Lower stakes for online slots in the UK?

The UK gambling scene is often a difficult industry to comprehend – especially when it comes to the rules surrounding maximum stake sizes. For example, if you were to play a classic pub fruit machine, you would be capped to just £1 per spin. In the case of a FOBT (fixed-odds betting terminals) machine, B3 slot games are capped at £2 per spin. This, it would seem, promotes responsible gambling. However, by making the simple transition over the online gambling space, slot stakes are amplified by some distance. In fact, some slot games allow you to stake a staggering £500 per spin. Effectively, this means that by spinning the reels unsuccessfully just 10 times, you could be £5,000 in the red.

There is an ever-growing case being made by gambling harm groups for online slot stakes to be reduced. This includes the UK’s Gambling Related Harm All-Party Parliamentary Group (GRH APPG) – which recently brought a £2 stake limit proposal to the table. Keen to find out more about lower stakes slots regulations in the online gambling space? Be sure to read on. 

What is the current state of play?

Before we delve into the future of lower stakes slots in the UK space, it is highly relevant to explore the current state of play. In a nutshell, online gambling sites regulated in the UK are not bound by maximum stake sizes. On the contrary, online slot machine limits are typically dictated by the underlying software provider. 

For those unaware, casinos do not create the slot games that they host. Instead, regulated developers design and build slot games, and then license them to operators. The developer will also stipulate minimum and maximum stake sizes, which can vary quite considerably depending on the game. Software providers such as NetEnt are known to launch games with a much higher stake limit threshold.

Nevertheless, we have come across a number of online slot games with a maximum stake of £500 per spin. This is a significant amount of money to be gambling, not least because it wouldn’t take long before you are thousands of pounds in the red. While this might not affect an individual player that has the financial means to wager such a large amount, this can be highly detrimental to vulnerable gamblers. 

This is why campaign groups such as the GRH APPG are looking to mirror the regulations found in the offline gambling space. 

Offline vs Online: Why the disparity?

As we briefly mentioned earlier, lower stakes slots are the norm in the offline gambling space. In fact, UK legislation caps the maximum spin size by some distance. For example, pub fruit machines are still limited to just £1 per spin. If you were to play a FOBT slot game in a high street betting shop, you would be capped to £2 per spin

As such, it is somewhat surprising that these protections do not exist in the online arena. When you take into account the fact that it rarely takes more than 2 minutes to open an online betting account, problem gamblers could be wagering up to £500 per spin in no time at all. 

Will the stakes be lower in the UK online gambling space?

Gambling harm groups are not a new phenomenon in the UK. In fact, one of the main objectives of the Gambling Act 2005 – the main piece of legislation that governs the UK gambling industry, was to protect vulnerable players. This not only includes players that are gambling more than they can afford to lose, but those below the legal age of 18.

So that beggars the question – will campaign groups such as the GRH APPG be successful in their question to lower online slot machine stakes? Well, before we look at what the GRH APPG is actually aiming for, it’s crucial to discuss the recent FOBT stake saga that dominated gambling-related politics for the best part of three years.  

lower stakes fobt

FOBT stakes lowered in response to wide-spread pressure

FOBTs were big business for the high street bookmaker space. For those that are unfamiliar with FOBTs, they are virtual gaming machines hosted in betting shops. The machines are completely self-serviced, meaning that you are not required to communicate with a member of staff to place a bet. Instead, you simply insert physical cash directly into the terminal.

FOBTs contain a number of virtual betting games, including a reasonably large suite of slot titles. However, the vast majority of FOBT gameplay mainly centered on roulette. Machines allowed you to bet up to £100 per spin, with each game lasting just 20 seconds. As such, players could gamble up to £300 per minute – which is a significant amount of money.

As such, FOBTs attracted wide-spread attention from campaign groups and concerned MPs alike, not least because they were fueling large-scale gambling harm. Stories of players committing crimes to fund their FOBT addiction were becoming more and more common, so it was only a matter of time before the government had to step in. 

Step in they did, with Parliament eventually caving into the demands of anti-harm groups like Campaign for Fairer Gambling (CFFG) – who argued for many years that the stakes should be lowered to just £2 per spin. The lower stake rules came into place in 2018, meaning that the only avenue for high limit slot players is the online space. 

Will online slot stakes be reduced to £2?

In the case of the GRH APPG, the anti-harm group is campaigning to reduce online slot stakes to just £2 per spin. Whether or not the GRH APPG will be successful is highly debatable. 

On the one hand, it is important to note that the online gambling space is now a multi-billion pound industry. From the perspective of the UK Treasury, this represents a significant amount of taxable income for key public services. 

