By Pavlos Sideris, Double Up Media Director

At the limit: where to draw the line on stake and deposit limits

Pavlos Sideris has been involved in the iGaming industry for over 12 years and is director of Double Up Media, a UK-based affiliate lead generation company. Sideris values the importance of fairness and transparency in iGaming and believes in putting players before profit.

Reading time 4:35 min

The UK’s biggest gambling brands already offer stake and deposit limits for their players, but they also need the authorities to find the right balance between regulation and player protection measures, says Pavlos Sideris, director of Double Up Media.

The uncertainty that has dominated UK politics in recent months has also affected the country’s gambling industry in that the already long-awaited publication of the White Paper on gambling reform has once again been put on hold. 

But while the government or politicians might not yet have all the details of the new guidelines and recommendations, operators have been busy behind the scenes. The large ones have implemented changes ahead of the formal new rules around deposit or stake limits, which will feature prominently when the report is eventually published. 

Gamesys, Flutter and Entain go ahead with Limits

UK firms such as Flutter, Gamesys and Entain have been awaiting the white paper publication since April, so it’s not surprising some have gotten ahead of the game, implementing a form of deposit or stake limits early.

Entain became the first UK betting company to implement personalised stake limits and credit checks using publicly available data for customers flagged as high risk. The company has stated that it doesn’t want to impose blanket limits on all players, instead using AI to identify when a customer requires intervention. However, they estimate that the responsible gambling measures will reduce revenue by £40m.

Meanwhile, Flutter Entertainment announced a £500 monthly limit for under 25s, which went into immediate effect in mid-2021 and is part of the Affordability Triple Step Framework (which uses real-time data to monitor player activity). The company decided on a blanket limit for this age group because the number of significant life events that occurred around that age made it vulnerable to potential gambling problems. 

To strengthen its case, research conducted by Flutter also indicated that there is widespread support across all age groups for additional measures to protect and support younger people, with 77% of regular gamblers approving overall, while support for additional measures amongst 18-24 year-olds polled at 78%.

However, no gambling operators have created a maximum stake rule for online slots, which remain the most popular online casino product in terms of revenue, popularity, and number of games. This is well demonstrated by the latest UKGC industry stats, which show online casino, betting, and bingo generated £6.9bn in gross gambling yield (GGY) between March 2020 and April 2021; the three key product verticals were as follows:

  • Online casino games generated £4bn in GGY, £2.9bn from slots games.

  • Online betting totalled £2.6bn, led by football (£1.2 bn) and horse betting (£856.1m).

  • Online bingo totalled £189.1m.

Should stake limits be introduced, the GGY for slots would be significantly impacted. 

Lessons to learn: Germany and Sweden

While there are no deposit or stake limits legally in effect in the UK, Europe makes a great case study, as countries such as Germany and Sweden already have stake or deposit limits in place.

Germany: Germany introduced online casino gambling in July 2021. Before, only sports gambling was permitted. The market launched with a 5.3% tax rate for online slots and poker stakes and a €1 per spin cap on all slots. 

Germany’s sports betting association, the Deutsche Sportwettenverband (DSWV), has argued that this will jeopardise the potential success of the new gambling regulations, making the market unattractive to licensed operators and calling for heavy sanctions on unlicensed operators to combat this. 

Sweden: Meanwhile, Sweden has gone full circle, introducing slot stake caps, which have since been removed, a SEK5000 (€460) deposit limit at online casinos, and bonus rules, which limit offers to one per player upon sign-up at a maximum of SEK100 (just short of €10). The bonus rule, in particular, has come under fire from operators and political parties. 

In June 2022, Spelinspektionen, the Swedish gambling regulator, released the results of an annual survey of 4,400 people that examined why Swedes use unlicensed casinos. 

Of the respondents who gambled offshore:

  • 32% said the main reason was bonuses, a 21% increase from the previous year’s results. 

  • 25% commented that the odds/products are better at unlicensed casinos.

  • 26% said it was due to being listed as self-excluded from licensed operators. 

Such results suggest that Sweden's strict regulatory framework results in offshore gambling. Moreover, the preceding year’s results showed that the unpopular stake limit on slots was also a driver of offshore gambling, with 16% saying this was why they gambled offshore in 2021.

Do stake and deposit limits drive players offshore?

It’s not just Germany, Sweden, and the UK struggling to strike the right balance between measures that keep players safe and fostering market growth. 

In February 2022, the Betting & Gambling Council released offshore gambling activity figures that showed huge increases across Norway, France, Denmark, Italy, the UK, and Spain.

The report suggested that “jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics”. While the findings did recognise it was not possible to isolate specific policies, the implications of the research were clear; more significant gambling restrictions lead to increased offshore gambling. 

This conclusion can also be applied directly to the UK, where the black market has doubled in size over the last two years, coinciding with the banning of feature-buy and auto spin functions, speed of play limits on slots, and the prohibition of credit cards in gambling.

The claim that greater regulation drives offshore gambling is troubling for several reasons. For one, it defeats the point of regulation, which is to create a safe, legal and trusted gambling environment for players and suggests that gambling commissions are getting it wrong in using restrictions to achieve this aim. 

Moreover, the data must also be viewed in context; the respondents are undertaking an illicit activity, meaning their responses might not be completely accurate. Lastly, it should also be acknowledged that the research was used for political lobbying against increased regulation. 

However, it does prompt the question, where do we draw the line between measures designed to protect and those that are counterproductive from a business perspective? 

While it may seem like stake and deposit limits could drive offshore gambling levels, especially when looking at the Swedish case, there are also conflicting figures, such as the response to Flutter Entertainment’s blanket deposit limits for those under 25s, which has been positively received. 

Finding the right balance 

To know where to draw the line with regulations that are aimed at protecting players while not pushing players into using unlicensed sites more research needs to be done on which specific policies encourage players offshore. With this knowledge, regulators will be better equipped to design more effective and relevant legislation. 

Indeed the aim should be to create an environment where operators can grow and players are protected, but without being pushed into unregulated and unsafe environments because the products they are interested in are not available or significantly curtailed.

Leave your comment:
Subscribe to our newsletter
Enter your email to receive the latest news