The UK Gambling Commission (UKGC) has asked for evidence from stakeholders whether a proposed £100 loss limit is justifiable.
A Proposed £100 Loss Limit Sends Scares in the UK Market
The UK Gambling Commission (UKGC) is flirting with a new idea that has sent chills down the spines of gambling firms. Will a potentially industry-ending £100 loss limit apply or are the government, commission and stakeholders going to find a way to resolve affordability issues in light of a pending 2005 Gambling Act review.
The review has already flustered some executives, including English EFL boss Ricky Parry who urged the government to tread lightly and consider the timing of a proposed ban on gambling partnerships between operators and football clubs.
Yet, the UKGC is not rushing anything. The watchdog is instead going to examine evidence from industry stakeholders across pre-select areas to make sure that affordability standards are set objectively and to the benefit of consumers without putting unnecessary weight to businesses.
The UKGC wants to seek a balance between what it sees as consumer freedom and consumer protection. The regulator specifically said that “Individuals spending more than they can afford to lose is one of the harms most commonly associated with a gambling disorder, and the harms can be significant even at spending levels which can be seen as low.”
According to the regulator, however, the level at which gambling spend becomes an issue to consumer protection is determined on case-basis, as the consumer’s discretionary income is what matters here.
Put another way, if a consumer has no disposable income and is sacrificing money that is earmarked for necessities, then those gambling habits are unsustainable and intervention is required.
At the same time, the UKGC wants to seek solid evidence of how to best create regulations that allow it to minimize the risk to participants. Discretionary income, according to the watchdog, is the best way to approach the issue.
According to the regulator, having individuals spend their entire disposable income on gambling is already a sign of dangerous and harmful behavior. The commission already has some ideas in mind, including the feared £100 loss limit.
The number is based on a survey conducted by David Forrest and Ian McHale from the University of Liverpool back in 2017. According to their data, the average UK user is losing £100 loss limit per month, which could be the basis of setting the limit.
What Does the Commission’s Top Man Thinks?
According to UKGC CEO Neil McArthur, the commission has targeted cases where users were effectively showing symptoms of gambling-addiction or gambling-related harm, but operators failed to take any appropriate actions. Cited by The Telegraph, McArthur had this to add, revealing a worrying trend:
“Some of these individuals have funded their gambling activity through crime but the majority of cases were customers relying on unsustainable funds such as loans, credit, inheritance, personal injury or redundancy payments.”–UKGC CEO Neil McArthur
McArthur also said that a previous threshold for discretionary income was set at £2,000 but the commission didn’t think of that as a realistic metric, as 98% of the population was well under this threshold.
Extrapolating from the available data, McArthur suggested that the most plausible threshold would most likely be £100 in losses per calendar month. The UKGC is basing this statement on a report carried by one Dr James Noyes in August.
To be able to determine if this threshold limit is realistic, the commission will allow time for consultation until January 12.