restrictions were a necessary precaution to an unfixable issue, as players do not need to offer verification, proof of affordability or betting history prior to playing land-based machines, but the limits have already led to the closure of hundreds of betting shops across the UK as they struggle for much-needed revenue. I'm certain if there were viable alternative solutions, as there are with online slots, they would have been pursued.

Profitability can often seem like a dirty word in the gambling industry, particularly when there is so much negative media surrounding it, but for cooperation between governing bodies and those within the industry, it is something that needs to be taken into account.

Discussing gambling sponsorship at a sports betting event earlier this year, Conleth Byrne, OnePoint Managing Director, said of the gambling industry: "We live in a strange world where you’re trying to grow your business but you’re not allowed to promote it to anyone."

In this same sense, the effect max stake limits will have on profitability is the unacknowledged elephant in the room. Those within the industry are unable to discuss it, while those outside disregard it.

Limiting online stakes may be the simple solution for the GRH APPG; but it is a strategy that could not only cause further harm to those it is trying to protect, but also alienate those within the industry who are working hard on more effective solutions.

If the GRH APPG really want to combat the issue of problem gambling in the UK, they need to stop treating the issue as black-and-white and instead work towards a resolution that is beneficial to all those involved.

This is something that, through increased affordability checks, responsible gambling tools and customer education, seems more than achievable.


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