The concern about the protection of gamblers in the UK is the main reason for the proposed loss cap of £100 for gamblers. There has been speculation that the gambling industry players would create regulations to prevent customers from losing more than they can afford. However, that has not been the case. So the final proposal states that the cap will be at £100 for gamblers with a low income.
Does It Mean All Gamblers Can’t Play After Losing £100?
No. The proposal includes a vetting process that shows the financial capacity of gamblers. Players will submit their payslips or tax returns to show their income bracket. Anyone who cannot afford to lose more than £100 won’t be able to continue gambling. However, gamblers who have the money can continue gambling in online casinos even after incurring a loss of £100. There is an exception for gamblers who reinvest winnings from the casino. Players can bet and lose all the money they make on the platform, even when it is above £100.
The law aims to prevent unnecessary loss of funds for families who cannot afford it. It also discourages unhealthy gambling addicts by providing a vetting system. Also, gambling sites won’t be permitted to take credit card payments for deposits. Gamblers will need to find a new way to make deposits to their account. The same applies to PayPal payments. No online gambling platform will accept PayPal payments from accounts linked to credit cards only. The move will lower credit card fraud cases due to a lack of funds to cover gambling habits. Players will have to use PayPal accounts linked to bank accounts.
There is a maximum limit of £5 per slot game to curb overspending. Therefore, players can bet £1-5£ on slots games available in UK online casinos. The platforms are to increase their KYC activities when vetting new users. An establishment gets 72 hours to verify that a user is an adult and not a minor pretending to be an adult. The new KYC regulations are in addition to the proof of income that gamblers need to provide.
How Will The Regulations Affect The Industry?
The proposal aims to protect low-income earners from losing money that is useful in real life. It discourages players from taking credit and using the money for gambling. The vetting process makes it simple to identify the gamblers who need support to manage their gambling habits. The move will reduce the amount of money that online casinos make because most avid players are low-income players. A large number of gamblers won’t qualify to surpass the loss limit.
In an effort for the government to encourage local companies to maintain local online casinos, there is a proposal for a tax rebate for local companies. The tax rebate will be an incentive for local UK online gambling sites (see some local online casino examples at casinos.org.uk) not to exit the market. The higher taxes for foreign online gambling sites will also reduce the ease of penetration for international online casinos. The online casinos will be in a position to make money without leaving customers in deep debt.
What are The Possible Negative Impacts?
The new regulations could encourage the appearance of more illegal online casinos to meet gamblers’ demands against the loss limit. The Illegal online casinos can unfortunately seem attractive to gamblers with an addiction. The lack of regulation in the black-market online casinos will very likely lead to higher losses for the gamblers that the government is trying to protect.
Is the Proposal Achievable?
Yes. The bill proposes the use of readily available items for vetting like an ID, payslip, tax returns, or bank statements. Therefore, online gambling platforms can ask for regular things that mature adults possess. Online casinos use high tech software, and they are in a position to vet players to verify their financial capacity. The proposal’s passing will require online casinos to provide evidence of compliance with the vetting process and loss limit.
Is this a Good Idea?
The loss cap of £100 seeks to protect customers and families from enduring the effects of high gambling losses. Generally, the limit will reduce irresponsible gambling habits by people from the low-income bracket. It will ensure that individuals will only bet money that they can afford to lose. The online gambling industry in the UK is a trendsetter and adopting the proposal can lead to a change in the industry globally in the coming years. It is time that someone cared about online casinos’ customers, and the £100 loss cap on low incomes is a good start. But it is crucial that the illegal sites are stopped for this proposal to be a real success.
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