• Harry Lang

All bets are off - Will new online gambling regulations make any difference to problem gamblers?


Originally written for Casino Beats

This week the UK government’s cross party group on gambling related harm (which includes such luminaries as former Conservative leader Iain Duncan Smith) has called for significant regulatory changes to protect vulnerable people against problem gambling. In short, the group is recommending sweeping and potentially game-changing amends across four particular areas of betting marketing and operations: -

  • A £2 stake limit on online slot machines

  • Removing the ability for punters to bet with a credit card

  • Restrictions on VIP accounts

  • An investigation into non-disclosure agreements

It’s worth noting that the Gambling Related Harm APPG is funded, at least in part, by a significant list of land-based casinos and amusement arcade owners who themselves suffered losses earlier this year when maximum FOBT bets were reduced to £2. Their ulterior motive, the level the paying field, is clear although there’s a chance their cause it altruistic.

Although this week’s proposals are unsurprising considering the reduction in land based FOBT limits, the depth of recommended limitations for online casinos will send shockwaves through the industry, most significantly on collective balance sheets of more than £5.5 Billion each year. Share prices across the online gaming industry slumped by more than £1 Billion at the news with significant drops for all the main operators. GVC Holdings (which owns both Coral and Ladbrokes) was down nearly 10.5%, William Hill fell more than 12% and Flutter Entertainment (Paddy Power Betfair’s parent) dropped 3.39%.

For non-bettors and those outside the industry, the proposed legislative changes seem to be reasonable in their objective and their motive laudable. Betting is still seen as a dirty word and the proliferation of problem gambling, whether it be sports betting, casino or skin betting is a serious issue in need of a full strategic rethink within the UK and to an even greater extent in less well-regulated jurisdictions in Europe and beyond.

The efforts by leading gaming operators in the UK, pulled together under the banner of the Senet Group, have so far met with a mixed (even damningly poor) response. It’s campaign ‘When the fun stops, stop’ is universally acknowledged to have been a busted flush. Liberal Democrat MP John Leech stated that the gambling industry needs to provide more comprehensive support to those at risk of problem gambling. He went further in his damnation in line with the opinions of many within the industry: -

“There is now enough proof that the crass ‘When The Fun Stops, Stop’ slogan is not working, and it could be exacerbating the national gambling crisis. It’s time to scrap the slogan because let’s be honest, by the time ‘the fun stops’, you are already dangerously addicted”.

Gambling firms have, for some time now, looked to learn from restrictions (both regulatory and voluntary) placed on tobacco and drinks companies over the past thirty years. Back in August the gaming industry took voluntarily steps to remove all betting ads from airing during live sport in order to defend children from the swathe of sports betting content being shown during football, cricket, golf and tennis broadcasts. The government tends to block advertising and marketing efforts for vice industries before moving onto product restrictions, so self-governance is a rational move to keep the online marketing lights on as long as possible.

The issue lies in the inevitable contradictions faced by any commercial entity when seeking to ‘self-police’ their behaviours for the long-term benefit of customers. Most experts in the industry appear to share the belief that problem gambling would be better mitigated via a blend of education, technology and operational guidelines designed to seek out ‘at risk’ punters, make them aware of what dangers they’re facing and to allow them to self-exclude from all gaming sites with a single mouse click as and when they feel their betting has become a concern (but before it’s become an actual problem). The mindset has to be proactive and long-term if the gaming industry can ever hope to grow out of its dirty raincoat of a reputation.

Ian Proctor, the new CEO of Sky Betting & Gaming supported just such an approach when interviewed in October: -

“A few years ago, everybody who worked in the industry would have considered that it was up to the customer as an adult to make choices. That was the mantra. The shift has been to an almost paternalistic model where there is a moral obligation to think about affordability”.

Looking at the cross-party group’s recommendations there is a sense of knee jerk response related to the proposals as opposed to rational, player-centric policy: -

A £2 stake limit on online slot machines

Anyone who has worked in casino marketing or management knows where this leads – and prohibition offers a clue to everyone else. There are punters out there who won’t get their rocks off to a two quid bet, so they’ll use a VPN and find an offshore casino site who will be more than willing to take their action.

Being offshore these sites don’t operate the same protocols as UK licensed entities, so these players will be more at risk of data breaches, fraudulent activity and bankroll theft than they are right now. Add to that, the offshore sites don’t give two hoots about identifying and protection problem gamblers and this suggestion starts to look less like a good idea and more like a dangerous precedent.

