Britain leads the world in online gambling
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Vulnerable punters are poorly protected
NOW AND THEN “Samuel” is plagued by old cravings, though he says he has quit gambling for good. The 25-year-old got hooked on online betting at 17 and, at the worst point, could squander a month’s salary in minutes. He is not alone. By one estimate 29m Britons place a bet at least once a month, and hundreds of thousands have some sort of problem with it. Could new regulation help to tackle that?
Current law on gambling was drafted nearly two decades ago for a largely bricks-and-mortar era. In the years since, with a smartphone appearing in every hand, Britain has emerged as the world’s largest regulated online betting market. Mobile bets, especially, encouraged the boom. Since 2019 at least half of online gamblers have been using smartphones. The value of the online industry (excluding the National Lottery) has soared: a measure of profit before operating costs, the gross gambling yield, reached £6.4bn in 2022, from £817m in 2009.
Light regulation has helped the sector, but left some individuals to struggle. A recent white paper offers the government’s ideas for better protecting the likes of Samuel. Its proposals include more background checks on potentially vulnerable punters, stake limits for online slots, and a levy to fund research on limiting the harm suffered by addicts. But any law will struggle to keep up with rapid changes in how betting takes place.
Take video gamers who buy virtual items. A study in 2021 by academics at the universities of Plymouth and Wolverhampton found that “loot boxes”—video-game purchases of a mystery selection of goods—are “psychologically akin to gambling”. Belgian authorities banned them in 2018; the Dutch will probably do so soon. British law, however, only requires companies to buy a gambling licence if such in-game items may subsequently be cashed in (these typically are not). The white paper fails to address such new forms of gambling.
Addiction is a particularly tough challenge. Companies are adept at making powerful, habit-forming games by drawing on data that flow to developers every time a punter spins a digital wheel. They have learned what users find most gratifying; near-misses are particularly potent for problem gamblers, for instance, because the thrill of almost winning enhances dopamine transmission.
Rates of addiction among those betting online appear to be higher than for those off. A study in 2016 by NatCen, a research institute, found 3.5% of online gamblers with problems, versus an average of 1.2% across all forms of gambling. “It’s incredibly easy to get hooked because betting is faster and more accessible,” says Samuel. Nonetheless, official proposals to address this look modest. Limits on online stakes could be set as high as £15, above existing, self-imposed caps of most operators. And because stringent background checks will probably kick in only after daily losses of £1,000 most of those at risk will not be spotted.
A last problem concerns firms’ use of marketers. The white paper suggests such affiliates, which are not directly regulated by the Gambling Commission, bring as much as 40% of customers to online sites. In theory operators make subcontractors comply with the rules. In reality, many don’t. In 2018 the regulator fined LeoVegas, an operator, after its affiliates contacted 2,000 problem gamblers who had previously excluded themselves from marketing campaigns and betting sites. More could be done to constrain the affiliates, but a proposal from a House of Lords committee to better regulate the middle men has, so far, been ignored.■