In fact, the UK government recently increased the tax rate for online operators from 15% to 21%. As such, the Treasury will be reluctant to pull the plug in an industry that contributes millions of pounds in annual tax revenues. This is especially the case in the build-up to Brexit. With there being no knowing how the UK economy will react to its eventual departure from the European Union, some would argue that the GRH APPG will have little success.

However, it is fundamental to look at the outcome of the prolonged debate on FOBT stakes. Although the UK Treasury resisted the urge to give into anti-harm campaign groups for as long as it could, it eventually gave in. This was somewhat surprising when you consider the reduction in taxation and loss of jobs that betting shops warned of.

With that said, it’s not just a reduction in slot stake sizes that the GRH APPG is seeking. On the contrary, the cross-party group is looking for a number of additional safeguards to protect vulnerable players. 

The online UK slot space could be set for a major sea-change

The GRH APPG is seeking the following reforms in the online UK gambling industry:

Credit Cards

First and foremost, the use of credit cards in the online slot space could be under threat. Since the birth of online gambling in the UK, players have always had the option of depositing funds with either a debit or credit card. 

The latter is somewhat problematic for vulnerable individuals, not least because players can gamble more than they can afford to lose. It’s all good and well depositing funds with a credit card when the urge arises, but what happens at the end of the month when the issuer sends its statement? The answer is simple – financial difficulties.  

When it comes to paying interest, players are often unaware that credit card companies classify gambling transactions as a cash advance. This means two things. Firstly, credit card deposits will attract a cash advance fee, which is typically 3% of the transaction amount. Secondly, the interest is always applied instantly on a cash advance, which can be crippling if the issuer specializes in bad credit profile.

Ultimately, regardless of the stake sizes, gambling is no longer recreational if players are depositing more than they can afford.

Affordability Checks

This particular demand of the GRH APPG is arguably the most draconian, albeit, it’s potentially necessary. In a nutshell, the cross-parliamentary group is looking to install legislation that would force online gambling companies to assess whether or not the player can afford to gamble, and if so, how much they can afford to stake.

It remains to be seen how online gambling sites can achieve this, especially when you consider that such a process is alien in the offline space. For example, land-based casinos do not evaluate affordability levels when players enter the premise, nor do betting shops. 

Although operators are still required to ask questions when players gamble significant amounts (both with respect to gambling addiction and anti-money laundering), this doesn’t relate to affordability per-say. Crucially, if the GRH APPG is successful in its quest to enforce affordability checks, players might be restricted to lower stakes slots if they are deemed to be on a low income.

 

No More VIP Accounts

It will come as no surprise to learn that online slots sites treat high-stakes players like VIPs. After all, this particular demographic is where casinos make the most money. In order to attract high-staked players to their platform, online slot sites will offer lucrative VIP accounts to eligible players. 

This typically includes a dedicated account manager, priority withdrawals, and enhanced house-edges. Most importantly, a VIP account increases the amount of money that such players can gamble.

However, the GRH APPG is looking to place vast restrictions on the availability of VIP accounts. The group argues that such accounts promote irresponsible gambling, not least because casinos are rewarding players for betting obscene amounts of money. 

How will lower stakes impact slot players?

It remains to be seen whether or not laws on lower stakes slots will eventually be brought into UK legislation. If it is, this could have a highly detrimental effect on seasoned slot players. 

Firstly, running an online casino is not a cheap exercise in the UK. One of the overarching reasons for this is that the industry is heavily regulated by the Gambling Commission. Whether it’s a requirement to host anti-money laundering departments or the new 21% tax – profit margins are getting thinner and thinner for UK operators. 

As such, were online slot players restricted to a maximum stake of just £2 per spin, operators would somehow need to replace the lost revenue. As is the case in most industry sectors, it’s plausible that this will need to be passed on to the end-user. The most practical way for online slot sites to do this is to increase the house-edge in their favor. 

This means that your long-term chances of winning will be reduced even further and thus – it could make online slot games unviable. Although online operators fully recognize the impact that an increased house-edge could have for its player acquisition levels, it might be left with little choice is stakes are reduced to £2. 

In Conslusion

Gambling harm in the UK is a serious talking point. On the one hand, it is important that regulations are in place to ensure that vulnerable players are protected from losses that they cannot afford. Although problem gamblers make-up a minute percentage of the wider online slots space, they should still be protected nonetheless. 

However, some would argue that a stake reduction to just £2 per spin could be more costly in the long-run. Not only will online casinos be forced to pass these restrictions on to players in the form of an increased house-edge, but the government will need to replace the shortfall in taxation. 

With that being said, a sensible solution to the ever-growing debate of reducing online slots stakes it to find some middle ground. In other words, instead of reducing the stakes per-say, online casinos should be forced to increase player protections in other areas. This could follow some of the objectives outlined by the GRH APPG – such as a restriction on credit card deposits, affordability checks, and an alleviation of VIP accounts. 

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