Double Up Media: Are online casino safeguarding techniques really working?

Double Up Media: Are online casino safeguarding techniques really working?

Writing for CasinoBeats, Pavlos Sideris, director at Double Up Media, discusses recent UKGC safeguarding measures, their effectiveness, and the impact excessive regulation could have in the future.

Last month, Nigel Huddleston, the UK Parliamentary Undersecretary for Digital, Culture, Media and Sports, disclosed during a Westminster debate on gambling harms that the white paper, which details the future recommendations for UK gambling regulations, is being finalised.

The white paper is part of the long-awaited sustainability review of the UK’s 2005 Gambling Act. The review focuses explicitly on updating the UK’s gambling regulation, fit for the modern age, looking at particular safeguards, including deposit limits and affordability checks and the wider operating environment and rules. It is expected to increase what is already considered by some as one of the more regulated markets for operators.

The UKGC continually updates and conducts research, adapting its Licensing Conditions and Codes of Practice. Usually, this means increasing safeguarding techniques for online gamblers, including fining operators who fall short of the licensing conditions.

While all stakeholders argue for regulations such as fair and safe gaming, in the case of the UK, with the gambling review almost complete, it seems key to discuss to what extent the safeguards are working. Or if, as reports suggest, regulations are becoming too restrictive and increasing incentives for players to use offshore casinos rather than creating a safer playing environment.

Deposit and stake limits

Deposit and stake limits have been a hot topic of debate and reform. In 2021, the UKGC brought in new rules, specifically aimed at slots (as these games see the highest average loss per player), including limits on spin speeds and a ban on features that speed up play or celebrate losses and autoplay.

Regulation is expected to increase with the publication of the white paper, which is speculated to focus on deposit limits and affordability checks, with some ministers during last week’s debate advocating for monthly limits of £100 on deposits and player affordability checks.

There is support and evidence that budgeting tools work when mandatory. Looking at research undertaken by the Gambling Treatment & Research Clinic of 40,000 Australian gamblers, the study reported that players don’t use budget limits when voluntary, as they are currently in the UK. However, when it became mandatory to either set a limit or opt-out, most gamblers set a budget and stuck to it, with only one in four increasing it and one in eight opting out.

The study also suggests that the implication is that wider financial tools and limits could be effective. However, there is a difference between mandatory budget setting and limiting player deposits according to affordability checks. 

A key concern for players is how invasive the affordability checks will be and how will deposit limits be implemented under an affordability model? Thus far, the debate has stressed a proportionality aspect, which is good news, as well as the use of a ‘single customer view’ tool, which would allow operators to identify gamblers with multiple online accounts and better support those at risk.

Targeting difficult to understand T&Cs 

This has been on the agenda for some time, and in 2017 the UKGC, alongside the Advertising Standards Authority, targeted sites with difficult to understand bonus terms and conditions, punishing several prominent operators. 

The penalties resulted from a massive influx of complaints from UK players to the Gambling Commission. There were two central features, players were unaware of the wagering requirements included on bonuses and that the wagering requirements were excessively high, with some sites implementing over 100x wagering conditions.

The sanctions spurred reform among operators, ensuring that their terms and conditions were clear and demonstrated to players. The UKGC taking a firmer stance on how gambling sites operated was extremely helpful in safeguarding players from predatory terms and conditions, such as unclear wagering requirements. 

Over the last few years, Google search terms for ‘no wagering requirements’ or ‘no wagering’ bonuses and casinos have seen an enormous increase showing far more awareness from gamblers and pushing the industry to be more transparent in their promotions.

Wagering requirements

The Gambling Commission recently updated their guidance on fair terms and practices, highlighting their concerns that wagering requirements may encourage excessive play.

Unrestricted wagering requirements encourage irresponsible gambling and are one of the areas that are likely to be covered in the white paper. It is easy to understand the arguments for why wagering requirements do not safeguard players as they can encourage prolonged play beyond a point that would otherwise be sensible to cash-out, instead forcing players to continue wagering hundreds or, in some cases, even thousands of pounds in a short space of time. 

There has been a growth in no wagering casinos, but a majority of operators still stick to the model of high wagering requirements. While bonuses are now communicated clearly and demonstrated in the terms and conditions, it’s usually sites offering bigger and, therefore, more tempting bonuses with higher requirements.

Operators naturally will argue that wagering requirements are necessary to prevent bonus misuse, however, the case for an upper limit on wagering requirements does not take away from this argument; it simply suggests that wagering requirements in the current form are not in line with responsible gambling. And as demonstrated earlier, when the UKGC takes action to safeguard players from predatory terms and conditions, it’s positive for the industry, with operators still profiting and players able to make use of bonuses reasonably.

Do safeguards work: The growth of the black market

“British punters using unlicensed sites has more than doubled in just two years, from 220,000 users to 460,000 and the amount staked is now in the billions of pounds.”

Through the Licensing Conditions and Codes of Practice, the UKGC has incrementally taken steps towards greater regulation of the gambling industry with the core aim of safeguarding players. However, this has also coincided with a growth of the offshore market.

Research conducted by PWC on behalf of the Betting and Gaming Council and published in 2022 notes the increase. It draws comparisons across Europe, where greater regulation has already been implemented, alongside the growth of offshore sites.

In the context of upcoming UK gambling reforms, the report’s findings are pertinent and formally recognise trends that many industry experts are pointing to:

“This analysis suggests that the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks…Whilst it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests that jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics.”

The Chief Executive at the Betting and Gaming Council UK stated his support for the gambling review but warned of the real danger that greater regulation could pose to reducing the size of the legal market, saying that the UK must learn lessons from abroad. The Former General Counsel at the French gambling regulator added that reforms must “support those at risk while not punishing the wider public”.

Will the white paper provide the balanced approach needed to maintain the market?

It seems evident that there is a careful balance to be struck between protecting players through safeguarding techniques that have been shown to work (like clear advertising rules, terms and conditions and mandatory budget setting) and creating regulation fit for modern internet gambling that maintains a legal market and the integrity of the industry.

With laws that are 17 years outdated, a review and new regulations are certainly in order. The white paper is due for release in May; hence there won’t be long to wait to see which path the UKGC will take and the effect on the industry.

Author: Ava Harvey