Can Pay and Play Casinos Thrive in the UK?

Posted by Harry Kane on Tuesday, December 10, 2019

The world’s iGaming market seems to be in a constant state of flux at present, thanks to endless innovation, frequent legislative changes and the emergence of new and exciting markets. One of the most intriguing developments revolves around the emergence of pay and play casinos, which have quickly become incredibly popular in burgeoning markets such as Norway, Denmark and Germany.

But what are pay and play casinos, and could they possibly thrive in a mature and heavily regulated market such as the UK?

What Are Pay and Play Casinos?

In simple terms, pay and play casinos allow players to deposit cash and wager instantly through their bank account. This contrasts sharply with traditional online casinos, which typically require operators to verify the identification of new players independently when they first register and credit their accounts. Not only does this negate the time-consuming and often laborious process of having your ID verified as a new player, but it also enables operator to optimise their revenues in real-time. This creates a win-win scenario, and one that’s commonplace in immature markets where growth continues at a disproportionate rate to regulation. This type of new and novel casino is being powered by Trustly, which is an innovative payment platform that boasts genuinely state-of-the-art technology. This is applied once players register for an account with a pay and play casino, with Trustly collecting personal and financial data from the individual’s account before sharing this directly with the operator for ID and Know Your Customer (KYC) purposes. KYC checks stipulate a business’s requirement to verify the identity of potential customers and clients in a bid to determine their suitability, whilst also highlighting any risks that they may pose to the company in question. As we can see, the process developed by Trustly serves to streamline the initial registration and verification process, rather than circumnavigating completely. However, the upshot of this is that new players can effectively deposit and wager without delay, whilst the verification process continues quickly and efficiently in the background. Whilst there are obvious challenges associated with pay and play casinos in developed markets such as the UK (we’ll discuss these in detail later in the piece), there are some issues for businesses to contend with when partnering with Trustly. More specifically, the fact that operators don’t deal directly with new players when they register means that they don’t have access to their data and personal details. As a result, it can be challenging for brands to retain existing players through effective marketing and targeted bonus offers, creating a scenario where they may be unable to optimise the profitability associated with individual customers. Of course, such information can be obtained later in the customer journey, but the competitive and changeable nature of the iGaming markets means that operators only have a limited window of opportunity to incentivise long-term player loyalty. Not only this, but it can be argued that the ability to sign-up a larger number of players quickly more than compensates for the need to source data at a later date, particularly with the typical cost of acquiring customers considerably higher than retaining them.

The Issue with Pay and Play Casinos in the UK

We spoke earlier about the regulatory challenges associated with pay and play casinos, especially in mature and heavily legislated markets such as the UK. In fact, the UK market provides a particularly interesting study, with both the Gambling Commission and the government currently taking proactive steps towards safeguarding vulnerable players and minimising gambling-related harm in society. One of the biggest changes has seen the UK regulator dramatically revise the nature of age verification checks carried out by operators, which have historically allowed brands up to 72 hours to complete the necessary processes. In simple terms, this has enabled unverified players to sign up to a new casino site, credit their account and play games for a period of up to three days, with individuals only unable to withdraw their winnings until their identification has been confirmed. Under the new regulations, however, the same operators are required to verify the true age and the identification of players before they deposit funds into their new account. At the same time, players are unable to deploy any free spins or no-deposit bonus funds before their ID has been verified, meaning that casinos can not allow individuals to play until all vetting processes are complete. This new regulation has clearly targeted typical online casinos, but it has also been applied to free-to-play iterations of games on any website. Despite the fact that there’s no money involved and the platform in question doesn’t officially promote gambling, the UKGC has decided to adopt a zero-tolerance approach to sites that make such games accessible to kids. Given this and the fundamental nature of the new age verification rules, it’s clear that the updated regulations are entirely at odds with the principles of pay and play casinos. More specifically, whilst they insist that operators assume responsibility for carrying out all age verification and KYC checks before allowing players to wager, pay and play casinos enable brands to outsource accountability and accept new registrations before the ID of the player has been confirmed. As a result, there remains an inherent risk that children or vulnerable gamblers may be trying to access a casino platform, whilst the lack of up-front vetting also raises concerns about money laundering. This is perhaps the core reason why pay and play casinos are most commonly found in maturing and lightly-regulated markets, and why such entities are ultimately unlikely to thrive in the UK.

The Last Word

Even in immature market, pay and play casinos pose considerable challenges from the perspective of responsible gambling and the protection of player and customer data. In heavily-regulated markets such as the UK, however, there’s a fundamental conflict between the principles of pay and play casino gambling and the most up-to-date age verification rules. This creates a noticeable clash that’s impossible to ignore, and it’s highly likely that the Gambling Commission in the UK would not allow pay and play casinos to operate for line in the existing regulatory climate.