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Operators in the UK could face a £2 limit on online slots stakes this year, the gambling regulator warned Wednesday.
UK Gambling Commission CEO Neil McArthur told a parliamentary committee in Westminster the hard limit would be considered, with a decision made in six months.
Gambling stocks dipped on the news, with William Hill down around 7% and GVC down 5% on Thursday. The true financial impact of such a cap is not immediately clear. Morgan Stanley said it could cut earnings per share for gambling firms by anywhere from 20%-60%.
The same parliamentary committee on gambling-related harm has previously suggested such a cap, but the commission has been reluctant to agree.
@GamRegGB CEO Neil McArthur told me in a recent interview that cutting online stakes was "not the thing that we think will have the biggest impact", with data suggesting that "the vast majority of staking is of fairly low stakes"
— Dominic Walsh (@walshdominic) February 13, 2020
Those within the industry have also argued that a blanket £2 limit on stakes is a blunt way to protect problem gamblers.
William Hill Communications Director Ciaran O’Brien described a hard cap as “analogue regulation for a digital age.”
Online players are already subject to stringent identity verification and affordability checks. Operators also run algorithms designed to spot players at risk of problem gambling.
A rigid cap on stakes doesn’t do much more to protect these players. It does however hinder high-rollers who can afford to bet large sums. These players are therefore at risk of leaving regulated operators for the black market.
Former Sky Bet CEO Richard Flint echoed that view on Twitter:
…Grey/black market operators will love this. I recognise that some will be sceptical of industry warnings here but I genuinely believe this will be a huge issue. Just spend some time investigating these operators and various country’s efforts to control them.
— Richard Flint (@YorkshireFlint) February 13, 2020
UK trade group Betting and Gaming Council warned that an estimated 200,000 people in the UK used illegal gambling sites in past 12 months.
BGC chair Brigid Simmons added: “We need to have an online betting gaming industry in this country which is best-in-class but also competitive in a world where, if you are not careful, you could drive people into the black market.”
The BGC said there were 27 million visits from UK IP addresses to black-market gambling sites.