The pros and cons of capped wagering requirements on UK bonuses

The Gambling Commission’s decision in March to impose a max 10x wagering requirement on all online casino bonuses is a significant moment and one that has left the industry divided. Capped wagering requirements is something I’ve been calling for the regulator to do for some time now, as I believe it’s one of the most effective ways of preventing players from gambling beyond their means. Wagering requirements literally encourage players to bet more.  

It’s also going to mean a much better experience for the player, especially for more casual customers who often don’t understand what wagering requirements are or how they work. All they know is the casino doesn’t let them withdraw their bonus winnings and this makes them distrust the brand.  

But while there are plenty of upsides to the decision, there will absolutely be some drawbacks, too. The value of bonuses will likely diminish further and it’s not unreasonable to expect some smaller brands to seriously question the viability of the UK market. 

Below, I’ll dig into the pros and cons of capping wagering requirements in more detail. But first, let’s just remind ourselves of the requirements the Gambling Commission will impose and when those requirements will come into force.  

A quick look at the new rules  

The Gambling Commission’s new rules on wagering requirements are part of a wider package of changes to bonusing that will come into force in December this year. This includes banning operators from offering “potentially harmful” bonuses where customers must carry out two or more types of gambling, such as betting and playing slots.  

In short, it’s preventing multi-vertical operators from running promotions that cross-sell players between their online sportsbook and their online casino. This is what the regulator had to say about why it took the decision to ban cross-sell bonuses: “Evidence shows consumers are more at risk of harm when they gamble on multiple products rather than a single product. There is also the risk that mixed product promotions confuse consumers because of complex terms and conditions. 

“The ban is aimed at reducing harm and boosting fairness and openness.”  

The second part of the update refers to wagering requirements and limiting the maximum wagering requirement to 10x. In its update, the regulator used an example of an online casino bonus with a 50x wagering requirement – if the player won £10 with the bonus, they’d need to wager £500 back through the casino before they could withdraw the £10 bonus winnings as cash.  

The Gambling Commission said such high wagering requirements “could confuse consumers and lead them to gamble for longer, and faster, than they are used to”. Capping the wagering requirement to 10x, the regulator says, “decreases the likelihood of harm, reduces complexity and improves transparency while maintaining consumer choice”. And I agree on all those points. I also think there are plenty of upsides for online casino operators, too. So, what are they?  

Capped wagering requirements – the pros  

The cap means that all licensed online casinos in the UK will become low wagering casinos and, at Comparasino, we are already seeing a lot of demand for this type of site. Typically, low wagering casinos are those with requirements of 30x or lower, but from December, that threshold will be reduced to 10x or lower.  

This presents a tremendous acquisition opportunity for operators, especially those who take this one step further and become no wagering casinos. Operators have struggled to differentiate through bonusing – most now offer a standard 100% deposit match and free spins – so the cap opens up the option to do away with wagering requirements entirely to really stand out.  

This approach has been pioneered by PlayOJO, and with huge success. The upsides go beyond acquisition and into the realm of retention. This is an industry where customer churn remains high, with players often becoming frustrated with the experience they receive at online casino sites.  

While a lot of this comes during the onboarding stage, with many steps to complete and no end of information and documents to provide, once they have signed up and deposited, the experience they receive continues to fall short of expectations.  

This includes things like slow payouts and poor customer support, but wagering requirements are one of the strongest contributing factors in their dissatisfaction. And this is why at Comparasino, we are seeing so many players searching for low and no wagering casinos.  

Now that operators are mandated to impose low wagering requirements, I strongly believe they will see retention rates improve, especially if they can smooth out other friction points during the sign-up process and improve withdrawal speed.  

If they do, this will help to foster greater trust between the player and the online casino brand, which again will improve acquisition and retention.  

Players still lack trust in the online casinos they sign up to and play at, and this is why so many use online casino comparison sites such as Comparasino to find reputable brands to engage with. Capping wagering requirements, in my opinion, will do a lot to overcome these trust issues. 

Capped wagering requirements – the cons  

Of course, where there are upsides, there will always be downsides and there are some drawbacks to consider here.  

My biggest concern is that operators will further water down the value of the bonuses they offer to players to the extent that they have next to no value. Even now, we have some brands listed on Comparasino where the value of the bonus is under £5.  

This is OK if the casino offers a really compelling experience across other areas – streamlined sign up, good choice of payments, great selection of games, rapid payouts, gold-star customer support, etc – as all the bonus needs to do is convince the player to give the casino a go.  

But if it doesn’t, players will continue to churn and possibly even turn to unlicensed sites for bigger bonuses. I’ve said this before, but I’ll say it here again – I’m not convinced most casual players really understand what it means for a casino to be licensed, so they will favour an unlicensed brand with a more generous bonus offer should they come across one.  

Another potential issue is that some operators, especially smaller brands, will see this as leading to another tightening of their margins, which will force them to question the viability of the market.  

We are only just seeing a wave of new brands launch in the UK after uncertainty around the white paper led to a bit of an exodus, so it would be a shame to be back in that situation again. For a market to be strong and to thrive, consumers need choice. I don’t think that will ultimately come to pass, but we can’t be naive to the possibility, either.  

Does this set a new standard for bonus T&Cs?  

Pros and cons covered, it’s worth asking the question whether the Gambling Commission’s capping of wagering requirements sets the standard for other regulators to follow. While it’s too early to tell if the move will be a success, we can certainly compare the upsides to the downsides and, for me, the former trumps the latter.  

You only need to look at brands like PlayOJO to see how lowering wagering requirements or, in its case, doing away with them entirely, can give you a competitive edge while delivering an experience that not only meets but exceeds player expectations. Transparency and fairness matter to players, and what better way of demonstrating that than by offering bonuses that are exactly what they say they are.  

Bio

Martyn Hannah is the co-founder and managing director of online casino comparison site, Comparasino. He has spent more than 10 years in the industry, latterly as a marketing consultant for operators and suppliers. This experience allowed him to launch Comparasino.