Ontario Lottery (OLG) launches PlayOLG using Bet Buddy's Responsible Gaming Solution

Bet Buddy is delighted to announce that Ontario Lottery Gaming Corporation has now launched its new iGaming business, PlayOLG. Players in Ontario will be able to access a range of interactive casino-style games such as blackjack, roulette and baccarat as well as a range of slots. OLG's iGaming platform will be initially made available to eligible members of OLG’s Winner’s Circle Rewards program before it becomes available to legal-aged Ontarians soon. 

Drawing on Canadian and global best practices, OLG’s Internet gaming offering will include a gold standard of leading Responsible Gambling (RG) tools. OLG’s RG safeguards focus on prevention and mitigation and include player education on healthy playing habits and how to seek help and support for problem gamblers. Bet Buddy's Responsible Gambling solution is being leveraged to support PlayOLG's Self-assessments Tests, Risk Profile Information, and Customized Responsible Gambling Messaging.

Simo Dragicevic, Bet Buddy CEO, stated "OLG and GTECH selected Bet Buddy to provide its Responsible Gaming solution to support PlayOLG and we are now thrilled to see the launch of the business. OLG is committed to offering a 'gold standard' in responsible gaming and we are delighted to be partnering with OLG and GTECH over the coming years to help meet its commitments to offering a world-class responsible gaming experience to all Ontarians. The fact that OLG were recently awarded the WLA (World Lotteries Association) 2014 Best Overall Responsible Gambling (RG) Program award further demonstrates OLG's commitment to achieving the 'gold standard'".

The Reno Model and Informed Player Choice - What it Means Today for Gaming Operators

We have recently been inspired by a blog post by British Columbia Lottery Corporation titled 'Who's responsible for gambling responsibly' to write this piece on The Reno Model. For those unfamiliar with it, The Reno Model was developed by Alex Blaszczynski, Robert Ladouceur and Howard Shaffer and published in 2004 and sets out a framework for responsible gaming:

The Reno Model states that the ultimate decision to gamble resides with the individual and represents a choice and that to properly make this decision, individuals must have the opportunity to be informed. We at Bet Buddy agree with these principles. The model also states that unjustified intrusion is likely not the way to promote responsible gambling the gambling industry does not have the expertise or responsibility to diagnose or clinically treat individuals with gambling-related harms. Bet Buddy also agrees with these principles.

It’s worth emphasizing The Reno Model's point that to guarantee informed choice among gambling participants, the gambling industry needs to provide the minimum core information that is required for decision-making. We believe that the challenge the gaming operators face today is that technology and our understanding of behavior and risk in gaming has certainly evolved since the paper was published, so what may have been considered “the minimum core information” 5-10 years ago, such as generic information on odds and house edge for example, has most certainly evolved with opportunities to provide more individualized “minimum core information” such as individualized player messaging based on a sound scientific and evidence base of what is high risk gambling.

One of the recommendations from the model states that responsible gambling strategies should primarily target gamblers in the high risk cell, with the aim of preventing migration to the gambling-related harm cell. Whilst this makes sense, Bet Buddy believes that operators should also use research and technology to enhance operator education and prevention strategies to prevent those that are low and moderate risk from entering the high risk and problem gambler segments. Strategies such as personalized player experiences can be designed to be unintrusive and are highly scalable, whereas treatment, whilst absolutely necessary, is typically expensive and unscalable (note that in 2011/12, c.50% of the Responsible Gambling Trust's total £5m industry donations was dedicated to GamCare, the UK's biggest problem gambling treatment provider). So we think that operators should place equal emphasis on ensuring all their customers receive the right education and messages at the right time about responsible gaming, rather than focusing on the small minority who are problem gamblers.

A debate on what today “minimum core information” actually means would be a useful one to have as whilst the principles of the model remain extremely relevant, how to best implement the recommendations may not be clear to gaming policy makers, regulators and operators.

