UK Government Set to Impose £2 Cap on Digital Slot Machines: A Strategic Blow to the Gambling Industry

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The UK Government is poised to implement stringent new limits on digital slot machines, potentially setting caps as low as £2 per spin. This development, as reported by The Guardian, could significantly dent the revenues of online casino operators by hundreds of millions of pounds, marking a profound shift in the regulatory landscape of digital gambling.

Over the past year, following the publication of a gambling reform white paper, discussions have been underway regarding the establishment of a maximum stake for online casino games. It is anticipated that the new restriction, which is expected to be announced on Friday, will set a £2 limit for individuals under the age of 25, mirroring the constraints previously placed on fixed-odds betting terminals (FOBTs) by the government in 2019. For players above this age threshold, a higher limit of £5 per spin will be instituted.

Currently, there is essentially no cap on the stakes players can wager on these games, which annually contribute over £3 billion in player spend and exhibit a higher addiction rate compared to other gambling products, like sports betting. Some larger operators have voluntarily adopted stake limits.

The Guardian has been informed by gambling advocacy groups and industry insiders that the Department for Digital, Culture, Media and Sport (DCMS) is expected to unveil further specifics, including the effective date of these restrictions, on Friday. The DCMS has declined to comment on the matter.

This impending regulation could cost the UK’s gambling industry dearly, with revenue losses potentially running into hundreds of millions of pounds.

During its initial consultation phase on stake limits, the government had proposed a range between £2 and £15. According to the white paper released in April 2023, setting the limit at the midpoint of this range, £8.50, would result in up to £185 million in lost revenue for the industry. However, implementing a cap of £5, or even £2 for younger players, is likely to escalate the financial impact on online casino businesses well beyond this estimate.

The introduction of two-tiered stake limits is also expected to increase operational costs for providers.

Campaigners who have long voiced concerns over the addictive potential of gambling welcomed the new measure but expressed that it falls short of what is necessary. “I am pleased that the government has seen sense and opted for a £2 limit for people under 25,” stated Labour MP Carolyn Harris, who leads a cross-party group on gambling-related harm.

However, she also noted, “There is, however, clear evidence that a £2 limit should be in place for everyone to prevent harm. The government has sided with the industry and should rethink.”

Liz Ritchie, co-founder of the charity Gambling With Lives, shared this sentiment, emphasizing the real harm inflicted by gambling products on individuals and families affected by gambling-related suicides.

Online casinos remain the most significant and rapidly expanding segment of the gambling industry, accounting for £4 billion of the sector’s £11 billion in revenues last year, excluding the national lottery. Of this, slots contributed £3.2 billion, as per the latest Gambling Commission statistics for the year ending March 2023. Alongside the introduction of new slot machine stake limits, the Gambling Commission is also exploring affordability checks for players incurring significant losses.

Recent polls reveal widespread public support for such measures, despite resistance from some quarters of the horse racing industry.

The government’s proposals for gambling regulation reform, outlined in last year’s white paper, include a mandatory levy for addiction treatment, education, and research, alongside affordability checks and new online slot machine limits.

As the gambling industry faces a transformative period, stakeholders must adapt to the evolving regulatory and market dynamics, with flexibility and innovation being crucial for enduring resilience.