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Advisory Board for Safer Gambling (ABSG) advice on proposals for a voluntary code on deposit thresholds

ABSG has given advice to the Gambling Commission in regards to the introduction of an industry measure using net deposit thresholds.

Published
4 February 2025

Last updated
4 February 2025 - Changes

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Contents

ABSG comments on the proposed net deposit threshold set by operators

The comments from Advisory Board for Safer Gambling (ABSG) are as follows:

  1. The scale and type of spending limit options include loss limits, deposit limits, maximum bet limits and time limits. We are unclear as to why net deposit thresholds are being suggested by the industry as an interim voluntary measure.
  2. Deposit limit use by consumers is not universal. Industry sources estimate that approximately 400,000 accounts in the UK set voluntary deposit limits every month (opens in new tab). Forrest and McHale’s study found that a fifth of customers set limits (opens in new tab), and Auer and others1 found only 8.3 percent of their sample of 175,818 players set voluntary limits (opens in new tab).
  3. Weekly deposit limits are mandated in some jurisdictions and vary considerably (for example, limits are £214 across all operators in Germany, £685 in Austria and £397 in Norway).
  4. A recent and widely referenced randomised controlled trial in Finland (opens in new tab) concluded that prompting online gamblers to set voluntary deposit limits did not affect subsequent net losses compared to gamblers who were unprompted. Customers most at risk of a limit chose either not to set it, or chose an ineffective limit size, or removed it altogether.
  5. Behavioural Insights Team (BIT) research (opens in new tab) on the use of deposit limits as a ‘safer gambling’ tool also found that only a fifth of account holders used deposit limits, 1 in 3 set limits of £50,000 or more, and a free text approach rather than drop down menu with high anchors was the most effective method of limiting spend. Despite these findings, operators did not implement the recommendations on free text.
  6. The international lower risk gambling guidelines (opens in new tab) developed by a cross jurisdictional group of experts using all the evidence available make no reference to net deposit thresholds, concentrating advice on gambling spend proportionate to household income, time spent gambling and type of gambling (Table 3 within the Appendix). Further evidence from these guidelines is shown in Table 4 in the Appendix on the relationship between increases in expenditure and harms. The White Paper also makes clear that consideration of a customer’s financial context rather than fixed thresholds alone should form the basis of effective customer interaction. The Financial Conduct Authority's (FCA’s) Financial Lives Survey (opens in new tab) suggests 24 percent of UK adults display low financial resilience, and 47 percent display one or more characteristic of vulnerability which may impact on their ability to manage their financial transactions.
  7. Independent studies conclude that mandatory gambling management tools are the most effective harm reduction and minimisation strategies, as voluntary tools, whether consumer or operator initiated, are not consistently applied and do not impact on those most vulnerable to harm.
  8. There is insufficient evidence from research upon which to base an initiative using industry threshold deposits, and a clear imperative for further Gambling Commission-led research along the lines outlined in our advice on 9 April 2021.

Specific questions on the proposal:

  1. There is no reference as to how this measure would be evaluated (Timeframe? How many customers? What type of interaction and when? How are operators satisfied that there is no risk of harm?)
  2. The voluntary code allows for a ‘suite of potential interaction types’ (paragraph 4), giving too high a level of discretion on how operators might act. What criteria would be used to determine operator actions?2
  3. There is no detail in this document as to what ‘recognition of the code’ in the Commission’s assessment work means in practice.
  4. It would be helpful to have clarity on what the evidence base for these thresholds was and how many operators were signalling a commitment to its delivery prior to implementation.
  5. Is there a risk that operator resources required to implement this voluntary code could impact on resources required for mandatory changes following the outcome of the Commission consultation?

