Online Gambling Limits: The Cap Problem No One Has Solved

Jackpot

Regulating gambling is one of the most complicated but beneficial activities any government can get involved in. Whether it’s overseeing a state lottery or granting licenses for new online casinos, regulation is paramount to ensure a safe and secure gaming experience for players who want a flutter.

Over the last two decades, the surge in online gambling activity has caused a headache for governments when it comes to answer the question, ‘is online gambling legal in the US?‘. Legislation has had to be re-written to cover this burgeoning industry – and also combat a new black market that is even more difficult to detect than traditional illegal gambling.

While the likes of the UK, Sweden, Ireland, and Denmark have seen their betting economies boom in recent years, only now is online gambling in the USA catching up. States are seeking guidance on how to legislate for online gambling and what regulations to implement.

One high-profile regulation is monthly gambling limits, which aim to prevent problem gamblers from plunging into debt fast and gambling addiction. But how effective are bet limits, and what’s being done to implement them?

What Is A Monthly Gambling Limit?

A monthly gambling limit is effectively a deposit limit that an online casino or sportsbook puts on a player. Each month a player will be able to deposit a maximum amount of dollars and be unable to deposit any more.

The principle of the gambling limit – which is also enacted in some high street casinos – is to prevent a problem gambler from potentially losing too much money. In the online sphere, a casino can detect when a player has reached their limit via their profile data. What’s more, players can often set their own limits in order to help control their spending.

Problems With Betting Limits

While the idea of monthly gambling limits sounds beneficial on principle, the actual implementation of these restrictions is not easy. That’s because gambling limits are likely to apply to no more than 10% of a casino’s customer base. The rest don’t bet enough per month to require a limit.

What’s more, this 10% are high-rollers who account for perhaps 80% of a casino’s takings – and they are experienced in the system, whether they have an effective bankroll management strategy or not. They know, for example, that a monthly limit on one casino doesn’t affect the limit of another – and so many problem gamblers open multiple accounts across numerous casinos in order to beat the deposit caps.

Example: Say Michigan introduces a $250 monthly deposit limit. This prevents players in one online casino from depositing more than $250 in a one-month period. But it doesn’t stop them opening accounts with other online casinos and depositing the maximum there too. Four, five or even six accounts suddenly sees them depositing $1500 a month. The question for legislators, therefore, is how effective are deposit limits?

Pros
  • Help keep problem gamblers in check
  • Provides casinos with boosted protection
  • Helps prevent money laundering
Cons
  • Only affects 10% of all gamblers
  • Easy to open other online accounts
  • No technology to enforce country-wide
  • Can lead players to bet on illegal sites / black market

Another issue is the black market. High-rollers are smart and if they don’t like the new deposit limits, they will look for bigger opportunities elsewhere. This can directly result in the growth of black market gambling, where players join illegal and unsafe sites in an attempt to bet more.

What’s more, illegal betting steers much-needed tax revenue away from governments and makes it even harder for authorities to detect and successfully intervene in problem gambling.

What Can Be Done?

Deposit limits are effectively an easy win for politicians and regulators who implement them, but in reality, they don’t combat issues the players face. The main problem is that it’s almost impossible for a state or country to fully regulate deposit limits because there is currently no technology available that tracks a player’s spending across multiple casinos or sportsbooks.

The likes of Belgium and Germany are looking into these limits but also other regulations. Maximum bets, wait times between wagers, and greater investment in customer support are all considered beneficial to the player without negatively impacting the gaming experience.

Of course, one can argue that any regulation incentivizes players to seek alternatives on the black market, and a fully unregulated gambling sector would likely have disastrous consequences. But regulators and casinos are swiftly realizing that heavy-handed restrictions – as well-meaning as they are – don’t always work in a globalized world.

Back To Top
Back To Top