The changing nature of gambling

Sky Betting & Gaming (SB&G) and William Hill joining forces was a headline many expected to signify a long-rumoured merger between the two betting giants rather than a problem gambling initiative, but it would be a mistake to downplay the significance of the latter. In a market that’s being dragged into a new era of customer-focused responsible gambling it feels like a small yet important step on the long road ahead.

The two firms are using machine learning and predictive modelling to spot potential problem gamblers early in their lifecycle. In the wider context of nine-figure annual marketing spends the budget for the project looks tiny in the low seven figures, but the customer numbers involved do not with hundreds of thousands of customers analysed and 5% receiving contact. This is potentially tens of thousands of problem gamblers given access to early preventative tools.

This type of initiative feels like the future of the sector. While we await the introduction of the industry-wide self-exclusion scheme this type of joint initiative can help reposition online gambling within the wider leisure context and be more than just a token gesture to placate the increasingly watchful regulator.

Getting on the front foot

The ongoing CMA investigation and the pending Gambling Commission review are not an end point for the sector where it can clean house and move on. The UK regulator’s actions are the first stage in an attempt to move the industry to a more sustainable position as an entertainment business and that can only be achieved by taking a more active role in discouraging problem behaviour.

Regulation tends by its nature to be retrospective, fixing problems that have occurred, however there is no reason for the industry to wait until it messes up before it takes action. SB&G and Hills it should be noted are not the only firms adopting this approach, with Kindred also taking similar steps forward, but they remain in the minority in the wider sector.

The same big data tools used to profile LTV can be used to provide a more sustainable and safe environment for players, albeit at a cost to bottom line. And it is something firms can no longer afford to ignore, because the alternative to being on the front foot is not the status quo, but continued stronger controls imposed by regulators.

Googling the answer

On a similar theme it was interesting to note the reactions of the industry to the news Google was, finally, opening up its Android Play Store to gambling apps. The faint disinterest and mild irritation shown by some industry voices suggest this is as much a setback as an opportunity. The Android “problem” has long been solved by detailed landing pages, slick HTML5 web apps and this was just more development work and more oversight it didn’t need.

But this arguably misses the true opportunity here. Google changed the world of online gambling roughly a decade ago when it opened up its huge advertising network to the sector. It was the catalyst for an explosion in digital marketing and was the bedrock on which many of today’s businesses were built. This will be far less significant a move, but it is hugely important in several ways.

Outside the myopic UK sector it has far larger potential reverberations, for example. Germany and Italy have 80% Android market share, according to Kantar World Panel, and Spain is at 90% Android. It would take a particularly stubborn person to not concede that this has been a factor in the slower rollout of mobile gaming in those territories than the UK and Scandinavia.

A wider view

But it’s arguably the optics that matter most. Operators need to embrace every bit of legitimacy offered to them and this is a huge endorsement from one of the largest global tech companies that exists. And for players that no longer need to be told to alter their settings to trust “unknown” sources to play on their £700 Android phone it’s hard to see many reputational downsides for the online gambling industry here.

As is increasingly clear from both regulatory and technology developments both inside and outside the egaming industry, this is a real inflection point. It feels like a time of change and one where the next set of power players will be decided, and it’s a fair bet that those who most embrace responsible gambling and mainstream legitimacy will be those who win out.

The trouble is it’s a long-term bet with a short-term cost and those take guts and judgement. And, of course, they require a large bankroll…