Comply and thrive with safer gambling technologies

The regulatory sands of change have struck the industry hard in recent months as the UK Gambling Commission (UKGC) has been busy dishing out multimillion-pound fines to locally licensed operators for a myriad of social responsibility and AML failings. In January of this year, the UKGC opened an investigation into 17 companies for failing to uphold the proper AML and social responsibility processes. William

Hill, LeoVegas, 32Red and Sky Betting & Gaming (SBG) have been among the first to be brandished with heavy-handed penalties, and, unsurprisingly, this has caused the rest of the egaming sector to wake up and smell the coffee. As a result, many are in the process of integrating much more efficient, secure and technical measures to ensure they don’t face a similar fate.

32Red, as an example, took a hit to its Q2 revenues after having to install a series of new hefty measurements to meet the UKGC’s new standards. At the time, Kindred CEO Henrik Tjärnström said: “Tools that have been put in place with a focus on sustainability have had a cooling off effect on top-line growth but the team is doing a fantastic job with the brand.” 32Red introduced PSEDS onto its platform, and head of communications Alex Westrell told EGR Technology the group was adopting new measures across all its brands and was also looking at ways to improve AML efforts through collaborations.

Jumping on the bandwagon

Beyond a group of savvy and now regulation-friendly operators, is a handful of new-wave banking firms that are also working to protect problem gamblers from sinking any more of their money into unsustainable gambling habits. Among these is Monzo, a mobile-only bank that categorises users’ spending and allows them to track their purchases in real time. In June, the fintech firm rolled out a blocking tool for gambling purchases that users could enable voluntarily.

The company has estimated approximately 6,000 of its 750,000- strong user base are affected by a gambling disorder. According to a blog post on the firm’s website, each transaction made via Monzo is tagged with a code that allows the company to identify the kind of merchant being paid. “To build the gambling block, we put together a list of codes that let us identify when you’re making a payment to a gambling merchant. When the feature is turned on, we’ll do our best to block any payments you try to make to those merchants,” vulnerable customer specialist Natalie Ledward wrote.

These merchant category codes (MCC), provided by Mastercard, can pinpoint gambling purchases made at retail venues and online. “When the gambling block is enabled, we decline transactions with the matching MCC,” Monzo content manager Beatrice Borbon tells EGR Technology. The process is a straightforward one, but it has proven effective and been mirrored by banking institutions like Barclays, which now blocks gambling transactions from Barclaycard accounts. Starling Bank is offering a similar blocking system via its mobile app.

The CEO of Starling, Anne Boden, said the tool underlined how digital banking could quickly react to customers facing issues and made use of technology to develop solutions that could help them live a better financial life. The gambling industry has not always looked on the banking industry banks for not moving quickly enough with payments and security advances.

Yet SBG’s head of core product, Andy Sacre, has turned to the banking industry in the past to develop new innovations in payments for SBG users. He says there is movement in the wider payments and banking industries. For instance, partnering up with banks could unlock fresh opportunities in vulnerable player detection and other responsible gambling measures like affordability checks, particularly through the use of open banking APIs.

Sacre looks to the likes of Starling Bank as a marker for how the gambling industry should be treating its customers when introducing new measures. He cites the challenger bank’s manner of displaying overdraft charges transparently and giving customers better insight into, and control over, their spending habits as an example of how SBG will better inform its users. “We’re looking at a similar approach that gives customers better insight and control over their spend,” he relays.

A sharper focus

SBG is making inroads in developing its own in-house responsibility tools, and Sacre says the operator has only recently established a dedicated development team to work on building these technologies. “We’ve always had a focus on safer gambling from a policy and process perspective, but now we’ve added a dedicated product team with its own tech-resource to build new tools and features for customers,” Sacre explains.

“To some outside the company, it might feel a bit counter intuitive but it’s definitely the right thing to do. We’re currently looking at tools that customers would want to keep themselves safe online, like more flexible and easy-to-use limits, or perhaps making their profit and loss more visible so they can see how much they’ve won or lost.”

Sacre is keen to involve SBG’s trusted third-party providers in the development of future safer gambling tools in order to maintain a fresh approach and uphold consistent innovation. And Simo Dragicevic, the CEO and founder of Playtech’s responsible gambling analytics subsidiary, BetBuddy, notes an operator considering building its responsible gambling tech entirely inhouse will have to invest a significant amount in dedicated staff and hardware.

Andy Sacre, SBG’s head of core product, has secured a team of almost 80 developers to work on responsible gambling features

Dragicevic rightfully admits responsible gambling is “a complex domain” and if an organisation decides to go down the build route, “they really need to be committed to having a multidisciplinary team of data scientists, responsible gambling experts, software engineers, communications specialists, social scientists and researchers and all this capability to do it really well”.

Dragicevic is developing tools powered by AI to establish algorithms and machine learning models that can make a thousand decision points for each player. These models will be used to target players with risk behaviours at the most appropriate time in their journeys by using the most appropriate means of communication. The process consists of sifting through huge amounts of player data which can be pushed into an operator’s engagement platform.

