Could the UK Gambling Industry’s reliance on VIPs be its undoing?

Like real casinos, online casino sites generally like to reward players with benefits and bonuses to entice them back or make another deposit. This is generally done through reload bonuses or free spins, but the biggest honour of them all is to be awarded the title of VIP.

To achieve VIP status, players need to be frequent depositors, high rollers and, most importantly, big losers. VIP loyalty programmes often includes exclusive games, regular casino deposit bonuses or even exclusive VIP events at real casinos.

Whilst this may sound like a great relationship between the player and casino, VIP programmes have come under fire recently for enticing customers who have made large losses into spending even more, preying on problem gamblers for profit.

A report by the Gambling Commission has recently been uncovered by The Guardian which suggests that the industry might depend a little too much on these VIP players, which could spell disaster.

The Gambling Commission collected data on VIP schemes from some of the UKs biggest operators (though none were named), uncovering some interesting stats:

• One operator revealed that 83% of total deposits made on its sites were from VIP players
• These only made up 2% of its total playerbase
• On average, 50% of all deposits come from VIP players
• VIP players make up only 5% of these operators' gamblers
• The biggest gambling companies in the country rely on big spending VIP players for most of their deposits.

The report states that 8% of the 47,000 VIP gamblers in the UK are likely to be problem gamblers, which is 11% higher than the number of problem gamblers in the rest of the gambling population. The report shows clearly that the industry nurtures problem gamblers by incentivising deposits, which is something that operators should be aiming to reduce with the introduction of a new safer gambling initiative. 

The government recently proposed a ban on VIP schemes for online gambling sites to reduce problem gambling, which does make sense when you factor in how many VIP gamblers are at risk. However, considering the data that is highlighted in the report, a ban is also likely to have a negative effect on the industry as a whole.

By removing VIP schemes you also remove the incentive to deposit for 92% of these big spending players who aren’t problem gamblers, which means that around 50% of the deposits to some of the UKs biggest gambling operators could be at risk. 

If gambling operators in the UK don't find a way to move away from the potentially predatory VIP model, then the government ban could have a huge effect on player deposits and therefore overall profits.