EMBARK ON SPACE ODYSSEY WITH BGAMING’S ALIEN FRUITS

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In the last three years, regulations specifically targeting slots and those aimed at the wider online gambling industry have been implemented by the UKGC. Are these regulations suffocating the online slots industry? 

Growing regulatory environment

Since 2020, the UKGC has ramped up the pace of regulation, taking firmer action to ensure that licensing conditions and codes of practice protect players. As slots are the most popular casino games in the UK, and have the largest average loss per player (according to UKGC data, the average monthly spend for a slots player is £67, compared with £36 for casino products and £45 for real event betting), many of these new regulations have focused on features of slot gameplay, like feature buys and spin speeds.

In 2021, the UKGC announced a ‘package of changes’ and strict measures that would ‘strengthen the protections and controls’ for those who gamble using online slots, making the games ‘less intensive, safer by design and hand players more control over their gambling’. The new rules included an outright ban on:

  • Quick spin features, or those that give the illusion that players control the outcome of spins.
  • Spin speeds faster than 2.5 seconds.
  • Auto-play, which could lead to players losing track of spins and spending.
  • Sounds, imagery or animations that give the illusion of a win when the returns are lower than the staked amount.

Additionally:

  • Slots must display the total win and loss amount during a playing session.

Around the same time, the UK banned reverse withdrawals (these allowed players to stake money they had requested to withdraw) and credit card use in UK-licensed online casinos. Affordability checks were also introduced. 

All in all, it’s been a pretty tense three years for operators and slot developers, and the pace of regulation is not slowing as the government is in the process of updating the 2005 Gambling Act to make it fit for the modern age of online gambling. The update is expected to introduce further affordability checks, potential per-player budgets, slot stake limits, and a single customer view that allows information-sharing across gambling operators. It will also inevitably bring new regulations for slot sites, like changes to the way bonuses can be offered and advertised.

So what effect has the growing regulatory environment had on the UK slots industry?

The UK slots industry 2020-2023

The UK online slots industry consists of hundreds of developers that release new titles each month – it’s one of the most competitive gambling markets globally, creating more than £2.9 billion in gross gambling yield (GGY) per year.

The UKGC has recently released operator data, which compares Q3 of the financial year 2022 to 2023, with Q3 of 2021 to 2022, to look at how the market has changed. In regards to online slots, the data showed:

  • GGY for slots in 2022-23 increased by 2% compared with 2021-22, but the total number of bets or spins increased by 8%. 
  • Average monthly active accounts increased by 13%.
  • The number of slots sessions over 1 hour increased by 11%, topping 9 million for the first time in UKGC data.

While the data is supplied by operators and doesn’t include all UK operators, it’s a great snapshot of what’s happening in the industry, showing an increase in spending, the number of spins and active players and a growth in longer playing sessions. 

Data from the UKGC’s industry statistics reinforce these figures and capture the entire market, showing that between 2020, 2021, and 2022 online slot GGY didn’t drop. This suggests that in financial terms, the measures have not significantly impacted the online industry (the data does not account for the number of players who swapped in-person for online play during COVID pandemic closures, which may be obscuring the effect of the regulations mentioned above).

The financial data contrasts with the viewpoint of industry operators, chiefly the Betting and Gaming Council (BGC), which has produced research arguing that the increasing regulatory environment coincides with growth in offshore gaming. The research conducted by the BGC is compelling when matched with offshore gambling revenue figures and case studies from other European gambling jurisdictions, like Norway, which have tighter regulatory environments and a larger offshore market. However, it does concede that the increase in UK offshore gambling cannot be correlated with specific policies. 

Effects on innovation

Finance aside, decreasing the speed of play and banning features like bonus-buy and auto-play can affect player enjoyment by slowing down games and reducing risk. In turn, more rules also place greater constraints upon developers, which may suffocate innovation within the industry and encourage developers to leave the market or focus on more emerging markets, like the US over the UK. 

So far, there’s no evidence of game developers or slot sites leaving the market. The pace of innovation also seems unaffected by the new rules, with the number of UK slot releases remaining the same and plenty of new mechanics, bonus features and ideas hitting the reels monthly. Rather than leaving the market, many developers have employed localisation techniques for the UK, developing one version of a game for international audiences and another for UK players (without feature-buy, auto-play and with reduced spin speeds).

Striking a balance: safety vs revenue

With more regulation and perhaps even stake limits expected in the upcoming white paper, gambling stakeholders and operators have questioned if UK regulations are going too far, becoming prohibitive to the industry and increasing the incentives to gamble offshore. The answer to this depends on attitude. Revenue generation and player safety do not need to be at odds with each other – they are not mutually exclusive and can align. Online casinos can be successful, growing revenue while putting player safety first. Still, there must be a balance, which must also be acknowledged and understood by regulators if the industry is to continue thriving.

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