In the two days following the statement by Gambling Commission CEO Neil McArthur (12 February 2020) that he would consider slashing the maximum stake for online slots to £2, the shares in GVC Holdings, the largest of the UK’s gambling operators, fell by 11.6%, mirrored by other UK gambling stocks.

At the moment, no decision has been made, but the sell-off in gambling stocks underlines the tension in the relationship between the UK gambling authorities and the gambling industry. A statement that it would ‘consider’ is not a policy, or even an intention, but caused a sell-off to the value of £500m.

A £2 stake limit would be disastrous, and not only for gambling companies. The UK Treasury would see remote gaming duty fall and its overall tax take from the industry would decline, unless it could recoup the shortfall from other sectors of the gambling industry.

There are always unintended consequences for such a sharp reduction in stakes. Gamblers are used to the freedom of betting within their own level of resources, and to impose such a limit would give rise to illegal internet gambling, or customers would opt for the land-based alternatives.

Casinos are already benefitting from the £2 limit on Fixed Odds Betting Terminals and may see further gains.

Which brings me to the National Lottery. The contract to run the lottery is up for renewal and, as part of the process, those that wish to win the licence will present to the Gambling Commission how they intend to expand revenue.

In the US, scratch cards with a stake of US$ 20 and US$ 30 have expanded the instant game to 42% of total revenue in some states. A move that would have some appeal in the UK. However, in October the Gambling Commission ordered retailers to stop selling GB£ 10 instants on the grounds of ‘player protection’.

Add to this the comments from Mims Davies MP, former Parliamentary Under Secretary at the DCMS. She told the House magazine people aged 16 or 17 should be banned from buying scratch cards.

So how do you expand the lottery so that the charitable funds keep pace with inflation when you intend to limit the market by banning those under 18 years of age (a good thing) and at the same time limiting stakes to £5 maximum? One way is to diminish the competition.

Not hard to achieve through increasing taxes and limiting the scope of the product through stakes and prizes.

Camelot’s interactive sales are at all-time highs. Instants online are popular and will see a significant increase were stakes and prizes limited for casino and slots online.

Written by Warwick Bartlett