Should Gambling Sites Have Fixed Deposit Limits?
There has been a lot of talk recently over the United Kingdom’s gambling scene. Over the years since Tony Blair’s Labour government introduced the Gambling Act 2005, it has been blamed for a number of negative outcomes. Many have suggested that it has caused an increased in gambling addiction, as well as a lot of regulatory confusion. That blame came primarily from gambling bosses and religious groups. However, as things have progressed, the government has also seen the failings of the Gambling Act as well. And it is this that has led to changes being proposed.
In the end, it was decided that the Gambling Act of 2005 is not in line with today’s much more digital age of gambling. Therefore, the entirety of the UK’s regulatory laws surrounding gambling are being reviewed, and it is expected that new legislation will be introduced by early next year, if not the end of 2021. This has led to many questioning what the new rules will be and how they will affect the industry overall. And some operators have actually taken the decision to enact new restrictions on their sites already, as a way of streamlining the regulations already in place.
One such change has been announced by Paddy Power and Betfair, which has introduced a rule that will cap the losses for under 25s at £500 per month. Backing up its decision to do this, the company said that around 35,000 people in this age bracket had lost more than the limit over recent months. However, if a player can prove they can afford to lose more, then the restrictions will be lifted. For now, those restrictions will only affect under 25s, whereas anyone over that age will not have such a cap to consider for the time being.
Flutter Leads the Way with Restrictions
The Paddy Power and Betfair brands are owned by Flutter, previously known as Flutter Entertainment. And it is down to this operator that the limit on the amount that young gamblers can lose has been introduced. The decision to do this was described as a way of curbing the increased levels of addiction within the industry. Operating as the country’s biggest online gambling company, Flutter announced in early September that only those who are under the age of 25 will be restricted by a £500 cap on their losses per month.
While it did note that there may be a small number of people in this bracket that can afford to lose more than the £500, those players will need to provide proof of this. That will take place through what Flutter described as a ‘detailed process’, which will check into their finances. If they qualify, then the limits will be increased.
It may seem as though Flutter is trying to get on top of things prior to the introduction of new rules by the Government, but critics have derided the operator’s decision. According to some, the new policy has what they described as “the whiff of self-preservation”. Furthermore, the limit remains above the £450 that the Gambling Commission claims most gamblers can afford to lose.
As it happens, the top gambling addiction expert working for the NHS, Henrietta Bowden-Jones mentioned that Flutter’s decision on this policy is not something that should be applauded. “Even £100-a-month losses would be disastrous”, she said, negating the idea of self-regulation by industry.
And even though the director of NGO Clean Up Gambling, Matt Zarb-Cousin welcomed the decision of a large operator to recognise the need for limits to be introduced, he mentioned that most people in general cannot afford £500-a-month, let alone the under 25 age group. He went on to point out that the limit should be fixed at £100 per month, and if a player wants to increase this, then a set of proper affordability checks should be done beforehand.
However, Flutter backed up its decision on introducing the £500 cap, saying that over ¾ of its regular players supported the introduction of the new policy. It said that the net deposit limit for all customers under 25 would be set at £500 per month, and that this is being brought into place across its Paddy Power, Betfair and Sky Betting & Gaming platforms. This, Flutter said, is all part of its Affordability Triple Step framework, and this leverages real-time data so as to monitor player activity and behaviours. That framework was announced by the company back in February of 2021.
Alongside the decision to implement the new deposit limits for under 25s, the Flutter operator has employed Adtech to avoid targeting this age group with ‘paid for’ social media marketing. At the same time, gambling advertisements displayed through search engines should provide clarity on the targeting of over 18s.
Is £500 Appropriate? Should Sites Set Their Own Limits?
Flutter may have taken the first step towards deposit limits before any other operator, but can it be said that it has made a good first move? Well, according to several people, not really. Even the Gambling Commission noted that people across the United Kingdom on average can afford to lose up to £450, but even that is a stretch. For someone under the age of 25, the cap of £500 is not really something that stands out as being ultimately fantastic.
And why are under 25s the sole group being targeted by Flutter’s new policy? Perhaps that age group does lose more on average than those in other age groups, but should it not be a policy that caps deposits and losses for everyone who is a registered user? Well, Flutter is not likely to do that, because it potentially knows that those with more money are players over 25. Therefore, they stand to deposit and play more, as well as lose more at Paddy Power, Betfair and so on. This means, in the end, Flutter is not likely to lose out on much when it comes to its own income.
