DCMS Announced That Maximum Stake Limits for Online Slots Will be Introduced Later This Year

February 27, 2024 | Gaming Machines

United Kingdom (February 23, 2024) — On 23 February 2024, the Department for Culture, Media and Sport (“DCMS”) announced that maximum stake limits for online slots will be introduced later this year.

The DCMS announcement has, of course, been a long time coming. One of the key policy proposals set out in the April 2023 White Paper was the introduction of stake limits for online slots. The White Paper set the groundwork for the DCMS consultation that ran from July to October last year, which invited views on the introduction of stake limits for online slots ranging from £2 per spin to £15 per spin, with a narrower range of £2 per spin to £4 per spin for those aged between 18 to 24. There were 98 responses to the consultation, including from charities, campaign groups and treatment providers, and gambling industry companies. The DCMS states that there “were some clear themes amongst the responses, notably that online slots are a high-risk gambling product and that statutory stake limits are necessary to reduce the risk of gambling-related harm”.

The government has ultimately determined that maximum stake limits for online slots should be introduced at the following levels:

  • £5 maximum stake limit per spin for adults aged 25 and above.
  • £2 maximum stake limit per spin for young adults aged 18 to 24.

With respect to the £5 stake limit, the DCMS response to the consultation states that government believes that “a £5 limit will achieve the government’s stated objectives in a proportionate way, with a lower risk of unintended consequences such as displacement to the illegal online market”. The DCMS also points to data that around 20% of customers currently choose to stake over £5 at least once a year but only 0.6% of all spins are over £5. In addition, setting the maximum stake limit at £5 aligns with stake limits for land-based B1 machines in casinos, which DCMS believes “to be the most comparable land-based gambling environment in terms of risk”.

In relation to the £2 stake limit, the DCMS seeks to justify introducing a lower limit for the 18 to 24 cohort because such approach “aligns with the wider government approach to gambling of targeted and evidence-based interventions for those at risk, while not unduly restricting others”. The consultation response also points to evidence that suggests young adults have the highest average problem gambling score of any age group and generally have lower disposable income, as well as neurological development factors around risk perception and managing money.

In terms of next steps, the DCMS announcement bullishly sets out that “stake limits for online slot games will be introduced for the first time in September…” The DCMS response does not, however, point to a September date but does, helpfully, point to key detail that gambling operators would be well-advised to observe:

  • First, maximum limits for online slots will only be introduced following the passing of secondary legislation.
  • Second, it appears to be the case and the DCMS phrases this as an ‘expectation’, that those gambling operators that offer online slots will be given a “minimum of 6 weeks’ transition period…to introduce a £5 stake limit for all customers”.
  • The DCMS “will then allow a further 6 weeks for the development of any necessary technical solutions before we expect the lower stake limit of £2 for young adults aged 18 to 24 to be in place”.
  • However, if gambling operators “are unable to develop solutions to adequately distinguish between customers who are 25 and over and those who are under 25, the expectation is that they will not be able to offer any customers stakes exceeding £2 per spin.”

As a general observation, the lack of clarity around timing is unwelcome but, at this point, is unsurprising. When DCMS states that stake limits will be introduced in ‘September’, are operators to interpret that to mean when the secondary legislation will be passed, in which case it will then (seem to) have six weeks to implement the £5 limit? Or should gambling operators have their house in order with respect to the £5 stake limit by 1 September? Either way, operators should be taking steps, and we expect many are already doing so, to develop technical solutions to be compliant once the stake limits for online slots enter into force.

In particular, operators should be aware that unless their technical solution can identify and distinguish cohorts of customers that are 18 to 24 from those that are over 25, the expectation is that the maximum stake limit for online slots, for those operators at least, will be £2. That may have not insignificant commercial consequences.

In reality, the stake limits at these levels were in line with the expectations of many operators and, in the case of some of the larger companies, they had already introduced some limits on a voluntary basis (particularly for the under 25s) as part of their safer gambling frameworks. These companies are likely to suck up the impact of the stake limits more easily than their smaller competitors, especially those more niche operators with gaming rather than sports betting led offerings.

With the raft of changes coming as a result of the White Paper (including financial risk checks), it will be very difficult to analyse the impact of the new stake limits on a standalone basis. The government has set the pace of change so that ship has sailed. It does seem inevitable that unlicensed operators who already actively look to promote a route for customers to circumvent the impact of Gamstop or responsible gambling tools deployed by licensed operators will see the ability to offer high stakes slots games as a marketing tool. Regardless of the arguments on the extent of the UK black market, the Gambling Commission will have a task on its hands to take enforcement steps to avoid it growing on the back of this and other forthcoming developments.

Article By: Rawa Kaftan

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SOURCE: Wiggin LLPLexology.

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