Online gambling and limit setting

By Luke Duffy

The online gambling pre-commitment system established under the National Consumer Protection Framework (NCPF) requires wagering providers to prompt customers to set a deposit limit when opening a betting account, and annually thereafter. Customers, however, can opt-out of the voluntary system, which took effect in May 2019.

A deposit limit restricts the amount of money a customer can transfer into a betting account within a specified period (e.g. per day, week or month), and is binding. This means that once the limit is reached, the customer cannot top up the account until the relevant period ends.

In an analysis of the account data of almost 40,000 Australians who gamble online, researchers from the University of Sydney found that while limit setting had increased since the system was introduced, only 15.8 per cent of the sample had set a deposit limit.

The data showed few differences in demographics or gambling behaviour between those who used a deposit limit and those who did not, suggesting that customers at high risk of harm are no more likely than others to set a limit. The majority of customers who set a limit made no subsequent changes in the 12-month study period, however most of those who did alter their limit either increased it or removed it altogether.

… customers at high risk of harm are no more likely than others to set a limit.

Another University of Sydney study measured the success of messages used to promote deposit limit setting, as well as the effectiveness of limit setting in changing gambling behaviour. They found that just 0.7 per cent of customers who received an in-account notification or email message set a deposit limit, while only those considered low or moderate spenders seemed to derive benefits, e.g. a reduction in spending, losses and gambling intensity. The researchers also noted it was possible some customers may have continued betting with other operators after reaching their limit, and thus may not have reduced their gambling.

Researchers from CQUniversity have found that even among people who regularly gamble online, most don’t set a deposit limit. Consistent with the aforementioned research, messages have had minimal impact on limit-setting behaviour, intentions or attitudes, and again, those who change their limit are more likely to increase, rather than decrease it.

… customers may have continued betting with other operators after reaching their limit …

More than 90 per cent of those in the CQUniversity study who set a deposit limit reported that it was helpful. However, many set a limit that appeared too high to affect their behaviour: more than a third of respondents set a deposit limit that was at least double their usual amount; 34.8 per cent set a limit equal to their usual amount; and only 13 per cent set a lower than usual limit. Consistent with this, 37.2 per cent reported that their deposit limit had never restricted their gambling behaviour in the past year. However, a quarter (25.7 per cent) reported their limit had stopped them from gambling once a week or more, suggesting that a limit can be effective if set at an appropriate level.

The most obvious strategy to increase uptake is to introduce mandatory limit setting. Given the tendency for some people to set excessively high limits, default restrictions could be considered. A soft limit could be used to force customers to opt-out, rather than opt-in, or a hard limit could be applied that would require proof of a customer’s financial capacity to be exceeded.

The most obvious strategy to increase uptake is to introduce mandatory limit setting.

The establishment of a centralised pre-commitment system for online gambling would improve the effectiveness of limit setting. Unlike the systems planned for pokies in Tasmania and Victoria, in which a single account will apply to all machines in the state, online gambling customers wishing to place limits on their betting must do so with each individual operator. This means that someone who wishes to continue gambling after reaching their limit with one company can simply switch to another. A system that allows a limit to apply cumulatively across all betting providers would help counter this deficiency. The recently released report of the Commonwealth parliamentary inquiry into online gambling recommends that the evaluation of the NCPF examine the utility of such systems.

… setting a deposit limit has the potential to be a useful harm minimisation strategy …

Restrictions on advertising and inducements, also recommended in the Commonwealth report, might further assist by alleviating customer fears of missing promotions, which may discourage limit setting. Measures that increase the ‘friction’ involved in increasing or removing limits, such as requiring customers to call or text an operator, could also help to mitigate regular changes.

While setting a deposit limit has the potential to be a useful harm minimisation strategy, most customers do not do so. For those who do, the effectiveness is often undermined by a limit that is too high, a tendency to increase or remove the limit, and the lack of a centralised system. A range of strategies is needed to overcome these challenges.