Tackling Online Advertising in the iGaming White Paper

Posted by Harry Kane on Friday, February 16, 2024

The government’s iGaming white paper has raised more than few eyebrows, especially with its’ recommendation that the maximum slot game bet should be reduced to £5 (and just £2 for players aged 25 or under). Part of the review also discussed advertising and whether the regulator does enough to safeguard players from sponsored messages.

Of course, these discussions have been ongoing for years, with a specific focus on the regulators efforts to safeguard vulnerable and underage gamblers. But did the recent white paper uncover, and could we see a blanket advertising ban in the future?

Advertising in Focus – A Closer Look at the Gambling White Paper

The Department for Culture, Media and Sport (DCMS) published its long-awaited iGaming white paper in April 2023, after several delays and timing issues. While the key takeaways focused on the imposition on a maximum betting cap for online slots and more stringent affordability checks, the advertising practices of betting brands also came under microscope.

According to the white paper, there was “good evidence” that gambling advertising has an overt and disproportionate impact on people who had already reported problem gambling issues. There were also findings which reported that online advertising had a particularly strong influence on people who were aged under 18, while the initial recommendations by the regulator were deemed to “not go far enough”. Instead, the paper made its own recommendations:

• – The UK Gambling Commission (UKGC) has been asked to review bonus incentives, including free bets and no-deposit offers. These must be structured in a more socially responsible manner where possible and made as transparent as possible.
• – The regulator must also continually review practices surrounding online VIP and rewards schemes. Such initiatives must not feature predatory terms or empower problem gambling.
• – The Commission has also been asked to strengthen the consent around direct marketing in the iGaming vertical. The result of this must be that all customers are given greater choice and flexibility about the offers that they receive (and how marketing initiatives are conveyed).
• – The DCMS will also collaborate more closely with the government Department of Health and Social Care and the Gambling Commission, with a view to developing an updated, evidence-based model for creating safer gambling messages that only appeal to adults.

Of course, this follows previous interventions by the UKGC, who have investigated the impact of television advertising and the links that exist between EPL and EFL Championship clubs and active betting sites. Previously, ads and direct links to betting sites have appeared on dedicated children’s pages and websites, with such sponsorship arrangements having since been clamped down on.

Interestingly, the focus on online advertising has only recently intensified, despite the fact that this accounts for the vast majority of iGaming brands’ marketing spend. The growth of online advertising also drove a 56% spike in the total amount spent by gambling companies between 2014 and 2017, while this trend has continued to create compelling incentives for both young and vulnerable players.

How Big are the Issues of Underage and Problem Gambling?

Clearly, the rising prevalence of online advertising and failure of the regulator to stop sponsored messaging reaching underage individuals has been challenged by the recent iGaming review. The issue of underage gambling has been a key focal point for the regulator ever since its own strategic review in 2018, with a subsequent study in 2019 revealing that up to 450,000 children between the ages of 11 and 16 now bet regularly.

While this number isn’t thought to have increased exponentially since, online gambling remains a comparatively significant issue within the cohort of children aged between 11 and 16. After all, the number of kids who gambled within the reporting period was much higher than those who drank, smoke or took drugs, creating an overt social issue that the government is keen to address.

When it comes to problem or compulsive gambling, this is another issue that has been at least partially contained and addressed by the actions of the regulator. However, according to the latest data compiled by Public Health England, some 0.5% of the adult population (around 246,000 people) are categorised as problem gambling, with a further 3.8% (2.2 million individuals) are classed as being “at-risk”.

Both demographics remain vulnerable and susceptible to sponsored messages, especially those that are delivered online or through direct marketing channels such as email. The regulator has also found it hard to clamp down on digital advertising channels and practices, so the iGaming review has provided recommendations and provisions that may prove helpful.

Will the Review Recommendations Prove Effective?

Of course, the iGaming review has targeted advertising after it deemed the regulators own recommendations ineffective. But are the government’s own proposals likely to change the course of online gambling advertising and drive more positive impacts within society?

Certainly, a review of bonus and VIP scheme structures is long overdue, especially in terms of how wagering requirements are conveyed and imposed. Operators may subsequently have to tweak such structures and improve transparency, so that customers understand the impact of wagering of so-called “free” bets and the timeframes in which such terms need to be fulfilled.

The focus on direct marketing has also been welcomed by charities and lobbyists. This will afford gamblers greater choice when it comes to the offers that they receive and opting out of sponsored messages, regardless of whether they’re self-excluding from betting. Consent will be a key driver here, while the process of opting out of sponsored messaging will probably be made easier across the board.

A collaboration between the DCMS, Department of Health and Social Care and the UKGC could also prove game-changing, especially in terms of how messages are structured and delivered in the future. The really good news is that advertising is being addressed, and this can only benefit bettors and gambling brands in the long-term!