Figures from 2020 show that 48.4% of respondents to a poll by Statista are between the age of 45 and 54. This makes it the age bracket with the highest share of gambling participants for that year. And overall gambling participation was highest amongst those people between the ages of 35 to 64. Additional studies show that the highest share of people gambling between 2016 and 2020 in the United Kingdom has often been the 35–44-year-olds. Why should a policy targeting those under 25, which is one of the lowest participation brackets over that same time period, have much of an effect?
If Flutter was really looking to tackle gambling addiction in an effective enough way, then it would either target the highest demographic of gamblers or, in a much more effective way, place restrictions on all age groups. Furthermore, it would lower the limit to £100, as suggested by Mr Zarb-Cousin of the Clean Up Gambling organisation.
What A £100 Affordability Limit Could Mean?
At the beginning of November in 2020, the UK Gambling Commission launched its own consultation, seeking out feedback from industry members and consumers on a set of new measures. That was set to last for 10 weeks, coming to an end in February of this year. As part of that consultation, people would be able to provide their own insight into the introduction of a £100 per month affordability threshold. And that would be applied to all players at online betting sites throughout the UK.
That limit was doubtless quite the concern for operators upon it first being suggested. However, some people argued that it could actually see the industry avoid even tougher restrictions later on down the line. The Commission mentioned that the country’s current thresholds for customer protection action are actually too high to have any kind of effect on gambling harm. Therefore, it said that operators needed to come together and have specific regulations in place that would ensure everyone falls in line with new limitations.
The Gambling Commission did its own research prior to introducing the £100 threshold idea for consultation. Through that research, it discovered that 50% of the country’s population has a £250 per month spend after all other monthly bills have been paid. It also mentioned that other spend, such as travel, sport, leisure and so on must be considered. And this is how it came to the conclusion of a £100 spending limit for online gambling.
Naturally, operators would likely be sweating bullets if such a limitation were introduced in the UK. However, this is not how it would work. The £100 per week spending limit is something that would be in place before any action is taken to determine whether a customer is at risk. Once a player is deemed to not be at risk of addiction, it would likely be the case that their limit could be increased. Furthermore, the £100 figure is the lowest limit that the Commission is considering, so that’s simply what can be determined as a worst-case scenario for the industry. At the same time, that would likely be a loss limit, rather than a deposit limit. So, players could still deposit £500, £600 etc. into their accounts, as long as they didn’t lose more than £100 or any other limit set by the regulatory body.
In theory then, this kind of limit would really only be detrimental to operator efforts, rather than revenue. Why? Because the operators would need to employ more people to ensure that the customer protection levels are being met. More frequent customer contact would be required for this, but if the result from it is a higher level of responsible gambling, then this is no bad thing for the industry.
Of course, there is also the possibility that some players would leave the online sphere if they have a balance that is much more than the discretionary £250 marked out by the Commission. Being asked for proof of funds after reaching a £100 spend on a bet is potentially not something that someone with a lot of money would like to endure. Of course, there will always be people who are not happy with such changes, with some claiming that it is a threat to civil liberties in the UK.
Was Flutter Right To Take The Bull By The Horns?
Has Flutter done the right thing in introducing a £500 limit for under 25s registered at the three sites mentioned? Well, it can be considered that potentially its intentions were good, but that it hasn’t really gone about it in an ideal way. Its restrictions have their own restrictions, and it could be suggested that some people may not feel happy about being singled out. Someone who is 24 and has a better financial income than someone who is 25 will have to prove that they can afford to bet, while the 25-year-old won’t?
Plus, the fact that this age group is not specifically one that participates in gambling as often as those in the 35-44 bracket doesn’t seem to make sense. Flutter may look like it is doing the right thing on the outside, but when you get deeper into things, it looks more like a ploy for favouritism, so to speak. If the UK Gambling Commission introduces a lower limit in any case, Flutter will still have to comply with this, so why would it not just have a £200 limit for everyone registered to its site from the get-go? Targeting the under 25s category does not specifically mean that a positive impact where gambling addiction is concerned will be experienced.
There is no evidence to suggest that the under 25s are more at risk from suffering from gambling problems than any other age group. Anyone can be affected by it, and players of different ages have been. If you’re going to introduce restrictions, then these should be introduced across the age groups, and not just for one specific category. Should it be introduced at a level of £100? Well, that is something else that should be studied at a close level. Affordability checks should certainly still be done, and if this has to be done at a limit of £100, then so be it. Some players may not enjoy this or be happy about having to prove their financial status, but if the result is a safer gambling environment, isn’t this better?