An end to betting by credit card

It’s hard to argue with this policy as credit cards are more likely to be used by those who struggle to find actual money to bet with. That said, credit cards can be used to buy everything else online from alcohol to pornography, so nanny stating gamblers across the board looks like avoiding the root causes of problem gaming and the subsequent fall out.

As with the stake limit, a problem gambler who can’t bet with a credit card will go to the next available options – payday lending companies (with their oh-so-attractive 1000% APR) or money lenders. Remembering that betting is rarely sure-fire way to turn a profit neither of these options sound like they’ll end well for an at-risk gambler.

Restrictions on “VIP” accounts

As noted above, gaming has followed the well-trodden path behind previous vice industry pathfinders, alcohol and big tobacco. In both of those industries regulation of marketing came first (ad bans and then dark markets) before product restrictions were introduced (on pack warnings and naming conventions, for example ‘Light’ cigarettes. In the online gambling world, most casinos will make 95%+ of their revenue from the most valuable 5% of customers, so VIP management is critical. The majority of new punters deposit once only in response to supposedly appealing welcome bonuses (which should be banned wholesale, but that’s another discussion) so churn is a constant problem and retention of VIPs is an absolute necessity for operators hoping to remain competitive and profitable.

Once again, this proposal runs the risk of ignoring high value problem gamblers (who can afford to lose) by employing a broad-brush policing approach. The policy should hinge on identifying ‘at risk behaviours and actively seeking out problem gambler across the board and if operators can’t be trusted to do this themselves then the legislation needs to be designed to fit around the current customer behaviours, not employed as a carpet bomb, cover all piece of legislation.

In short, they need to employ advisors from within the gaming industry to help them create policy and mandated legislative frame works.

An investigation into non-disclosure agreements

In January 2019 the Gambling Commission outlined its concerns that operators had been using NDAs to block customers from flagging up nefarious behaviours to the regulator. This is pretty concerning stuff and out of the four proposals, there can be no doubt that anything that hinders communication and the fixing of issues is a very bad thing. The fact that this concern had to be raised in the first place perhaps demonstrates how far the industry is from effecting a successful self-policing protocol for all licensed operators.

The report suggested that it was time for the Gambling Act 2005 to be replaced, stating that the existing law was ‘…analogue legislation in a digital age’.

Funded by a consortium of vested parties including anti-online gambling campaigner Derek Webb, gaming industry association Bacta, Hippodrome Casino and the Gauselmann Group amongst many other land-based operators, the Gambling Related Harm All-Party Parliamentary Group has access to the most astute experts in the industry before making their concerns heard. I strongly suspect they’d be pleasantly surprised at just how many gaming industry workers are actively seeking to market to those who bet what they can afford to lose and ultimately reduce the number of problem gamblers.

Whether it be marketing legislation or operational guidelines, somebody in charge at the cross party group needs to spend more time challenging and collaborating with executives and experts from the gaming industry so when new laws are put into play they are done so exclusively for the benefit from the customer and given a chance in hell of being successful in reducing the number of problem gamblers.

That said, the industry did itself no favour whatsoever when the CEOs of the three biggest operators concerned didn’t bother to show up to their Gambling Related Harm APPG round table meetings in September but as of the 6th November, ten of the major UK operators have gone on the front foot with the creation of the Betting & Gaming Council, a voluntary body that replaces the Remote Gambling Association.

The CEOs from Aspers, bet365, Caesars, Flutter, Genting, GVC, Playtech, Rank, Sky Betting & Gaming and Will Hill have all signed up to a new set of guidelines which support the objectives of UK Gambling Commission’s National Strategy to reduce gambling harms.

The mandate of the new body demonstrates a new, astute and fitting collaboration to promote better behaviours in the online gaming industry in five key areas:-

  1. Prevent underage gambling and protect young people

  2. Increase support for treatment of gambling harm

  3. Strengthen and expand codes of practice for advertising and marketing

  4. Protect and empower customers

  5. Promote a culture of safer gambling

Now, it seems, the industry is collectively collaborating to achieve a common goal of being ‘good’. Protecting ‘at risk’ consumers is a core requirement thus ensuring the longevity and reputation of the wider business. It’s a bold and necessary step and one that should be applauded.

Harry Lang is a strategic brand and marketing consultant and founder of Brand Architects specialising in the online and mobile betting space.

You can get in touch with him at Harry@BrandArchitects.co.uk or via Linked In

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