Online casinos and sportsbooks have been highly synonymous with VIP schemes that reward big spending players. As gamers continue depositing and playing the games or placing bets at their chosen online casino or sportsbook, the potential for increased VIP benefits grows alongside. These VIP programs are often fairly heavily promoted at many of the platforms. Yet, it seems as though they are likely to be brought to an end in the United Kingdom in the near future. But why is this?
The schemes have been targeted for some time now by campaigners, who say that they have a lot more of a potential to drive people towards gambling addiction. Thanks to the promise of more rewards for the more you deposit it is understandable why it can lead to people getting into difficulties to maintain their me membership and rewards. Is it going to make such a huge difference to the gambling world if they are banned in the UK, though? Is there an increased risk that players will visit offshore and unlicensed platforms to get access to VIP programs instead? And in the end, is that driving custom away from the UK to operators that offer no protections to users?
Let’s take a look at the situation behind VIP programs and why they are likely about to be banned or severely curbed by the government. Plus, we’ll have a closer look at the issues surrounding addiction and how this links to these schemes.
Problems with VIP Schemes
VIP schemes were originally introduced to online gambling sites as a way of ‘rewarding’ those players who were spending a lot of their time at such platforms. The more a player deposited into their account and the more they played the games on offer or placed sports bet, the better they were rewarded as a result. Of course, there is a prime issue with that which can be seen straight away – people are required to deposit higher amounts and utilise a lot more of their time spinning reels or placing bets than they may do without such a scheme. It requires money, and more than what can usually be considered as a responsible level.
Despite multiple betting sites adhering to responsible gambling policies and providing players with means to exclude if they do suffer from gambling problems, this has not stopped many offering VIP programs. People have bene affected in varying degrees over the years of their operation. You only need to take a look at a 2020 story about Nick Firth from Bradford.
Nick was a VIP player at the Betfair platform, and as with many addicts, his gambling intensity increased when he experienced a big win and was invited to become a VIP. This led to him stealing money – about £10,000 – from his ex-girlfriend’s mother. She was providing the couple with a deposit for a house together, which Firth took and gambled away at Betfair. “I kept going and going, chasing losses. They gave me the VIP status during that period”, he said. And emails that Firth had received from Betfair offered him amazing rewards like football tickets and free bets, as long as he maintained his VIP status with the brand.
The same is true of Phil Worral from Nottingham. He reached VIP status with multiple online companies, and it was this that kept him returning for more gambling action. “The more you bet, the more you’ll get given free bets and the more likely that you give it straight back. It keeps you coming back”, Worral said.
And those are just two of the sufferers of gambling addiction who have made it out of the other end to tell the tale. Both were affected by the appeal of VIP programs, and it is this that campaigners have focused on. Many suggest that without such intense schemes in place, problem gambling in the UK would be reduced. Yet it is not solely the fact that people are getting addicted to gambling that is a problem. The fact that so many bookmakers and casinos rely so heavily on these VIP players is something else. Indeed, despite many operators receiving huge fines for VIP program failings they still persist in offering them.
The Reliance on VIP Players by Online Platforms
A report from 2020 suggests that online gambling sites have a heavy reliance on VIP players over those who are considered as standard recreational bettors and gamers. That secret report, which was obtained by The Guardian surrounded the subject of a consideration by the Gambling Commission over whether VIP schemes should be banned or not. Within the report, it was discovered that one platform took 83% of all of its deposits from just a 2% share of its registered users. That 2% represented a collection of VIP players, who were all depositing high amounts.
This report revealed the extent by which such gambling sites actually rely on VIP customers more so than anything else. And at the same time, the awarding of VIP status to customers was noted as being a factor in 7 out of 10 regulatory penalties handed out to operators by the Commission. These penalties were marked as being a failure to prevent gambling addiction. And it was this that led to the Commission placing much more of a focus on potentially banning VIP schemes.
The secret report saw the Commission collect information regarding VIP schemes operating at nine different sites. These brands are understood to be some of the UK’s largest. As well as the 2% providing an 83% share of deposits to one site, another took 58% of deposits from VIP players, making up a 5% share of the customer base.
A secondary problem could be caused by the banning of online VIP schemes – while gambling addiction could decline, industry revenues would also likely go spiralling downwards, too. Not good for the gambling operators and, subsequently, not good for the UK government tax coffers.
At the same time, that report put a figure to the number of problem gamblers currently active in the United Kingdom. It said that, at the time, the UK is host to 47,000 VIP gamblers, and about 8% of that number are thought to be addicted to gambling. And that figure stood as more than 11 times the number of such amongst the wider public.