Man versus machine

“As a human, it’s nearly impossible to interpret thousands of pages of computer code to understand how that decision has been made,” Dragicevic explains. “For example, what’s driving the categorisation of a high-risk player could vary from an increase in deposit limit or session time, to the fact they’re engaged in 25 different types of slots, or their losses are variable on losing days.” Interacting with players that have been flagged with risky behaviours at the optimal time in their journey is far more effective in helping them change their behaviour, Dragicevic says, and both operators and suppliers alike are working on tools to determine when the perfect time to address players might be.

But for those working tirelessly to produce these tools, the roadmap is notably slower than creating player-facing products for both betting and gaming. Sacre puts this down to the sensitive nature of the work and its close ties to regulation. “If we’re going to try and change a product or journey around how we identify customers, for example, it’s crucial that we make sure we get that right,” he comments. “I mentioned things like proof of concepts earlier, but when it comes to verifying someone’s age, there is not a lot of room for the whole ‘test-and-learn’ techniques we sometimes use on other product development.”

Nevertheless, the fact operators are assigning tech staff to work on safer gambling techniques is a step towards normalising this area of the industry. Dragicevic, though, believes operators need to be increasingly proactive in their endeavour to protect customers. For BetBuddy, which was acquired by Playtech in October 2017, research and product integration have taken priority to streamline its offering and dig deep down into the relatively new area of regulatory technologies in egaming.

Taking the lead

Elsewhere, the soon-to-be-regulated Swedish market has imposed a slew of stringent technical requirements on operators to comply with once the legislation is in place in January 2019. The Swedish parliament has placed a heavy emphasis on social responsibility, insisting that licensed operators must that analyses players’ behaviours to determine whether they are at risk of developing a problem. And in light of this, a number of top-tier companies with Nordic heritage and values have made leaps and bounds in the responsible gambling space. In recent months, the likes of Kindred, LeoVegas and Mr Green have uncovered new and unique, in-house tech platforms powered by AI and capable of making intelligent judgements based on user behaviour.

Mattias Wedar, CEO for Mr Green’s tech subsidiary, previously told EGR Technology the link between real time data and the algorithm used to determine a player’s level of risk is imperative. “The challenge was in building [a player’s] personal profile based on actual data sent in real time to the external algorithm in which we score them as a player based on their combined daily actions and transactions. We had this mechanism in our event hub which is our central repository for all the activities that happen on our platform.

The Green Gaming predictive tool applies the external algorithm on top of this data and presents individual player profiles with risk levels,” Wedar notes. One of the earliest adopters of this type of technology was Swedish speaking, Åland-based Paf, whose mantra is to be the leading operator in social responsibility. Paf’s Radar technology was initially built as a basic tool to track customer deposit patterns to determine when to contact at-risk customers.

It has since been enhanced to include more parameters and automate the process of contacting customers. “In brief, we continuously scan our players’ gambling behaviour looking for negative patterns, and then we support them to regain control over their gambling,” Paf deputy CEO and head of responsibility Daniela Johansson comments.

“Over the years we have developed a four-step communication model that includes personalised contact with our customers regarding information about their gaming behaviour and responsible gaming.” The latest move for Paf has been the introduction of what it claims is the industry’s first loss-limiting technology – a tool that will block payments from players who have lost up to €30,000 in 12 months since registering an account. Although the move will hit the operator’s annual revenues by 5%, the tool will not require a great deal in the way of technological development and manpower. Data will be gathered from payment processes to keep track of the money moving in and out of a player’s account.

Daniela Johansson is leading movements for Paf’s loss-limit technology

Johansson says the tech team will adopt an agile approach and following the initial launch of the loss-limit in September, the operator will look to implement further functionality for players beginning to approach the limit. “We will focus on creating good communication with these customers reaching the limit, but we also want to have a proactive communication towards the customers close to reaching it. For example, sending an email to those who have lost €20,000 and explaining they are soon reaching the loss limit.”

From a customer-facing perspective, the tool will not be visible on the site, but once customers begin to creep towards the allocated loss-limit, they will be met with tailormade messages sent out by the CRM team. Overall, these vanguards of social responsibility in the industry are optimistic that wider movements are being made, and those not making it a priority are at risk of facing the UKGC’s wrath. Dragicevic admits movement is predominantly happening within top tier operators, but it largely depends on their overall business mix.

“You have some operators that target more casual players and it’s a better fit with their business strategy because they are less likely to attract VIPs or high rollers as much as others. While higher spending players have been at the centre of all recent high-profile regulatory settlements, most are legitimate customers and responsible gambling analytics can help to better understand them too,” Dragicevic relays.

And in an effort to remedy the ever-growing headache of tightening regulations, BetBuddy is also working with Playtech’s third-party casino content suppliers to integrate certain techniques into their operations to be deployed to all partnering operators. This way, players can be guided towards games and content less likely to trigger problem gambling. Although these measures are still very much in their infancy, the sense of pressure and urgency being ingrained by regulators globally is pushing the industry along at a steady pace.

And while integrating the technology in question into multiple layers of a firm’s tech stack may prove slightly more complex, the help of payments blocking tools from the outside world is certainly a positive progression.