14 November 2023

Tackling Gambling Stigma’s Response to the Stakes Consultation

Tackling Gambling Stigma’s Response to the Stakes Consultation

Tackling Gambling Stigma’s Response to the Stakes Consultation

One important consultation to come out of the White Paper on gambling reform is the Department for Digital, Culture, Media and Sport (DCMS) consultation on what the maximum stake should be on online slots. Currently, there is no limit set by the government. Through a stake limit, this policy aims to put in place a theoretical cap on the amount a consumer can lose in a given time playing online slots, to prevent harm to consumers and those around them from runaway losses.

The way the consultation is constructed makes us concerned that the limit will be set at around £5. The range of £2 to £15 is a way for the DCMS to seem strict by choosing the lower end of the spectrum, £5, while still considering other options. However, this favours the gambling companies and does little to protect vulnerable consumers. Further, it would not achieve the government’s stated aims, is not based on evidence and is contrary to the precedent of the Fixed Odds Betting Terminal (FOBT) stake limit.

Read the full report here: Slot stake submission – Tackling Gambling Stigma

Costs and benefits

The only concrete evidence the department can provide to support a £5 over a £2 stake is that the latter results in gambling companies making less money – or rather, consumers losing less money to gambling companies. However, it is important to highlight that the government’s calculations over the costs and benefits of lowering the stake do not consider the socio-economic benefits of reducing harm or when consumers spend their money on activities that contribute more to local communities and the British economy, rather than global online gambling companies based offshore.

Consumer freedom and the black market

In their consultation document, the government marks down the £2 option through the well-worn gambling industry arguments about the danger of displacement to the black market and loss of consumer freedom. Yet, simultaneously, the government says the threat of the black market is exaggerated and, in any case, it is taking additional steps to address any risk that the black-market poses. As for consumer freedom, only 3% of all stakes are above £2. This means that a stake limit at this amount would be a minor curtailment on consumer freedom for a tiny minority of play, while increasing the safety of play for everyone – and casual, safe play is what the government and the gambling companies claim they want. A £2 limit is backed by public support.

Equitable approach between online gambling and gambling venues

DCMS says that a £5 stake online would make gambling online and in gambling venues equitable because this is the highest amount you can stake in casinos. But online and land-based gambling are very different. DCMS neglects the commercial advantages and greater risks to consumers of gambling online. This includes that remote companies have lower overheads, are marketing to everyone, can have many people playing the same game at the same time, can make greater use of tools like personalised marketing, are available everywhere non-stop, people can play in private, and play on more than one game at a time. An approach that is fair to companies and gives people the same level of protection on and offline would make the higher £5 stakes available only in land-based casinos.

Ignoring evidence

DCMS claims to be making evidence-based policy. But here, as in other areas of the White Paper, like marketing and advertising, it ignores evidence that would be inconvenient for the gambling industry.

DCMS fails to provide evidence that would be the most relevant to determining the stake level to achieve the aim of preventing harm through runaway losses. Crucially, DCMS has not obtained consumer data on the occurrence of different levels of loss at different stake levels – which is present in gambling company data. Such data was a key factor in the decision to eventually go with a £2 stake for FOBTs. Instead of this data, the Gambling Commission provided industry data for staking levels against the untransparent and unstandardised methods companies use to flag accounts as ‘at risk’.

The DCMS does not reference its decision to set the FOBT stake limit at £2. However, this decision sets an important precedent. Based on the evidence of actual staking behaviour and loss outcomes, DCMS determined that a £2 stake is the level at which losses likely to cause financial harm to consumers and their families are unlikely to occur and captures an appropriate proportion of ‘problem gamblers’. In the absence of the provision of equivalent evidence for online slots, and because the FOBT decision sets an important precedent for the level of harm at a particular staking level that the government tolerates, the online slot stake should be set at £2.

If equivalent data is obtained for online slots, in the unlikely event that this points to a higher stake level, this would at least constitute evidence-based policymaking.

Even more alarming is the oversight regarding the disproportionate impact on deprived communities, where losses hit hardest. The DCMS omits the evidence that profits to industry and losses to consumers from slots come disproportionately from people in deprived areas, and hence the individuals, families and communities who can least afford or recover from intense losses even at a relatively low level. This is more so than for other gaming products and gambling in general. This fact is important as it defines what amounts are unaffordable as well as the need to give greater weight to consumer protection to safeguard the most vulnerable. This means that the limit needs to be considered in terms of low levels of discretionary income and the potential harm to the most vulnerable in society, their families and more deprived communities and set at a £2 limit.

A £2 stake aligns with the evidence and prioritises consumers and communities

In light of these factors, the case for a £2 stake limit becomes not just an option but a moral imperative. It’s a decision rooted in evidence, protecting players and their communities. A £2 limit prioritises people over profit, ensuring that gambling is what the gambling industry says it is, a source of entertainment, not a pathway to financial ruin.

For a deeper dive into these points, explore the full report. It’s your right to understand how gambling affects you and your community. Read the full report here for detailed insights. Slot stake submission – Tackling Gambling Stigma