Table 1: Summary of key international research on thresholds for lower risk gambling

Summary of key international research on thresholds for lower risk gambling
Source Gamble no more than this percentage of annual income Losses Frequency of play Spend per month Type of gambling Deposit limits
Canadian Lower risk gambling guidelines 2021 (opens in new tab) 1% Not included No more than 4 days per month Not included No more than 2 types Not included
Dowling and others 2021 (opens in new tab) 0.83% to 1.68% Not included 2.5 to 3 times per month £15 to £25 No more than 2 types Not included
Louderback and others 2021 (opens in new tab) 6.7% £22 per month Not included £143 Not included Not included
Zendle and Newall 2024 (opens in new tab) 2.3% £955 per year Not included £80 Not included Not included
Currie and others 2017 (opens in new tab) 1.7% Not included 8 times per month £44 Not included Not included
Hodgkins and others 2021 (opens in new tab) 1% to 3% Not included 5 to 8 times per month £70 3 to 4 types Not included

International studies suggest safe spending thresholds of 1 to 6.7 percent of gross annual income (mean equals 2.2 percent, median equals 1.6 percent). The average income of UK adults is £32,500. The proposed £5,000 net deposit threshold trigger for intervention per account is considerably higher than any evidence would support, and far exceeds any financial risk threshold set out by the Commission or in the White Paper. Furthermore, the Commission’s own evidence suggests that online gamblers hold 3 accounts and use 1.5 on a monthly basis. A fifth of 18 to 34 year old online gamblers hold 5 or more accounts and could, under these proposals therefore hold £25,000 or more on deposit before any operator intervention is activated.

Further evidence is provided by Zendle and Newall's (2024) data fusion approach (opens in new tab). This work recruited participants who completed the Problem Gambling Severity Index (PGSI) and then provided authorisation to share their electronic gambling expenditure via an open banking application. Therefore, like the Muggleton and others (2021) paper which looks at objective electronic gambling expenditure, this paper extends this by looking at expenditure levels at different levels of harm. It used Williams and Volberg (2014) PGSI categories (opens in new tab), where 0 equals no-risk, 1 to 4 equals at-risk and 5 or more equals high-risk. Additionally, this work used net-expenditure (deposits minus withdrawals), as its key measure of gambling activity, where Muggleton and others (2021) used only outgoing deposits.

The work found that no-risk gamblers lost an average of £196.95 a year, or £16.41 a month. At-risk gamblers lost an average of £955.21 a year, or £79.60 a month and high-risk gamblers lost an average of £2,506.91 a year, or £208.91 a month. Note that these are cross-operator figures, which for comparability to the proposed intervention values would require a fully-operational ‘single customer view’ mechanism (Newall and Swanton 2024) (opens in new tab), as recommended in ABSG’s advice to the Commission. The Commission’s recent work with Warwick University has highlighted the importance of looking at gambling expenditure across as well as within operator accounts in order to understand impact.

Another way of looking at this is to consider the 'at-risk' expenditure levels as being at the top end of affordable levels. The Zendle and Newall study also included data on estimated income, which enables some comparisons with existing international literature on lower-risk guidelines (Table 1). The at-risk sample in this study had a mean estimated income of £41,157.80, which meant losses of 2.3 percent of their income on gambling. By comparison, the high-risk group lost 5.9 percent of their income on gambling.

Finally, follow up calculations on the dataset used in this study looked specifically at what impact a £5,000 net deposit threshold with a single gambling operator on a rolling monthly basis would have (Figure 1). This calculation shows that only 2.6 percent of those at-risk of harm (with PGSI scores greater than 0) would be subject to an operator risk assessment. This represents a false negative rate of 97 percent, suggesting that the Betting and Gaming Council (BGC) threshold is set too high for these checks to have a meaningful impact in preventing gambling-related harm for the majority of consumers who are at risk of harm.

All of these figures suggest that the proposed intervention levels are too high. We suggest that a more meaningful way forward in the longer term is to work towards assessing direct measures of spend with each operator over each month to create a false negative curve which showed the relationship between spend and PGSI scores. This could be achieved through integrating Gambling Survey for Great Britain (GSGB) survey results with regular operator returns to the Commission, and would show where the threshold would have the most impact. Integration into GSGB would provide a better avenue for evidence-based regulation, as it would allow for representative sampling.

References

1 First author is owner of neccton ltd which sells the product mentor.

2 Jonsson and others (opens in a new tab) showed that a phone call was most effective in reducing losses and increasing the uptake of gambling management tools amongst at risk gamblers and yet Patterns of Play found less than 0.13 percent of customers received a phone call. Forrest and McHale concluded that the threshold for customer interaction across 139,000 accounts was too high.

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