Any gambling operators with licences in the UK will soon be required reform and improve the manner with which they relate to their high spending customers. This initiative follows the publication of confidential data illustrating the habits of their controversial VIP schemes, also referred to as loyalty programmes.
For those not part of such a scheme or programme, these are designed to reward high paying and regularly returning customers with “rewards” such as free bets, cash back, sporting event tickets and other prizes.
A report in the Guardian, which was obtained through a Freedom of Information request, shows the United Kingdom Gambling Commission (UKGC) harvested data from nine operators, all of which were granted anonymity by the watchdog. However, it is understood these are all large and well known gaming operators and the truth is that many such operators have become heavily reliant on problem gamblers and high-spending VIP customers, with their wagers now accounting for £4 out of every £5 wagered.
Disproportionate Amounts Of Income
What the report found is that, while VIP customers accounted for just 2% of one operator’s client base, they still made up 83% of overall deposits. At another company, 3% of VIPs accounted for 48% of overall deposits, while a third operator consumed 58% of total deposits from these schemes despite them only accounting for 5% of its overall customer base.
This, the study found, is because VIP gamblers are more likely to be addicts than regular punters. Which is why the practise of rewarding big spending punters with incentives by inviting them to become members of a VIP scheme is widespread in the UK and is designed exclusively to motivate clients, however problematic, to continue wagering.
8% Have A Gambling Problem
Of the United Kingdom’s estimated 47,000 VIP gambling customers, 8% are thought to be problem gamblers, more than 11 times the normal rate. Worryingly, the UKGC also found that that the algorithms employed by online gaming operators are far more efficient at identifying potential VIP customers than they are at detecting problem bettors.
The report also concluded that, when it comes to regulatory penalties issued to companies by the UKGC for failing to prevent or curb problem gambling, VIP status has been named as the major influence in seven out of 10 cases.
Prior to the recent UK general elections, each party promised to review and reform the 2005 Gambling Act. The winning Conservative party, which has already reneged of several pre-electoral pledges, described the Gambling Act as “increasingly analogue in a digital age” and ran on a manifesto promise to “make the UK the safest place in the world to be online”.
A spokesman for the Gambling Commission told the Guardian;
“Operators must improve their interactions with VIPs and we have challenged the industry to make faster progress to improve how they manage their customers. We have also taken robust action against operators who fail to protect consumers and we will be even tougher if behaviour does not change.”
Call To Reform
In calls to reform these practises and minimise future harms, the report proposes measures such as developing a harsher code of conduct for VIP schemes, undertaking routine checks on operators, limiting the rewards offered to high-spending customers and even banning VIP programmes altogether.
Such a ban might not be the only threat to the routine practises of online gaming operators. As put forward by numerous Members of Parliament in November 2019, a potential overhaul of online maximum online slots wagers could also be imposed soon. The plan would be to reduce max strakes to £2 per spin, the same as has been applied to the high street based fixed-odds betting terminals (FOBTs).