Meagre Restriction On Schemes in 2020
Everyone knows that 2020 was a year of unparalleled chaos, thanks to the impact of the coronavirus pandemic. The gambling industry was also impacted by this, with venues closing their doors for multiple months, players resorting to the online world as an alternative and a set of new measures being brought into play. These were thought up by the Gambling Commission as a way of protecting players during the UK’s lockdown.
One of the measures that was introduced was a restriction on bonus offers being given to players. Prior to this time, VIP players were still being sent emails by gambling companies, even if they had shown signs of addiction or harm. This clampdown took a hard line against such practices though, considering it was expected that players would spend more time accessing online gambling activities during the COVID-19 lockdowns.
And could this be what has led to the government taking a hard line against such schemes once more? Ministers are thought to be looking at banning VIP programs altogether now, describing them as being completely “immoral”. Those discussions on VIP programs are occurring as part of the review of the Gambling Act in the UK. That review is due to be completed later on in 2021, and a White Paper is expected to be published that bans the high-roller schemes.
Plans for the ban on these programs have received Ministerial support, according to sources. While the Commission has made attempts in the past to further regulate VIP programs, they have actually been accused of not being tough enough. In October of 2020, bookmakers had to check that customers could afford the deposits and bets they were making prior to making them a VIP player. Yet, it seems as though more is required from legislation.
One of the campaigners on the issue of VIP schemes is former Tory leader, Sir Iain Duncan Smith. He welcomed the news of the potential ban on these programs, saying that it was “high time” such schemes were ditched. He marked them as “atrocious abuse, forcing people into debt; desperation by giving them incentive”.
At the time of the Commission trying to regulate the schemes last year, Labour MP Carolyn Harris marked it as a failure. She said that is clearly showed the closeness of the relationship that the gambling industry has with the Commission.
This hasn’t stopped it from handing out large fines to big-name brands in the UK, though. Companies like Paddy Power and Ladbrokes have suffered under multi-million-pound penalties for targeting problem gamblers, sending them emails with tempting offers included in them.
Speaking on the potential decision for the banning of VIP schemes, one spokesperson for the Betting and Gaming Council (BGC) said that tough action had already been taken on such VIP accounts. He went on to say that the stricter code of conduct had already reduced the number of VIP enrolled gamers by 70%. Of course, that reduction doesn’t seem to be quite enough for campaigners, and Ministers are firmly behind the outright ban.
Industry Bosses Back Dissolution of VIP Programs
It says a lot when members of parliament are campaigning for something to be done about VIP programs. However, some industry insiders and brand bosses have also backed the dissolution of them. In an interview with Gambling Insider, Joonas Karhu, who is the Chief Business Officer for Bojoko, spoke of the need for them to be abolished entirely.
In the interview, Karhu said that he and his team at Bojoko were very much against the schemes. “If you look at the stats highlighted in our white-paper on such schemes, it is clear they are responsible for the vast majority of Gambling Commission fines where responsible gambling is a factor in the fine being awarded”, he said.
“More concerning, if you look at some of the headlines over the past few months with people stealing from employers to fund their gambling activity and, in the most severe cases, people falling into debt and taking their own lives, the scrutiny and calls for change are justified”, Karhu continued.
He went on to state that the adjustments made by the Gambling Commission in 2020 did not go far enough to tackle the impact of VIP programs. Karhu noted that the changes made should have been what operators were doing in the first place when such schemes were initially introduced. Things have now gone too far for that kind of adjustment to have any real impact on the programs, though.
Karhu proceeded on by saying, “For us, an outright ban on VIP schemes is the only way to properly protect players and especially high-value customers”.
When questioned over whether the complete banning of VIP schemes would push players to unlicensed operators or other offshore sites, Karhu negated that idea. “…so long as UK-licensed operators continue to offer them a top-rated experience and broad reach advertising. To do this, they need to continue to focus on content, payments, innovative features and excellent customer support”, he suggested.
As things stand at the moment, there doesn’t seem to be any way of regulating VIP schemes enough to ensure that a good adjustment of gambling addiction figures occurs. Therefore, an outright ban on the programs looks like the most sensible and backed route to take.
The only issues that could come from this is a vast reduction in the amount of revenue and profit that the operators take from players. With so many relying heavily on VIP players for higher deposits, will they be able to withstand such a change? There is also the risk that players that still want to spend large amounts gambling will now visit unlicensed sites that still offer VIP programs. This not only takes money away from regulated businesses it also puts the user at much greater risk given they will be afforded no legal protections under UK law should their money be stolen or their details sold.