Last week, the UK government published its white paper on gambling reform after many months of delays. It was a bittersweet moment for gambling firms, who finally got to end their long, drawn out wait, but then had to wade through the document to assess how it affected them.
VegasSlotsOnline News broke down the details of that report last week. Among the inclusions were affordability checks for moderate to high online gambling spend, restrictions on bonus marketing, online slot stakings limits, and some major boosts for the land-based industry.
To provide more insight into how these measures will affect gambling companies and their players, UK gambling expert Kevin Dale has spoken with VSO News. As the CEO of iGaming advisory firm eGaming Monitor, Dale knows the UK gambling sector like the back of his hand.
Dale has his say
Can you briefly sum up your initial thoughts on the gambling white paper? Have they got it right or gone too far?
Overall, I think most people will breathe a sigh of relief that it does at least sound measured and balanced. There are many parts of the paper that make sense and are welcome and others for which it’s probably still early days as to whether to applaud or not.
‘frictionless’ is probably the key word across the 300-odd pages
There remains plenty of ‘devil in the [forthcoming] detail.’ Even the biggest issue of all, financial checks, remains a little vague at times. The word ‘frictionless’ is probably the key word across the 300-odd pages. I welcome the Betting & Gaming Council’s notion of an end to the polarized debate but imagine they’re being slightly optimistic!
What inclusion is most welcome to you?
I most welcomed the ‘dedicated team members’ line that is buried in the report as that’s often where the issues arise. It’s so often the interpretation and implementation of the rules or guidance that matters most and a lack of communication between operators and the UK Gaming Commission (UKGC) on implementation creates real problems.
More money to the UKGC is a good thing as it will mean more staff to work alongside operators (not simply policing them as such). Similarly, having dedicated staff for the big operators is welcome since these close relationships will bridge the gap between policy, guidance, implementation, and reality.
most are trying their best to implement socially responsible policies
When operators are fined by the UKGC, the overwhelming impression in the mainstream press is that operators have been doing the minimum and were caught once again, taking the proverbial. My experience is anything but and that most are trying their best to implement socially responsible policies within the guidance but when the guidance is vague, their interpretation is what is penalized. Again, more staff at the UKGC can help bridge these gaps.
Now, onto the specifics of some of the major changes. What impact will the increased affordability checks have on operators and their players?
This is probably the most contentious issue of all but, as above, the devil still lies between those lines of guidance, if they’ve even been spelt out or written down. I’ve never been a fan of affordability limits on gaming, and really think that this is a step too far. Yet, if inevitable, then let’s focus on the smoothest implementation.
there’s no guidance as to what to do exactly if the checks come back ‘negative’
Lines such as “frictionless for customers and conducted online by credit reference agencies or through other means such as open banking in the first instance” or “how more detailed checks could work in practice, and the expectation is that the majority would involve credit reference agencies” create a little shiver down the spine, especially those words I’ve given a bit of emphasis to above. There’s still consultation and interpretation to be applied here and as Northridge Law noted, there’s no guidance as to what to do exactly if the checks come back ‘negative.’ Similarly, as Regulus pointed out: “A lot of it will be subject to the Gambling Commission consultations.”
Many operators had already introduced slot staking limits, so do you think government-mandated restrictions will have much impact?
I have less of an issue on the staking limits as I never was a fan of customer ‘burnout.’ Smaller stakes and longer sessions are far better at creating loyal long term customers. Stakes of £5 ($6.28) or £10 ($12.57) are high enough for most games, though this will depend on the volatility, frequency of win, and max win (x of stake) ratios of games. As an operator you can still make money at those levels for slots and arguably your customer retention metrics may also improve.
If it reduces the percentage of customers who try to apply a ‘Martingale strategy’ (doubling up stakes after losing bets) then that’s probably a good thing too.
Should these thresholds be lower for younger players?
I get the idea that younger adults are more susceptible to the superstitions that surround the notion of risk. That said, I’m not a fan of operators and content suppliers having to enable ‘age modifiers’ on top of an already complex matrix of ‘country modifications’ for each game. When regulation gets to this level of detail it tends to be over-prescriptive and inflexible thus overkill.
a little bit mixed messaging, perhaps
The fact that lottery companies have been encouraging the idea of hot and cold numbers for years when there’s no mathematical justification for them, sort of sets a contrasting picture here. We encourage superstitions on the one hand, whilst worrying about how the youth of today might be vulnerable to those same superstitions – a little bit mixed messaging, perhaps.
Would an opt-in for online bonuses system affect the industry’s ability to gain new players?
I don’t like the idea of banning bonuses as per some other jurisdictions but opt outs or ins are not a major issue, either ethically or commercially.
What are your thoughts on the statutory levy for operators? Was this necessary given the industry’s voluntary donations?
Yes I agree again on the inclusion of this one. A statutory levy makes it equitable for all and avoids those criticisms of “they’re only voluntarily doing it because….”
How about the lack of sponsorship ban? Were you pleased to see this?
Yes it was great to see no mandatory sponsorship bans because of the argument made in my previous article that this would cause sports to suffer. In addition, the cross-sport gambling sponsorship code similar to that in alcohol is a good thing.
How do you feel the white paper handles unfair practices by gambling firms?
I’m generally a fan of most of the discussion on unfair practices in the paper. The odds are already stacked in our favor as operators or suppliers of gaming products, so there’s really no need to be tight on ‘play-throughs,’ or on the ease of withdrawing cash and so forth.
not a case of unfair practices but simple common sense
At the same time, it’s also good that the government acknowledges operators’ rights to reduce liabilities on professional players for sports betting. This is not a case of unfair practices but simple common sense – some players are too good for bookmakers, whether it’s down to better maths models, knowledge or insider information. The paper terms this “managing liabilities… [to counter] shrewd bets or suspected cheating, insider knowledge or fraud.”
A breath or so later, however, the paper still expresses a bit of concern that: “It is apparent that some operators may be using restrictions to minimize commercial risk with excessive caution. For example, one customer was reportedly limited to a £0.00 stake, after lifetime profit of £38.33 ($48.14) across 180 bets.” Whilst I haven’t seen the figures, a detailed look would probably find that customer to be running an arbitrage account, which again fits into that professional gambler category. One more example of how important it is for UKGC staff to really understand the workings of gaming companies. Echoing the comment above, more and dedicated resource at the UKGC is a good thing here.
What do you think of the potential for regulators influencing game design?
When it comes to regulators creating guidance at game design level, there is currently a real lack of understanding of volatility, frequency of wins, multipliers or relative odds and how these vary by game, and thus how rules might apply to different games and game types.
One size regulations are a danger here
Even in the ‘slots’ category, there are many different game variants and maths models. One size regulations are a danger here. It is good that the idea of stake limits was not extended to table games, perhaps because of some of these game type differences.
Communicating odds and informing players better of their chances of winning and in a more friendly simple manner is a good thing. The more we all understand the concepts of RTPs, FOWs, multipliers and variance, the better the communication becomes between operators, players, and the regulators.
