Responsible Gaming
iGaming is the collective name that the online gambling industry uses for their wide range of
gambling products and services. This includes all your classic casino games, betting on
sports and other events, as well as sports trading.
This industry has seen unprecedented growth
, in the last five years the total global revenue
has doubled from around 50 billion to 100 billion euros. This is the Gross Gambling Revenue
(GGR), which is the difference between the wagered amount and the paid out prizes. With
an average payout of almost 95%, this represents a total wagered amount of 2,000 billion
euros.
With a revenue of 40 billion euros, Europe is the biggest online gambling market in the
world. One of the driving forces behind this is that online gambling has been regulated in
almost all European countries. A regulated market ensures that consumers have a legal,
safe and fair way to gamble. Not only did this make gambling more accessible and attractive,
in general it also meant that operators were allowed to advertise.
The battle for the customer
The reasoning behind allowing gambling ads is that consumers should be made aware of,
and channelled towards the new legal options where their safety and wellbeing would be
ensured. Wellbeing in this context means that vulnerable groups of people, especially minors
and young adults, must be protected against the risks that gambling has.
However, this is where the first ethical dilemmas appear. How aggressive can or should your
marketing campaign be when entering a new and highly competitive market, whilst still
respecting the obligation to protect those vulnerable groups?
One of the most recent examples of how online gambling operators have dealt with this
responsibility, was the long anticipated regulation of the Dutch gambling market. Although
some relatively strict rules were imposed in order to protect young adults – people under 24
years cannot be given any bonuses or promotions, the rules with regards to advertising were
not as strict.
Although restrictions with regards to the times at which commercials for betting and
gambling are common worldwide
, with the government focussing on facilitating the so called
‘channelling toward legal options’, operators were trusted to self regulate and take their
responsibility with regards to attracting customers.
They had not foreseen with what marketing budgets the initial ten operators that had
acquired a Dutch licence would enter the market. Within ten months over 100 million euros
was spent on adverts on every possible platform.
To make matters worse, these ad campaigns appeared to be most successful among young
adults, quickly leading to a large overrepresentation of this group in the gambling statistics.
When it comes to taking responsibility, operators had chosen the route of compliance;
making only the minimum effort required, yet focussing on growing their customer base as
quickly as possible.
Over the course of several years, advertising was more and more restricted, and eventually
leading to a complete ban on untargeted advertising. Illustrative of the industry’s attitude
towards this matter is that in the months leading up to the ban, expenditure on advertising
rose 30% compared to a year earlier.
Understanding Responsible Gaming
When the iGaming industry talks about responsible gaming, or safer gambling, it usually
does not concern responsibilities as discussed above. The main concern of responsible
gaming is preventing the possible negative effects of gambling.
Like with anything that triggers our reward system, gambling has a risk of addiction which
can end up destroying lives. Just like with substances, especially with the younger, the
undeveloped brain is susceptible to permanent changes. Hence gambling is forbidden for
minors, and in some countries the age limit is even higher.
The way responsible gaming policies address gambling problems is two fold, on the one side
operators offer their customers different ways to keep themselves in check. Different kinds of
limits can be set, both with regards to time spent and money deposited or lost. Besides
limits, there will also always be ways to block yourself from playing completely for certain
periods of time.
Here lies another possibility for operators to not only be compliant, by making the options
available, but to proactively promote the use of them. It would also be possible to have all
operators in one country share the same limits and exclusion systems, examples of this can
be found in Belgium and Spain for example.
A more recent development is that more and more regulators want operators to implement
advanced levels of player monitoring. With the current state of technology, it is perfectly
feasible to recognise irregular player behaviour as it happens. Players not taking breaks or
making higher and higher bets are strong indicators of problem gambling, and so is making
multiple deposits in a short period of time.
Although operators have always had the obligation to act on signals of problematic
behaviour, with these new systems they can no longer avoid doing so immediately. However,
enforcing the implementation of such systems is a long and slow process, and one every
country has to do for themselves.
In the meantime casinos and bookmakers have a choice, or calculation to make. Do we take
our responsibility and the initiative which might postpone stricter rules, or do we take
maximum advantage of the current situation?
The Conflicting Interests and the Cash Cow Dilemma
As in any industry a balance has to be found between the customer and the shareholder,
however the business model of online gambling seems skewed. Different publications from
renowned sources such as the UK parliament and the Journal of Business Research have
shown that a small part of around 5% of the customers, generally is responsible for 60-80%
of the revenue of online gambling operators.
The question is to what extent operators are willing to scrutinise these players, which are
basically their steady profit staker. Chances are that they are high rollers that can afford to
play and lose large amounts, however it is also possible that they are vulnerable players that
are trying to win their money back.
The risk for an operator here is not only potentially losing income from customers that they
should not have allowed to play that much. High rollers might interpret the extra checks and
questions a nuisance, and leave for a competitor.
Striking a Balance
While online casinos actively showcase their most
responsible gaming sites
at industry
award shows, responsible gaming practices may still prioritise adherence to regulations.
In such a competitive industry, a company would shoot itself in the foot if it would voluntarily
give up revenue. Especially when measures taken could backfire if most profit indeed comes
from vulnerable players. On the other hand, some countries have shown that even with a
national deposit limit in effect, the iGaming sector can still be profitable.
The iGaming industry has a choice to make, can they settle for a little less profit by choosing
for ethical iGaming practices such as prioritising player protection in order to protect players
well-being, or will they keep to their strategy of compliance, earning as much as they can, as
long as they can?
