DCMS says new maximum stake limit on online slots could reduce GGY by $210M

The UK's Department for Culture, Media & Sport (DCMS) announced last Friday that from September onwards there will be a maximum stake limit of £2 on online slots for anyone aged between 18 and 24 years old, as well as a £5 limit for anyone aged 25 or over. In a new estimate, the UK government said that the new stake limits could cost the industry £166.2 million ($210.7 million) in gross gaming revenue per year, with a 5.2% drop in online slots GGY and a 2.6% decline for total remote GGY. 

The stake limits will bring online slots in line with land-based casinos. The measure follows a 10-week consultation period in which the government says the majority of respondents agreed with the limits for online slots, stated within the white paper on gambling reform. According to the government, it received 98 responses to the consultation, including 46 individual respondents and 52 from organizations. 

In addition, the government noted that operators will be subjected to other costs such as "the implementation costs of game development teams needing to test and deploy a stake limit on live games." This will be fully explored in a final stage impact assessment, to be published alongside the statutory instrument later in 2024.

According to the DCMS report, out of all respondents, 30% were in favor of a £2 stake limit for young adults 18 to 24, while 3% were in favor of a £4 stake limit. 29% were in favor of a stake limit for young adults aged 18 to 24 that is consistent with the limit for all adults but with extra operator vigilance. Of these respondents, the majority supported a limit for all adults of either £2 or £10.

The 'none of the above' option was selected by 30% of respondents, to which the majority supported a separate stake limit that is £2 or below. Meanwhile, a few argued that young people should not be allowed to access online slots at all.

Overall, the DCMS noted that 60% favored a stake limit of £2 or under for young adults aged 18 to 24, while 34% were in favor of a universal limit of £2 across all adult age groups. However, it was unclear how many of those for a consistent limit for all adults would support a lower limit for young adults if the general limit is to be higher than £2.

"After considering the consultation responses, we have decided to introduce a stake limit of £2 per spin for young adults aged 18 to 24. We believe the evidence justifies increased protections for this cohort, including a separate lower stake limit," the DCMS stated. 

"A separate limit for young adults aligns with the wider government approach to gambling of targeted and evidence-based interventions for those at risk, while not unduly restricting others," the DCMS added.

The DCMS believes that a £5 limit will achieve the government’s stated objectives "in a proportionate way," with a lower risk of unintended consequences such as displacement to the illegal online market.

"Around 20% of customers currently choose to stake over £5 on a spin at least once a year (so will be impacted by this measure), but only 0.6% of all spins are over £5. We think that a £5 maximum stake for adults aged 25 and over will help to reduce harm because of the constraint on a player’s ability to place very large stakes quickly," the department commented.

"Moreover, it takes into consideration the structural differences between land-based in-person gambling and online play. A £5 limit aligns with the stake limit for B1 machines in casinos which we believe to be the most comparable land-based gambling environment in terms of risk," the DCMS concluded.

The limits will come into force later this year in September, following secondary legislation. A six-week transition period will be put in place to allow operators time to be compliant with the £5 stake limit rules, followed by an additional six-week period for necessary technical solutions development to be compliant with the £2 limit for young adults aged 18-24. The government added that responses to wider measures from the white paper will be published soon.