Why Brand Ambassadors Crucial to the Future of the iGaming?

Posted by Harry Kane on Friday, March 27, 2020

From relatively humble beginnings in the mid-90s, the iGaming industry in the UK has blossomed into a huge and lucrative market that has largely enjoyed double-digit annual growth over the course of the last decade.

With exponential growth comes significant change and hurdles, however, and there’s no doubt that this has been borne out in the form of problem gambling in recent times.

This has even inspired the UK Gambling Commission (UKGC) to make safeguarding vulnerable players a core strategic objective through 2021, which has in-turn helped to define the concept of responsible gambling and empowered some operators to establish themselves as brand ambassadors within the new-look industry.

But which brands are leading this charge, and why is it important that other operators take steps to follow suit in the current marketplace? Let’s find out!

The State of the Market and the Extent of Problem Gambling in the UK

At first glance, the iGaming market in the UK appears to be in genuinely rude health. After all, despite an expected 0.6% contraction in a financial turbulent year ending March 2019, the sector’s GGY hit an impressive £5.3 billion.

At the same time, iGaming retained its impressive 37% market share, with this expected to increase and supersede 50% by the year 2030.

Of course, the last two years have also seen operators face significant challenges in terms of compliance, each of which stems from the regulator’s commitment to protect underage and problem gamblers nationwide.

During this time, operators have faced up to significant shifts in terms of transparency and their withdrawal processes, while multichannel operators with brick-and-mortar stores have also been forced to count the significant cost of a £2 FOBT cap (which slashed the maximum betting limit from £100).

The latter has definitely had a seismic impact on the share prices and economic performance of market leading brands like William Hill and Ladbrokes, while also triggering large-scale store closures, significant job losses and an overall decline in the GGY for gambling brands.

On an even more fundamental level, the UKGC has also adopted an aggressive regulatory approach that has imposed heavy financial sanctions on brands that fail to comply with either responsible gambling or anti-money laundering guidelines.

The aforementioned William Hill brand was fined a hefty £6.2 million back in 2018, for example, in response to a charge of failing to safeguard its players to actively prevent money from being laundered through their various online platforms.

32Red was also hit with a seismic £2 million fine for failing to protect or verify the earnings of one particularly vulnerable player, who was allowed to wager a staggering £758,000 after customer service representatives missed in excess of 20 separate opportunities to spot the issue and recommend help.

In the financial year ending 2018 alone, the UKGC imposed cumulative fines to the tune of £19.7 million, highlighting an incredibly tough and tenacious regulatory stance that has compelled operators to take action and assume greater responsibility for the wellbeing of their customers.

This has caused brands to heed some harsh lessons in a relatively short space of time, but there’s no doubt that the regulator’s core strategic objectives are well-founded and integral to the long-term growth and sustainability of the gambling industry as a whole in the UK.

More specifically, numerous concerns have been raised about the rate of problem gambling in the UK, with around 1% of the UK population as a whole thought to showcase clear signs of addictive betting behaviour on a recurring basis.

More recently, a study of so-called ‘VIP programs’, which are operated by most iGaming brands and tend to offer tailored and increasingly lucrative incentives to players depending on their overall spend, found that such schemes were home to a disproportionately high number of problem gamblers.

More specifically, it was revealed that betting firms in the UK took a staggering 83% of its total deposits from just 2% of customers, namely high-rollers who gambled large amounts on a frequent basis (and were continually encouraged to do so).

This reaffirms the pressing need for regulators to take aggressive action, as operators themselves cannot be immediately expected to lead change and implement proactive measures that actively restrict their turnover or bottom line.

Then there’s the issue of underage gambling, which is part of a wider social issue that sees children younger than 16 frequently (albeit inadvertently in most instances) targeted by iGaming content and sponsored messages.

This problem was embodied during the 2018 World Cup, where research revealed that nearly 90 minutes of gambling-related adverts aired throughout the tournament and often during live, pre-watershed broadcasts.

Social media also provides an immense cause for concern, as this remains a vast and largely unregulated space that’s packed full of casino-inspired social games and virtual poker rooms.

Despite this, youngsters can register for a Facebook account from the age of just 13, creating a scenario where kids are being exposed to gambling-related content that provides a gateway into real-money wagering online.

As a result of these factors, it was estimated that 11% of children aged between 11 and 16 gambled regularly in England and Wales in 2018, with this number having risen by incrementally in relation to the corresponding figures from 2017.

Of course, we should caveat these findings by revealing that the overall number of underage gamblers has actually fallen by around 3% since 2014, but this remains a prominent issue that sits at the heart of the UKGC’s approach to driving responsible gambling as a core value for all industry stakeholders.

How Exactly Has the UKGC Responded to the Challenge?

As we’ve already said, the UKGC has worked hard to regulate the iGaming market and its operators, particularly in terms of driving compliance and sanctioning those that fail to meet the newly-imposed standards.

