More and more regions and throughout the world now understand the advantages of regulated gambling, like at no previous time in history, and the two core reasons for this are fairly simple.
Firstly, the impact of the pandemic on public finances across the globe has left both state and national governments, having shelled out billions protecting their citizens against this unexpected crisis, with budgets that have been decimated. Struggling to support essential services – and honour previous electoral promises – these officials are desperately seeking ways to generate revenue, and regulating (and taxing) gambling is far from the most difficult option to select.
Secondly, and perhaps related, is the fact that the current generation is more aware than any of its predecessors of the dangers associated with addiction, mental health and all forms of social inequality. In short, society has developed a conscience, and an increasing desire to protect each and every member within its own community.
Far from being political statements, these are simply pragmatic facts. If we are short of money, we identify the quickest – and easiest – ways to get it. And the trend towards protecting the vulnerable, and being ‘politically correct’, is now a fact of life. In the civilised world, we no longer accept that only the strong survive, we expect everyone to. It is a core principle of the original trades union movement; that the many will protect the few.
Getting ahead of the game
The relevance of this surrounds our industry’s need to educate and guide our regulators, as partners and not rivals. In order to ensure a healthy and prosperous future, the gambling industry must take the lead, get ahead of its opponents and be open, transparent, effective and authentic in its efforts to cement a mutually acceptable position.
There are no quick fixes for this challenge, and despite the instinctive desire to surpass last year’s numbers and cosy-up to stakeholders, now more than ever before we must play a longer game.
Many of us live in a place where tobacco and alcohol advertising and sponsorship are banned. Some of us even live in a place where certain foods and food outlets are subject to similar regulatory constraints, or soon will be. These are all far more widespread ‘leisure’ pursuits than gambling, and it would be naïve to believe that we will continue to ‘dodge the bullets’ as we have done for decades.
A previous UK Prime Minister once famously said, “Don’t bring me problems, bring me solutions”, and as previously mentioned, one such idea must be to get ahead of the game.
RKYC (Really Know Your Customer)
Over the years, there have been numerous studies conducted to identify potentially useful markers of harmful gambling behaviour using data sourced from operators. However, it is the industry itself that possesses the resources, the data and the capability to conduct such an ‘internal examination’ and implement effective defences… before anyone else decides that we are unable or unwilling to ‘self-police’ and that they must do it for us.
Examples of behavioural markers that the industry can easily and accurately identify from our own data include declined deposits, within-session repeat deposits, bonus-seeking, gambling at unusual hours and others, all of which can be further broken down into sub-categories.
None of this information is subjective – in contrast to self-reporting or self-exclusion – in the same way that frequency of play, expenditure by session and depth of specific product engagement can each be objectively monitored and measured.
Managing the minority
Despite any wider media furore surrounding responsible gambling, the truth remains that the overwhelming majority of all gamblers (95%+), online and land-based, spend and lose small amounts. But the fact that it is possible to identify the 3-5% who gamble very frequently, in multiple daily sessions and lose what are – for them – potentially harmful amounts is a huge risk to the industry’s future freedoms.
As a total non-believer in the cosy-sounding options of voluntary withdrawal or self-exclusion, I believe that the industry should – collectively – identify this tiny percentage and use all means available to intervene.
In the UK, there is talk of banks and other financial institutions considering acting on their own initiative, and downgrading customers who hold betting or gaming accounts. If this is not a frightening prospect then I do not know what is, as it would surely be the thin end of a very damaging wedge. The most effective way to prevent such a conclusion is surely to do their job for them, and exclude those customers that our data proves are at elevated risk?
Differentiation of risk
One question that has received significantly less attention is whether our objective data can be used to identify the variations in behavioural risk that can be associated with specific products. The honest answer, of course, is that it most definitely can. And this question is an important one because, ultimately, regulators have the authority to approve both products and features and decide what safer gambling standards should be applied to different products.
From the industry’s perspective, this is not to criticise or object to specific products or genres, but to emphasise where closer monitoring of player behaviour may be mission-critical.
Game structural elements such as event frequency, ease of access, bet types and maximum prizes are obvious risk factors. Games with shorter event frequency are proven to be associated with more bets per session and, therefore, potentially heavier losses. Studies have suggested that bets placed during events pose a higher risk than those placed beforehand. These factors suggest that there is potential for more detailed analysis of the differentiation of risk between products.
Constant operator diligence
It is a universally accepted fact that the most popular online products by participation are slots. The various segments of sports betting follow, with table games, poker and bingo products contributing less. Roulette is the dominant table game, with live variants now preferred to software versions.
Whilst the widespread availability of low entry pricing for slots contributes to their popularity, they are also the most popular activity amongst higher risk player groups, which may logically be attributed to short event frequency, typical player demographics and constant cognitive immersion in the activity. None of this is ‘new’ news, but it does speak to the need for constant operator diligence.
And slots are not alone, other product innovations that are built around increasing event frequency – in-play betting, micro-betting, live casino, combination bets, betting behind etc – are also more closely linked to the established markers of behavioural harm.
Perception is the new reality
The good news is that the number of players who have deposits declined by their payment provider due to lack of funds or suspicious activity remains low. The problem, such as it is, is not as great as the wider perception of it. But as any wise marketer will tell us, perception is the new reality. One bad apple really can spoil the whole bunch and for regulators and politicians, what their public believes is far more important than what they actually know.
Our future is in our hands
Online behavioural analysis, using the amazing technologies available, can provide absolute insight into the nature of an individual gambler’s behaviour and – crucially in this new environment – the ability to eliminate the regulatory risks of being ‘Penny Wise, Dollar Stupid’. As the popularity and accessibility of online gaming continues to increase, its long-term success depends on us keeping our own house in order and our future in our own hands.
Ref: Behavioural Markers of Harm and Their Potential in Identifying Risk in Online Gambling: P. Delfabbro, J. Parke, M. Catania, K. Chikh, 2023.
