The UK Gambling Commission has announced more new plans to make gambling “safer than ever before” as well as listing areas in which the Commission will conduct further research.
The plans include:
1. Banning operators from providing free-to-play demo games until a consumer’s age has been determined.
2. Improving the speed and effectiveness of age verification processes.
3. Ensuring operators set limits on consumers’ spending until affordability checks have been conducted
4. Tackling unacceptable marketing and advertising and unfair terms and improving complaints and disputes procedures.
5. Strengthening requirements to interact with consumers who may be experiencing, or are at risk of developing, problems with their gambling.
There have already been moves to make licence holders responsible for their affiliates’ activity and to make terms and conditions fairer for customers. It is clear that the way e-gaming firms conduct their marketing, customer recruitment, retention and care is going to have to adapt.
There are many parts to a business model that require efficiency, some are more relevant than others. With e-gaming, marketing and gambling software are a prerequisite. If those two functions are not efficient the business cannot succeed. This does not mean to say that payments, accounting and HR are not important. But if an operator does not have good software and an efficient marketing team it is not in the game.
With the affiliate market under scrutiny, pressure growing about the extent of TV advertising, concerns about football shirt sponsorship, how is the gambling industry going to handle the churn of customers?
As GBGC has stated before, companies with retail outlets have a better chance of attracting new customers in the face of any restriction on digital marketing.
My fear is that the use of Google and Facebook in future may be curtailed. The recent scandal involving Facebook’s use of customer data is likely to cause governments to impose more regulation and, as e-gaming firms can testify, regulation comes at a cost.
Both Google and Facebook have had a good run. But Facebook in particular has stepped, perhaps inadvertently into the domain of politics and both have become very powerful. Those that study history will know what happened to both the East India Company and the Rockefellers. The former was becoming more powerful than governments and the latter had monopoly control of the US oil industry. The East India Company was dissolved by Act of Parliament in 1873 and the Rockefellers had to split their oil assets into two companies to create competition.
The governments of European Union, United States and UK have the duopoly in their sights. The cost of using both will become more expensive. Some will choose to decline taking the service, others will pay for the privilege, but fewer will use it and the ratio of return to spend lessened. The attractiveness of both may diminish.
Where to market gambling services is going to be the burning question this next two years.
As the political cycle moves towards the next general election in the UK (scheduled for 2022), the Government will use the improved finances to spend on the economy in the run up to the election. It is then that the gambling industry will pick up. So, my advice to the gambling industry is that the next two years may be difficult. There are a lot of price increases and more regulation in the pipeline. There will be rationalisation and consolidation. But better days are ahead.
By Warwick Bartlett
GBGC’s Gambling’s Cycle of Events – economy vs election