GRH APPG claims victory in slot stake debate

14 February 2020

The Gambling Related Harm All Party Parliamentary Group (APPG) claims that it has secured a significant victory after Gambling Commission chief executive Neil McArthur confirmed that changes to online slot stakes were to be considered.

McArthur had been speaking at a hearing held earlier this week, in which he answered questions on issues including whether the Gambling Commission was fit for purpose and its enforcement activities, something the APPG considers to be ineffectual.

The APPG claims that McArthur “confirmed for the first time” that the Commission would be reviewing online stakes within six months.

“A review of stake limits online has been clearly recommended by the All Party Parliamentary Group and is long overdue,” the group’s chair Carolyn Harris MP commented. “I am very pleased that the Gambling Commission has finally seen sense on this.”

However, a Commission spokesperson pointed out that the regulator said in October 2019 that it would be looking at online slot stake limits as part of its ongoing work to reduce the risks of gambling related harm.

McArthur's intervention this week could be viewed as the first time the Great Britain regulator has suggested that concrete action (rather than just a discussion) would be take place, though.

This forms part of a wider project to tackle a number of issues.

“This work is in addition to us focusing on VIP practices, advertising technology and game design,” the spokesperson explained. “We will publish our assessment and next steps for online stakes and further protections later this year.”

The six-month timeline mentioned by McArthur in the hearing also referred to an already agreed period for the Commission’s assessment of these issues, the regulator added.

These are being tackled through a series of industry-led working groups, with a view to developing new codes of conduct that will become part of the Licensing Conditions and Codes of Practice (LCCP).

The APPG has questioned whether the industry should be leading these harm prevention efforts.

At the hearing, McArthur also said that if operators failed to take action to reduce the harm caused by VIP schemes, they would be banned by the Commission - repeating a warning first issued in January this year. He also admitting that action to reduce gambling advertising was necessary, again an issue long under discussion.

Whether the review of online stake limits results in a £2 cap for online slots, as proposed by the APPG in its interim report in November 2019, remains to be seen.

“Online slot content games should be reduced to £2 a spin in line with the rules in betting shops,” Harris said this week. “The Gambling Commission must stop being reactive and take action to protect the vulnerable from harm in line with their licensing objectives.”

David Clifton, co-founder of the industry advisory body Clifton Davies Consultancy, pointed out that the call for parity between online and offline staking limits was inconsistent with a £2 stake cap.

That online-offline parity would be achieved with a cap of £5, which is currently in place on B1 gaming machines in land-based casinos, he explained, arguing that these devices were a more appropriate comparator than B2 machines (fixed odds betting terminals).

Talk of parity across channels suggested a shift from the APPG’s interim report, he continued. In that document, Clifton noted, it argued “there is no justification for having slot machine style games online with staking levels above £2, in line with land based venues” rather than directly referring to parity.

Should the APPG's recommendation be adopted, analysts at Regulus Partners estimated around 30% - or £650m - of online slot revenue would be lost, mitigated in part by around 30% of that spend moving to other products.

"This would therefore hit some operators very hard but would be a net benefit to others; the overall impact would be to reduce the online sector by around £480m in revenue terms or around 8% (assuming growth into the impact period)," it explained.

"This may sound manageable (if operationally painful), but purely financial analysis is almost as dangerously simplistic a view as the policy itself, in our view, because the economic and behavioural impact is likely to be much more profound."