GPWAtimes.org 32 Marketing and incentives Some have felt that the White Paper did not go far enough in terms of imposing further restrictions on gambling advertising, but there are some key measures to be aware of. One requirement that has been finalized, and will come into force in January 2025, is that customers must be asked to opt in to receive direct marketing, both on a per channel (phone, email, or text) and per product (betting, casino, or bingo) basis. Customers will need to select their marketing options before gambling again after the implementation date. The Commission also has an ongoing consultation exercise on bonuses and incentives. In this, it proposes to set limits on wagering requirements for bonus fund offers so that customers may only be required to play through the bonus funds either one, five, or 10 times. Another option under consideration is to ban wagering requirements altogether. It seems unlikely the Commission will opt for the complete ban, however, any of the other options are likely to affect the bonuses that gambling operators are able to offer. As with stake limits, this proposal comes with a risk that customers are tempted by higher bonuses (albeit with higher wagering requirements) that unlicensed operators can make available. An additional proposal under consideration is that operators be prevented from mixing product types within incentives. Slots stake limits A final decision has also been made on another key proposal from the White Paper – stake limits for online slots games. Following consultation, the Government has decided to set the maximum stake at £5, or £2 for customers aged under 25. The £5 limit reflects the maximum stake available on slots machines in land-based casinos, although younger customers subject to the £2 limit will be able to play for significantly higher stakes in a land-based setting than they can online. The Government’s rationale for introducing these stake limits is that “access to high-stakes play clearly exacerbates the risk of consumers engaging in harmful gambling behavior.” The difficulty with this analysis is that the new stake limits will not remove access to high-stakes play – it is not an offense for British consumers to gamble on unlicensed websites and such sites can be accessed with relative ease. The Government’s impact assessment notes evidence from Flutter, which voluntarily introduced a £10 stake limit in 2021, that around a quarter of the revenue it had been deriving from stakes over £10 was lost. Flutter assumed this revenue went to the black market or other licensed operators who allow higher stakes. In 2022-23, high-stakes slots (above £5) generated £237 million, accounting for 7.4% of the total gross gambling yield (GGY). However, the government projects a £138.5 million decrease in annual GGY due to the proposed £5/£2 stake limits, expecting players to shift to lower stakes or other gambling products rather than abandoning them altogether. Operators that particularly cater to higher spending customers will obviously be hardest hit. Of particular concern is the extent to which these higher-spending customers move to the black market. Rates of channelization in Great Britain are currently estimated to be relatively high, with the Government’s consultation citing rates of around 98% derived from the European Commission and Danish Gambling Authority. Noting that the Government had to turn to overseas regulators for an estimate of the current size of the black market, it seems the extent of any displacement will be hard to track. Given that the purpose of these measures is to protect higher-spending customers from gambling harm, not knowing how many of these customers have moved to riskier environments is worrying. The Gambling Commission has nevertheless been working to tackle the black market and, in particular, established a procedure for referring both unlicensed websites and affiliates advertising unlicensed websites to Google, for the search engine to remove the specific URL from search results. As of April 2024, around 7,000 sites have been delisted from Google as a result of this. As new games come onto the market, in particular the increasingly popular “crash” games, it is worth bearing in mind that only games that meet the definition of “slots” will be subject to the stake limit. This is restricted to “casino games of a reel-based type (including games that have non-traditional reels).” The Government intends that this capture “boundary pushing” products, however, it is difficult to see how a new game that has no element that could be described as reel-based could be caught by the stake limits, even if it is particularly designed to create similar levels of engagement to slots. Some new restrictions will also come into force for non-slots games, including a minimum of five seconds per game cycle and a ban on auto-play features. The new stake limits will be implemented through Regulations, which will create a new license condition. This is anticipated to come into force in September 2024, although a six-week implementation period for the £5 limit and a further six weeks for the £2 limit is expected. UK GAMBLING WHITE PAPER Melanie Ellis is a gambling regulatory lawyer and partner at Northridge Law LLP in the U.K., advising on all aspects of British gambling law, including license applications, regulatory compliance, advertising, Gambling Commission regulatory action, and gambling-related transactions. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas. She is recommended by the Legal 500 and Chambers & Partners directories and is a frequent contributor to publications such as EGR and Casino International, as well as speaking at industry events.
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