No matter what is contained in the upcoming gambling review whitepaper (of which more below), it is time for the industry to think creatively about how to meet the player protection challenge. It won’t go away anytime soon. Fortunately, there are technology-based solutions out there that provide protection for those that need it, whilst allowing those that can afford to stake as they like. We just have to adopt them.
The long-awaited recommendations of the UK government’s gambling review are imminent. Or are they? It is now over 2 years since the process of reforming the 2005 Gambling Act got underway, and whilst an almost infinite number of kites have been flown, we are no nearer knowing precisely what will be contained in the (allegedly) soon-to-be-published whitepaper.
As might be expected in this situation, as decision-time gets closer, each ‘side’ in this debate becomes increasingly noisy.
On the one hand, those keen for the Government to do as much as possible to combat problem gambling, such as Iain Duncan-Smith, promise to ‘declare war’ with the Government if measures previously proposed are watered down.
Meanwhile, the industry protests that those same proposals may lead to the death of horse racing, represent an unconscionable intrusion on customer privacy and freedoms, and could be a huge blow for a key UK industry employing thousands of people.
Either way, the tone of the conversation suggests there is one thing that both sides agree on: somebody will ‘win’, and somebody will ‘lose’.
There are a number of underlying assumptions behind a lot of this debate. Many of them are at best questionable.
First among these is the idea that nobody is willing to share their financial information in order to bet. We simply do not believe this is true. In 2022, people willingly share financial data to buy a house, rent an apartment, buy more competitive insurance or just manage their money more effectively.
In other words, if people have to share financial information to access products and services they want (like gambling), they will do so.
The second is that affordability checks, and specifically more affordability checks, are by definition bad for business. Are they? If we consider the current situation in the industry and what a modern affordability process might look like, that assumption is questionable at best.
To answer this question, we need to be clear about what happens - and more specifically what doesn’t happen - today.
What does not happen is that operators take money freely from anyone who wants to stake with them. Quite rightly, the regulator takes a dim view of such an approach. Instead, in almost all cases a ‘one size fits all’ affordability cap (that varies from operator to operator) is imposed on every player. Beyond a certain amount, an affordability check will be required.
At this point, largely because the affordability process with the average operator is so terrible today, 80% or more of those customers churn.
Is that good for business? Almost certainly not. What is happening here is that instead of innovation, we are using an incredibly blunt instrument to solve what should be a straightforward problem, and damaging our top line as a result.
Does this really happen? Yes. We have heard an almost infinite number of stories from individuals who want to spend money but cannot. This is the current situation, that the industry appears so eager to defend.
Let me paint a different picture.
Imagine that we look at ways to get customers to verify their identity and share financial data at sign-up. In this world, there is no need for a one-size-fits-all block. Instead, we are able to allow those who can afford to stake to do so freely. And we can immediately limit customers who need to be protected.
Let us also imagine that we learn from other industries (most specifically fintech) in order to ask customers to share financial information in the right way. Let’s engage positively with the challenge, and by doing so make it as easy, secure, transparent, and as reassuring as possible for a customer to share data. Talking about how complicated everything is only puts off the consumer. It is a self-serving prophecy that will damage the industry.
Speaking of which…
I like to bet. I am a keen horse racing enthusiast and I believe the industry is an absolutely vital part of our culture in both Britain and Ireland. I want that industry, and the gambling industry, to thrive.
By the same token, I don’t believe that problem gambling headlines, many detailing tragic personal stories, do anybody any favour whatsoever. Are we intending to wish away the damage our industry can do and hope for the best? Has that ever been a good long-term strategy?
One doesn’t even have to go too far back in time to see how this plays out unless the industry takes a proactive, modernising approach to the challenge. When fixed-odds betting terminals (FOBTs) roamed the land, and the negative media headlines piled up, with a few honourable exceptions the industry did absolutely nothing to gain control of the story and reform itself from within.
What was the result?
The limit on FOBTs is now £2. If the industry had followed Corcoran’s example and voluntarily reduced the limit to £10, would that have helped avoid this fate? We can’t say for sure, but it is more than possible. And for those needing help with the maths: £2 is 20% of £10.
Let’s not make the same mistake twice. Let’s use the technology and smarts at our disposal to take a modern, more sophisticated approach to affordability. And protect consumers and our industry at the same time.