Spending cap of £100-a-month has been recommended by a think to British customers in order to help limit potential harms.
The Social Market Foundation has also called for a sweeping overhaul of the way gambling firms are taxed, to put financial pressure on companies registered abroad to bring their operations to Britain.
The cross-party think tank’s report, containing a comprehensive new framework of regulation and oversight focused on online, arrives ahead of a government review of the 2005 Gambling Act.
The report recommends new affordability checks, with a “soft cap” on spending where anyone wanting to spend more than £23 a week on gambling products would have to prove they could afford to lose the money without hardship.
The report also said that the stake limits on online slot games proposed by regulators should be set between £1 and £5. Non-slot online gambling games should face new restrictions on the way they are designed rather than financial limits, the SMF said.
The report also proposes a complete reform of the way gambling operators are taxed, to put greater burdens on firms based offshore in Gibraltar or the Isle of Man and reduce the tax faced by companies that bring their operations “onshore”.
The SMF said: “Gambling taxation should be redesigned around a system of incentives which reflect a company’s level of onshore presence. This means that operators could still decide to base their headquarters in locations like Gibraltar, the Isle of Man, or Alderney, but that decision would carry significant tax implications.”
The report’s lead author is Dr. James Noyes, a former adviser to Tom Watson MP. He said: “For too long, gambling operators have talked about the need to protect their customers, but have not worked together in order to make affordability checks a reality. “A fixed cap that applies across operators is the only way that consumers can be protected from harmful spend. Our proposed threshold sets the bar low enough to protect everyone, including those on low income, but is high enough to reflect the vast majority of gambling activity among the general population. Gamblers should be free to spend more than this threshold – but only after they show that their gambling is neither unaffordable nor harmful.
We need to see an end to the problem of offshore gambling tax avoidance. The message to online gambling operators should be clear: if you want to benefit from the British market, then make a commitment to being based in Britain.”