SBC News DCMS: Stake limits expected to reduce online gambling GGY by £166m

DCMS: Stake limits expected to reduce online gambling GGY by £166m

The UK government decision to implement of new £2 and £5 stake limits for online slots, set to take effect later this year, is anticipated to impact the annual gross gambling yield by £166.2 million.

As announced on Friday by the Department for Culture, Media & Sport (DCMS)  from September  a maximum stake limit of £2 on UK online slots for anyone aged between 18 and 24 years old, as well as a £5 limit for anyone aged 25 or over will be applied on online operators.

The stake limits will bring online slots in line with land-based casinos and follow a 10-week consultation period in which the government says the majority of respondents – who were industry workers, academics, treatment providers and individuals – agreed with the statutory limits for online slots stated within the gambling white paper.

The DCMS has published its response to the online slot stake limits, to which it stated that the annual reduction to GGY is expected to be £166.2m, with a 5.2 per cent drop in online slots GGY and a 2.6 per cent decline for total remote GGY.

In addition, the government noted that operators will be subjected to other costs such as “the implementation costs of game development teams needing to test and deploy a stake limit on live games”, which will be fully explored in a final stage impact assessment to be published alongside the statutory instrument later this year.

The DCMS also stated that it can’t accurately estimate how the stake limits will, in isolation, impact the population rates of gambling-related harm, but it has evidence that it will “limit the potential for harmful losses from those gambling at elevated levels of risk or experiencing problem gambling compared to the status quo of theoretically unlimited stakes”.

The government noted that it received 98 responses to the consultation, including 46 individual respondents and 52 from organisations.

One question asked if additional protections are needed for young adults aged between 18 to 24 and if a separate lower stake limit should be implemented, with five possible options to choose from: a £2 stake limit; a £4 stake limit; consistent with the limit for all adults but with extra operator vigilance; none of the above; or I don’t know.

Out of all respondents, 30 per cent were in favour of a £2 stake limit for young adults 18 to 24, while three per cent were in favour of a £4 stake limit.

29 per cent were in favour of a stake limit for young adults aged 18 to 24 that is consistent with the limit for all adults but with extra operator vigilance. Of these respondents, the majority supported a limit for all adults of either £2 or £10.

The ‘none of the above’ option was selected by 30 per cent of respondents, to which the majority supported a separate stake limit that is £2 or below, while a few argued that young people should not be allowed to access online slots.

Overall, the DCMS noted that 60 per cent favoured a stake limit of £2 or under for young adults aged 18 to 24, while 34 per cent were in favour of a universal limit of £2 across all adult age groups. However, it was unclear how many of those for a consistent limit for all adults would support a lower limit for young adults if the general limit is to be higher than £2.

The DCMS commented: “After considering the consultation responses, we have decided to introduce a stake limit of £2 per spin for young adults aged 18 to 24. We believe the evidence justifies increased protections for this cohort, including a separate lower stake limit.

“Young adults have the highest average problem gambling score of any age group, generally lower disposable income, ongoing neurological development impacting risk perception, and common life stage factors like managing money for the first time or moving away from support networks.”

The DCMS added: “A separate limit for young adults aligns with the wider government approach to gambling of targeted and evidence-based interventions for those at risk, while not unduly restricting others.”

Commenting on the £5 online slot stake limit for those aged 25 or over, the DCMS said: “We believe 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.

“Around 20 per cent of customers currently choose to stake over £5 on a spin at least once a year (so will be impacted by this measure), but only 0.6 per cent of all spins are over £5.

“We think that a £5 maximum stake for adults aged 25 and over will help to reduce harm because of the constraint on a player’s ability to place very large stakes quickly.

“Moreover, it takes consideration of the structural differences between land-based in-person gambling and online play. A £5 limit aligns with the stake limit for B1 machines in casinos which we believe to be the most comparable land-based gambling environment in terms of risk.”

A six-week transition period will be put in place to allow operators time to be compliant with the £5 stake limit rules, followed by an additional six-week period for necessary technical solutions development to be compliant with the £2 limit for young adults aged 18-24. The government added that responses to wider measures from the white paper will be published soon.

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