But what precise steps as it taken to achieve these aims? Well, one of the earliest examples saw the regulator team up with the Competitions and Mergers authority to investigate problematic bonus conditions, which in some instances were applying unfair wagering requirements and failing to adequately explain the relevant T&Cs to players.

The UKGC subsequently created new guidelines to help create greater transparency between players and brands, while also ensuring that operators were unable to unlawfully hold onto to customers cash for extended period of time (including the full value of their initial deposit).

On a similar note, the Commission has also taken steps to ensure that operators follow more stringent verification procedures, which prevents unverified players from wagering and brands from subsequently withholding winnings while final identification checks are completed.

Previously, players usually had a 72-hour verification window after registering with a new site, during which time they could complete a deposit and wager their hard-earned cash. This enabled potentially vulnerable or self-excluded players to wager prior to undergoing comprehensive ID checks, creating a huge safeguarding issue that completely undermined the UKGC’s strategic goals.

Fortunately, operators are now unable to take deposits or wagers from players until their ID has been verified, minimising the risk to new players who may have previously showcased problem behaviour.

This also helped to tackle the issue of underage gambling, by ensuring that individuals without official or viable forms of identification that proved their age were unable to wager anything at all.

Each of these measures has been implemented as a way of safeguarding players, and the UKGC should receive credit for trying to create a more stringent regulatory climate.

This has followed an independent government review carried out in conjunction with the UKGC, with the latter opting to impose a complete ban as a way of preventing problem gamblers from wagering with borrowed money.

Interestingly, this has been largely welcomed by both players and operators alike, particularly after it was revealed that nearly 20% of all online gambling transactions are driven by credit and essentially borrowed funds.

Not only will this help individuals who have already accepted that they have an issue with gambling, it will also minimise the risk of people developing problem behaviour in the first instance.

Creating a Sustainable Market – Which Brands Are Leading the Responsible Gambling Charge?

While the regulator may have done sterling work to help create a safer and more respected iGaming market in the UK, by itself it cannot hope to tame or manage a market that’s now worth in excess of £5.3 billion.

This is why it has strived to encourage operators to become key drivers and ambassadors for responsible gambling, while driving accountability and attempting to secure a more sustainable future for the industry as a whole.

Of course, some brands have accepted this challenge with a little more enthusiasm than others, with Ladbrokes’ parent company GVC offering a relevant case in point.

For example, this brand has previously launched its iconic ‘Changing for the Bettor’ safer gambling campaign, which has become a global initiative aimed at understanding and reducing gambling related harm in society.

At the heart of this is a major research drive and collaboration with Cambridge Health Alliance, which has a specialist Division for Addiction. As part of GVC’s commitment to double its research spend, it has commissioned a multi-million-pound, five-year study that will provide genuine insight into the impact of problem gambling and actionable solutions.

Make no mistake; the UKGC suffers due to a relative lack of funding and detailed insight, and in this respect, they require practical help from operators if they’re to fully realise their core strategic goals.

In terms of embodying the ethos of responsible gambling, the Mr. Green brand has also become something of a trail-blazer.

As the brand explains on its website, it has taken direct responsibility for the welfare of its customers, by going above and beyond the idea of merely discussing the threat posed by problem gambling and offering generic advice to customers.

Instead, it has invested in its unique ‘Green Gaming Tool’, which is predictive in its nature and has been designed to help players keep track of their behaviour and set customisable limits (in terms of both wager amounts and overall activity).

Of course, one of the advantages of this is that it also empowers customers to understand their behaviour and assume responsibility for their own, while the customer service representatives at Mr. Green are also highly trained and capable of identifying patterns of compulsive betting as they develop over time.

Ultimately, this offers the best way of safeguarding the long-term interests of players and the iGaming history as a whole, as it empowers all stakeholders and creates a collaborative approach that minimises the overall risk to society.

Without this, too large a burden is placed on the UK regulator, creating a scenario where a rising number of problem gamblers begin to slip through the cracks and become immersed in a huge and hard-to-regulate market.

The Bottom Line – How Other Brands Can Follow Suit

It’s also fair to describe this type of approach as being proactive, as it works in a similar way to regulatory measures to protect players from their worst impulses in the first place.

This, when combined with more reactive measures such as tough financial sanctions, is likely to have a far-reaching impact in the iGaming market, by simultaneously safeguarding players more effectively and negating the need for future government interventions.

This can only be achieved if the vast majority of iGaming operators become more proactive in their attempts to embody the principles of responsible gambling and commit themselves to becoming brand ambassadors for a new-look and more self-aware industry.

This is not to say that most brands don’t take responsible gambling seriously or have a fundamental issue to safeguarding their customers, but the fact remains that many have yet to really embrace an ambassadorial role and blaze a trail for others to follow in the marketplace.

Make no mistake; however, taking this plunge definitely holds the key to the long-term success of the iGaming market in the UK, while operators that establish themselves as brand ambassadors will also have the chance to steal a crucial march on their competitors as a new look industry begins to take shape!