Newly-released UK Gambling Commission data suggests that some online gambling operators rely almost entirely on small groups of high-rollers, as controversies about VIP treatment of gamblers rumble on.
An internal slides presentation included a chart that said one operator got 83 percent of deposits from 2 percent of its customers, while another got 58 percent of deposits from 5 percent of its customers.
About 8 percent of the country’s estimated 47,000 VIPs are believed to be problem gamblers, or more than 11 times the rate of the total public, according to the Guardian newspaper, which obtained the data through a freedom of information request.
In the past year, the Gambling Commission has been cracking down on problems associated with high-rollers, such as operators who were slow in determining that a VIP customer’s funds were stolen.
Seven of ten fines issued last year had included award of VIP status as a factor, the commission said.
“We have been taking action to address poor practice around the treatment of VIP customers for some time,” a Gambling Commission spokesman said.
“Operators must improve their interaction 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.”
The Gambling Commission currently does targeted compliance checks, and has pressed the industry to develop a code of conduct including VIP policy, according to the slide presentation, which has been released to GamblingCompliance.
It also assesses operators’ policies and procedures and audit processes, along with key personnel, marketing policies, compliance and overall management.
The commission is considering a range of potential actions, including banning VIP status, limiting enticements, controlling how VIP managers are paid and instating mandatory regular interventions, according to the presentation.
But the commission’s slide presentation notes that although the importance of VIPs cuts across the entire industry, the data “is not necessarily representative of the online industry as a whole”.
Five of nine operators cited in the commission’s bar chart released last week had more than 30 percent of VIPs as a percentage of deposits, with 5 percent or less as a percentage of customers. But two of the nine operators generated only 1 percent of deposits from VIPs.
The commission did not identify any of the firms, nor disclose their sizes.
One gambling consultant, David Clifton of Clifton Davies Consultancy, said the information supplied in the Guardian article “does not show that the betting industry ‘relies on problem gamblers,’ as the headline claims”.
“It instead indicates that, at differing levels between bookmakers, small proportions of customers are responsible for relatively much higher proportions of betting account deposits,” Clifton said.
“There’s never been any great secret about that, any more than there being no secret that the latest (Her Majesty’s Revenue and Customs) statistics show that the top 10 percent of UK taxpayers are liable for more than 60 percent of total tax.”
Change is almost certainly coming in UK gambling law.
The Conservative government, which returned with a majority on December 12, has promised to “legislate to make the UK the safest place in the world to be online”.
It also pointed to changes in gambling laws, saying “the Gambling Act is increasingly becoming an analogue law in a digital age”.
The Guardian quoted Labour member of parliament Carolyn Harris, who heads an informal parliamentary group on gambling, as saying “this report shows how completely reliant the industry is on people with gambling problems and that they are profiteering from them”,
Former gambling and sports minister Tracey Crouch, a Conservative, said: “It’s taken time, but pleased that [the Gambling Commission] has acknowledged the pernicious nature of these schemes.”
Brigid Simmonds, chair of the newly formed lobbying Betting and Gaming Council, said: “Our industry recognises the need to change practices in this area and we will soon publish the terms of a review for a new industry code of conduct. We intend to consult widely on shape of this new code, to ensure we are always putting the welfare of our customers first.”