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The UKGC has implemented regulations that specifically target slots and others that are aimed at the larger online gambling industry over the past three years. Do these regulations threaten the online slot industry?
Increasing regulatory environment
The UKGC has increased regulation speed since 2020. They are taking stronger action to protect players by enforcing licensing conditions and implementing codes of practice. Slots are the most played casino game in the UK and they have the highest average loss per player (according UKGC data, the average monthly spending for a slot player is PS67, as compared to PS36 for casino products or PS45 for real-event betting). Many of these regulations focus on the features of slots gameplay like spin speeds and feature buys.
The UKGC announced in 2021 a “package of changes” and strict measures to’strengthen protections and controls’ for online gamblers. This would make the games less intensive, safer and give players more control over gambling. The new rules also included a ban on:
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Quick spin features or those that make it appear that the players have control over the outcome of spins.
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Speeds faster than 2.5 seconds.
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Autoplay could cause players to lose track of their spins and spend.
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Images, sounds and animations that create the illusion of winning even though the staked amount is lower.
Additionally:
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The total win and lost amounts for a session must be displayed on
The UK also banned reverse withdrawals, which allowed players to request money to withdraw. Credit card use at UK-licensed online casino was also prohibited. Also, affordability checks were introduced.
It’s been a very stressful three years for both operators and developers of slot machines. The government is updating the 2005 Gambling Act in order to adapt it for online gambling. This update will introduce additional affordability checks, possible per-player budgets and slot stake limits. It also allows for information sharing across operators. The update will undoubtedly bring new regulations to slot sites such as changes in the advertising and offer of bonuses.
What has the regulatory environment in the UK had on the UK’s slots industry?
The UK’s slots industry 2020-2023
The UK’s online slots industry is made up of hundreds of developers who release new titles every month. It is one of the most competitive markets in the world, with more than PS2.9Billion in gross gambling yield (GGY).
To see how the market has changed, the UKGC recently released operator data. It compares Q3 from the financial year 2022-2023 with Q3 2021-2022. The data on online slots showed:
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The GGY for slot machines in 2022-22 was 2% higher than 2021-22. However, the total number bets and spins rose by 8%.
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The average monthly active account has increased by 13%.
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The number slots sessions that exceed 1 hour increased 11% to 9 million, the highest figure in UKGC data.
Although the data is provided by operators and does not include all UK operators it provides a good snapshot of the industry. It shows an increase in spending and the number of active players as well as a growth of longer playing sessions.
These figures are supported by data from the UKGC’s statistics, which capture the whole market. It shows that online slot GGY did not drop between 2020, 2021 and 2022. This indicates that the financial impact of these measures has not been significant on the online gaming industry. The data doesn’t account for players who played online during the COVID pandemic closings. This may have obscured the effects of the above span regulations.
These financial data are in contrast to the view of industry operators, primarily the Betting and Gaming Council (BGC), who have produced research that argues that an increasing regulatory environment is associated with offshore gaming growth. When compared with figures on offshore gambling revenue and case studies from European gambling jurisdictions like Norway, where there are tighter regulations and a bigger offshore market, the BGC’s research is convincing. It does however acknowledge that there is no correlation between the rise in UK offshore gambling and specific policies.
Innovation
Finance aside, lowering the speed of play and banning bonus-buy or auto-play features can impact player enjoyment by slowing games down and reducing risk. Developers may feel more restricted if there are more regulations. This can lead to a lack of innovation and discourage developers from focusing on emerging markets like the US.
There is no evidence that game developers or sites selling slot machines are leaving the market. The new rules have not slowed down the pace of innovation. There are still a lot of UK slots being released each month, and there are many new mechanics, bonus features, and ideas. Many developers are using localization techniques to create a version of the game that is suitable for UK players. This includes one version for international markets, with no feature-buy, autoplay, and reduced spin speeds span>
Finding the right balance between safety and revenue
Gambling operators and stakeholders have been asking if UK regulations go too far. They are becoming prohibitive for the industry and encouraging offshore gambling. This depends on your attitude. Both revenue generation and player safety don’t have to be in conflict. They can complement each other and even work together. Online casinos can grow revenue and protect player safety. Regulators must recognize and understand the importance of this balance if they want to see the industry continue to thrive.