In a recent study, the UK Gambling Commission (UKGC) found that the number of VIP customers has dropped by approximately 95%. This sharp decline follows stricter regulations introduced in 2020, significantly curbing high-value player promotions.

So, what caused such a dramatic shift — and what does it mean for the future of VIP programs? Let’s break it down.

How VIP Promotions Work

Before the changes, many operators had VIP or loyalty programs for their regular players. You could earn loyalty points for playing at the site or establishment, which could be exchanged for various prizes. You could also level up and earn multiple benefits that increase with each level, such as:

• Cashback
• Discounts on hotel rooms
• Personal account manager

However, the UKGC was concerned these schemes would lead to higher addiction rates. It conducted a report published on January 2020, surveying nine operators. While VIPs comprised 2% of the customer base, they accounted for 83% of deposits. The UKGC determined it was time for new regulations.

New Rules in 2020

Working alongside industry representatives like Playtech, the UKGC developed several new rules. People under 25 would be banned from participating in VIP schemes, while anyone older would have to pass checks like due diligence before joining. Operators must monitor each player’s betting behavior, and the reward programs must be overseen by senior management.

New advertising laws were also implemented, such as banning incentives based on player losses. These changes were implemented in October 2020, and many casinos had to adapt. Before the changes, there were 42,349 VIPs among 22 operators, but that number fell to 1,616 VIPs across 18 by the period between April 2023 and March 2024.

New Study and Methodology

To assess the effects of this policy, the UKGC conducted a study, collecting data from 2024 and using the previous 2021 report. Its aim is to see if the new policy works and how it affects companies. Aside from online casinos, land-based establishments were also included, using:

• Industry data request
• Analysis of UKGC problem gambling cases
• Analysis of UKGC data and third-party complaints

The UKGC requested an industry data update to compare schemes from 2021 and 2024 and their Gross Gambling Yield (GGY). After that, the Gambling Commission examined various cases before and after the policy to see whether gambling associated with VIP programs has reduced. Finally, they also examined complaints received from third parties.

Current Situation

Currently, the number of VIP schemes has stabilized. While 55% of the 33 operators had such programs in 2021, it grew to 60% in 2024. All sites have also stopped offering incentives to specific customers outside of VIP programs. The median number of players enrolled in these schemes dropped to around 36 in 2021 but increased to 66 in 2024.

Despite some growth, the number of customers has not recovered to the pre-policy level. The data suggests that while the overall number of VIP programs has dropped by 95%, many operators have adjusted to the new rules and retained their promotions. The UKGC has also not received any recent complaints about the effects of the policy.

Remote vs. Land-Based Schemes

While the sample of land-based casinos was small, and no concrete conclusions can be made, the UKGC found an interesting trend. While remote casinos have had a decline in GGY from VIP schemes since 2021, land-based ones have seen a significant increase. That isn’t evidence of a violation, and it is likely to mean players find more value in land-based VIP programs.

One possible reason for this is that land-based casinos offer better bonuses. They can provide discounts on food and drinks at a bar or hotel rooms, as opposed to more funds for games. Land-based venues also have a lower gambling levy.

Among the 12 companies that provided GGY data, VIP schemes comprised only 1% of revenue for three of the biggest (£100 million GGY or more). Overall, such initiatives are no longer a significant source of income for casinos, as they try to move on from unsustainable VIP programs.

Safe Operation

The UKGC also checked how the casinos are operating their programs. Most of them conduct frequent KYC checks on their most loyal customers to ensure they don’t have financial troubles. Senior management is also responsible for these schemes, and new VIPs must pass rigorous checks. Some casinos even apply loss limits to player accounts.

When examining problem gambling cases, the UKGC noted some cases took multiple years to be resolved. There might also be a delay between the issue occurring and the UKGC taking action. Despite this, Despite this, there have been far fewer reported problems with VIP schemes. Only one case occurred in 2022, an issue that began in 2021.

Future Operation

Although the Commission had concerns that these policies could lead to unintended consequences, like pushing people towards illegal markets, this was not the case. Most operators have not noticed any issues arising from these policies. However, the UKGC has decided to monitor operators to be on the safe side.

Members of the Commission involved with examining cases will continue to look for any trends. If necessary, the UKGC will conduct another study on VIP schemes to see how the new rules are impacting the gambling market. Meanwhile, it will use this study, alongside the information from the Consumer Voice Framework, to improve its regulations.