Moving in the Right Direction - The 13th Annual GamCare Conference

The 13th GamCare Annual Conference took place last November (2012) in London, UK. The conference hosted a panel discussion titled 'Moving in the Right Direction' which included presentations and discussions on social media, self-exclusion and social marketing. In this video Simo Dragicevic from Bet Buddy discusses proposals on strengthening the UK's self-exclusion processes to better protect consumers.

The presentation is followed by a panel discussion that was chaired by GamCare Deputy Chairman John Hagan. The panel included Professor Peter Collins, former head of Salford University's Centre for the Study of Gambling, whose talk on designing effective social marketing campaigns is also included. The other conference presentation videos, including Professor Jon Grant's session (Department of Psychiatry and Behavioral Neuroscience, University of Chicago), can be viewed on the GamCare website.

Some Snippits from Westminster – The Future of Gambling

Yesterday's gambling seminar at Westminster (London, UK) brought together senior industry, parliamentary, and regulatory figures to debate how regulation, technology and international markets are shaping the future of the gambling industry.  Whilst there was much debate across a range of issues, such as EU regulatory harmonisation, taxation, US regulation and Black Friday, data privacy, sports betting and sports rights, we will share some highlights from the discussions that focused on the new opportunities that technology is providing for the industry.

Opening the ‘New technologies and platforms for gambling’ session was Mark Maydon, Commercial Director of Sporting Index.  Maydon said that the industry is witnessing an ‘arms race’ in terms of technology, in that there is a need for significant and continued investment in IT if operators are to remain competitive.  Operators need to develop more effective and scalable data processing capabilities, with Maydon suggesting that the gambling industry needs to learn from how the financial services industry has developed these capabilities.  Investment in mobile gaming was also an area of significant importance and growth for the industry.

Charles Cohen, CEO of Probability, was next and he stressed that whilst mobile gaming was a growing channel it was a very different channel to traditional online gaming.  He challenged the ‘myths of mobile gaming’  stressing mobile gaming’s objective is not about squeezing as much cash from online gamblers by encouraging them to gamble more (such as when in the pub or whilst waiting for the bus).  Rather, mobile gaming is about offering a different betting experience that appeals to a different customer i.e. not traditional PC-based online gamblers.  He stressed PC-based online games do not transfer well to the mobile channel and the best mobile games were very simple games.  He also shared some interesting insights from Probability’s own research: the average session of a mobile game is c.10 minutes and 82% of mobile gamers gamble whilst sitting at home sitting in front of the TV.  David Loveday, CEO of OpenBet, stated he felt that the TV channel, once integrated with broadband, along with online content provision, were two areas that will become increasingly prevalent in shaping the future of gambling.

Finally Martin Cruddace, Chief Legal and Regulatory Officer at Betfair, framed his views on technology in the context of social responsibility and integrity in betting.  Cruddace said the industry must lead from the ‘front foot’ on these issues and that Betfair was investing in technology to better protect the customer, including predictive analytics to identify problem gambling behaviour.  In addition, Betfair are further enhancing the current range of player protection features by offering self-exclusion via gaming vertical and are also assessing the possibility of giving players the ability to exclude themselves from gambling from certain parts of the day e.g. after 11pm.  Earlier Peter Reynolds, Head of Communications at bwin.party, emphasised the that online gaming offered a perfect audit trail of data that allowed the industry to proactively track online behaviour and act upon insights obtained.

The key messages coming from the other sessions re-iterated common themes; US regulation will inevitably happen however this will be via multi-year state projects, a lack of harmonised regulation in Europe is making it increasingly expensive for operators to compete internationally, however EU harmonisation is realistically many years away, and regulating markets is the best way to protect the consumer.  And the consumer is what the industry must focus on during these consultations and debates over the coming months as the best way to influence policy makers is by framing the debate in the context of what is best for the consumer rather than what is best for the operator.

Using Complexity Theory to Help Navigate the Future of iGaming Regulation

The online gaming industry regulatory debate has received significant media attention recently following the German court ruling between bwin and Westlotto, with bwin CEO Norbet Teufelberger calling for “modern regulations for online gaming” to ensure “suitable standards of gambler protection”. From a player protection perspective much debate has centred around whether more open regulated markets offer players greater protection compared with either monopolistic or unregulated markets.

But what exactly are “modern regulations” and how can they be applied to the online gaming industry to ensure players are suitably protected? Because of the increasingly complex operating and regulatory environment in online gaming answering this question is not straightforward. I attempt to frame an approach as to how the industry can best embrace “modern regulations” to protect players using the concept of Complexity Theory, which has been used to help large organisations, which are inherently complex, to produce effective results from complex interactions.

