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Is the future low stake?

18th June 2021

SBC Leaders: Contemplating the future of the online slot vertical with Ondrej Lapides.

The call for a limit on the maximum stakes on online slot games has been growing more vocal across a number of jurisdictions in a bid to overhaul online gambling and protect the most vulnerable players. Whether it is limits on the amount players are allowed to bet or the caps on the maximum allowed bet per spin, the recent review and debate about stake limits of online slots suggests the ground has shifted and the industry appears to be facing stricter measures going forward. 

In a feature published by SBC LeadersOndrej Lapides, CEO at Tom Horn Gaming contemplates the recent developments explaining why it is important to strike a balance between new regulations, player protection, industry growth and why the industry will have to take a far more faceted and complex approach to game development.

SBC Leaders: Entertainment is always front and centre of all igaming conversations, particularly with the ever increasing regulatory microscope that the industry currently finds itself under. With this in mind, could slots in particular become a more low-stake entertainment led vertical?

Ondrej Lapides: In recent months many jurisdictions including the UK, Sweden and Germany have introduced proposals for further regulatory changes on online gambling – temporary or permanent. 

Generally, regulators have good intentions and introduce these measures to protect players. 

On the other hand, with the economy crippled by the pandemic, stringent regulatory measures are also impacted by more complex recovery plans  governments embrace in order to offset the economic consequences of 2020. 

Either way, there has been a growing appetite for sweeping reform of the gambling industry. It started with the casino segment and I’m sure similar restrictions are not going away and will likely impact all verticals such as sports betting, horse race betting, poker, or virtual sports. 

The maximum stake limit is only one part of the equation. However, as such it might have far-reaching implications for the future of our beloved industry with online casino games likely to be stuck with the label of ‘low-stake entertainment’ sector.

There’s no doubt, operators and providers must adjust to the changing regulatory climate if they want to survive. What is, however, more important than ever is a more balanced approach that encourages collaboration of all stakeholders in order to find the best possible modus operandi. Otherwise, we might witness a detrimental effect of these changes on the industry resulting in negative economic ramifications on the performance of gambling companies operating in regulated markets, which can contribute to a stagnated economic growth in many areas, and the rise of black markets. 

It is important to reiterate that tighter regulations must strike the right balance between protecting the vulnerable, while not spoiling the enjoyment of millions of people who play online casino games on a regular basis in a safe manner and driving them into the arms of the online black market.

The latter is especially quite worrying as it will cause more harm to the perception of the industry in the long run.

SBC Leaders: Would you say that wider-mass appeal, but with a lower expenditure per individual, is the way that the industry is heading? And why? If so, what does this look like and would any sacrifices have to be made in terms of game development to achieve it?

Ondrej Lapides: Limiting online casino stakes won’t necessarily lead to gaming having a mass appeal to a wider population. The reason why players enjoy playing online slots is the variety of options, including bet values, slot games offer. Some favour low stakes, others find excitement in the thrill of wagering big amounts of money potentially leading to proportionally higher winnings. The beauty of online casino entertainment now is its diversity and the option to adjust the course of play to one’s circumstances, including a player’s salary or personal taste and preference.

Enforcing limits on the amounts players are allowed to gamble on online slot games is likely to see a decline in players as many of them, especially so-called high rollers, will no longer consider games with the lower stakes entertaining and will look elsewhere.

In order to retain players in different markets providers will have to differentiate their game development to comply with a number of measures. We will witness the rise of bespoke games supplying markets with tougher regulations such as the UK, whilst at the same time we will be prepping these same games for less ‘restrictive’ markets without depriving players of the full player experience.

I believe the industry will be able to stay sustainable through further strengthening their ranges of products and new verticals, whilst ensuring these are rolled out responsibly and adhere to national gambling regulations. 

As an industry we will have to take a far more faceted and complex approach to  game development.  For online casino games to remain the source of entertainment and enjoyment, we will have to look further afield to implement tools and solutions that will curb problem gambling. Transparency and accountability will be essential for the future of industry.

The reflection was originally published in SBC Leaders magazine, issue 14, as part of the article Will Online Slots Become a low-stake-entertainment-led ecosystem? on pages 46 – 48.

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