Today’s regulated markets (highlighted in green in the diagram below) offer a range of player protection requirements, approaches and codes of conducts developed either by regulators or by industry bodies (e.g. eCOGRA). Such codes of conduct have broad agreement across the industry and are relatively easily implementable and enforceable. These are necessary, and even strict regulations, as long as they are aligned to player needs, should be encouraged. Debate continues regarding the justification of monopolies on the grounds of player protection, with accusations from the commercial operators that this is being used a political weapon to justify the maintenance of state monopolies (a debate that I won’t get into in this blog). Either way, whilst necessary, key draw-backs of today’s regulated markets are i) regulations remain static for too long, ii) whilst responsible gaming standards can be met on paper, the players’ experience can differ widely, and iii) international operators are having to provide different levels of player protection due to a player’s nationality because of differing national requirements.

At the other end of the complexity theory paradigm is where I place the current unregulated markets (highlighted in red). Whilst some argue over-regulation can lead to less sustainable practices in that regulations can create the opposite of the intended outcome as organisations look to find ways around the rules (e.g. banking), the vast majority of regulators, academics and operators believe that leaving player protection in the sole hands of market forces is wrong. I agree.

So where does this leave us? Well, how about complexity, ambiguity, uncertainty and turbulence? Without doubt there is no ‘silver bullet’ approach as to how to address the limitations of today’s current regulated markets. It’s also quite clear that nobody really knows where we are heading as change is constant and unpredictable and technological innovation is explosive and on a steep gradient. However, at the heart of this chaos, complexity and uncertainty lies an enormous opportunity to build more safe, informative and fun experiences for online gamblers. Grasping this opportunity however requires vigorous debate, innovation, research, experimentation and collaboration (this is highlighted in blue). Whilst we won’t always be right first time, we will be heading in the right direction. And we are now seeing evidence of the industry increasingly taking the lead in this space.

“Modern regulations to suitably protect players” in online gambling therefore requires not just an adaptation of existing regulations, but a new approach that in parallel encourages industry self-regulation, collaboration and innovation. It’s not a straightforward answer but it’s not a straightforward problem to solve. Despite the challenges, I’m encouraged to see continuing innovation within the industry and believe we will find the right direction, as in the words of Dimitri Kondratiev, the economist, “progress is an irreversible trend”.

Can the online gambling industry continue to grow profits whilst protecting players?

I’ve now completed my interviews with senior stakeholders this summer and the report is now available to view at Cass Business School’s website. First I’d like to thank the participants for taking part in this phase of my research. I interviewed representatives from the commercial sector, including Tim Phillips, Betfair’s Director of European Public Affairs, Clive Hawkwood, CEO at the Remote Gambling Association and Jean Moreau Jørgensen who is the Executive Director at the World Lotteries Association. It was very interesting talking to the commercial sector to understand both the initiatives operators are undertaking to progress the responsible gaming agenda and also to learn more about the challenges they face.

From academia I had the pleasure of talking to Professor Alex Blaszczynski from the University of Sydney, Dr Jonathan Parke from Salford University and Professor Roger Steare from Cass Business School. I found the academics were very open and balanced in their points of view, in terms of cautioning against jumping to generalisations about any links between internet gambling and problem gambling however also challenging the operators to do more where they can.

I also had very interesting conversations with the Andy McLellan, CEO of GamCare and Tex Rees who is eCOGRA’s Fair Gaming Advocate and John Carr OBE, Secretary of the UK Children's Charities' Coalition on Internet Safety. It was encouraging to see how the commercial sector is collaborating and supporting organisations such as GamCare and eCOGRA to help deliver a fair and safe gaming environment and also to help support vulnerable gamblers. I also interviewed Christel Schaldemose MEP, who has been actively involved in driving the political debate around consumer protection in the European Parliament and who authored last year’s report on the integrity of online gaming.

It was very enlightening talking to such a diverse and expert range of stakeholders and I learned a lot from the experience. As you could imagine, such a diverse range of people did at times take differing viewpoints on some issues. However whilst people had differing views on the best approaches, what was clear to me was that everyone was focused on trying to build a sustainable online gambling industry. I hope you enjoy the paper!

To regulate (or not)

I was having a chat with Roger Steare the other day about whether regulation in some industries is more necessary than others (Roger is a Professor of Organisational Ethics and a fellow at ResPublica). We agreed in the principle that over-regulating, regardless of industry, doesn’t lead to sustainable practices (take a look at the banking industry). Self-regulating generally leads to more durable settlements, however agreeing on the principles can be challenging. Take a look at the Retail Lending Initiative, a great idea to help promote better practices within the Credit Card industry that failed to get adopted due to challenges in getting stakeholders to agree a common way forward (click here to read more). So what about self-regulation in the gaming industry? I think this does make sense in many respects. There’s a risk that developing acres of legislation will actually encourage the undesirable outcomes that the legislation is intended to stop. And the operators who are already creating sustainable profits in a responsible way will be unfortunately leveled by a system that sets rules that promotes the wrong behaviours (see Tim Cowen’s blog). However, for self-regulation to work, the dialogue must embrace all industry’s stakeholders…