A Brief Re-cap from the NCRG and G2E: Part 2

In the second of our re-caps from the NCRG and G2E conferences we provide a summary from the G2E Panel on Proactive Process: Responsible Gaming Online. The session was chaired by Connie Jones, Director of Responsible Gaming at IGT and included Joachim Haeusler, Head of Responsible Gaming at bwin.party, Hillevi Stuhrenberg, Head of Responsible Gaming at Betsson, and Simo Dragicevic of Bet Buddy.

Simo opened up the discussion with an overview of the evolution of responsible gaming tools over the past decade and outlined the factors that are driving the adoption of new responsible gaming tools. Whilst regulation continues to be the major factor driving innovation and adoption in responsible gaming, there are increasingly more examples of how commercial B2C operators are adopting innovative and new advanced tools to help to protect vulnerable players in the absence of regulation. 

For example, Joachim Hauesler, head of responsible gaming at bwin.party, the world's largest listed commercial B2C internet gambling operator, described how bwin.party are using algorithms to detect problematic gambling behaviour to meet regulatory requirements in the Spanish iGaming market, specifically to support decisions as to whether players should be allowed to increase limits. Also Hillevi from Betsson, the Swedish internet gambling B2C and B2B operator, discussed a new online self-help tool that Betsson is piloting with their players which provides proactive online support from their players who feel they are at risk of problem gambling. The support is provided by an independent treatment provider and is voluntary, and any player information given to the treatment provider is confidential and not made available to Betsson. Both of these are great examples of how the commercial sector is seeing the benefits of implementing more personalized responsible gaming tools to help protect vulnerable players, whilst also building their brand equity and customer sustainability. We think it's very encouraging to see some of the recommendations from our industry expert review paper on CSR in gambling written in 2010 now being implemented in the market today.

Connie Jones then opened up the panel discussion with the audience. Much of the interest and questioning was around how B2C operators were using predictive analytics to better understand player behaviors to make personalized interventions. A topic that was discussed in the previous panel surfaced again too - how should operators best share data on self-exclusion? There appeared unanimous agreement on the need for centralized self-exclusion approaches, with Hillevi highlighting the approach to central self-exclusion adopted by the Danish internet gaming market. Simo also challenged the panel further, asking whether at some point in the future operators should collaborate and share not just self-exclusion data but also other player data, such as deposit and timing limits, to offer a unified responsible gaming platform across all operators for players. Whilst it's far to say this suggestion didn't receive overwhelming support from the panel, we feel it's another 'blue sky' thinking idea, that along with the adoption of universal predictive algorithms that was discussed previously, could one day become a standard practice in future regulated gaming markets.

A Brief Re-cap from the NCRG and G2E: Part 1

It has been a while since we last blogged and we are sorry! This is due to the hectic conference season and demand for Bet Buddy products and services, but we are now back on the blogging trail. We wanted to take this opportunity to re-cap on what were excellent NCRG (National Center for Responsible Gaming) and G2E conferences, specifically two of the panel discussions that Bet Buddy participated in. Here's our re-cap on the first of these panels, the NCRG Roundtable on Online Gaming: Regulating Responsible Gaming on the Internet.

The session was chaired by Alan Feldman, Senior Vice President of Public Affairs at MGM Resorts and Chairman of the NCRG, and included Mitch Garber, CEO of Caesars Interactive Entertainment, Mark Lipparelli, Former Chairman of the Nevada Gaming Control Board, Clive Hawkswood, CEO of the Remote Gambling Association, and Simo Dragicevic, CEO of Bet Buddy.

As anticipated there was significant debate about the possible cross-over between social and real money wagering. Some believed that the player wagering characteristics and player types are very different between the two forms of gaming, with very few players making the cross-over from social to real money wagering, whilst others felt that the game mechanics between the two forms of gaming can be very similar. For example, Dr. Jeffrey Derevensky (McGill University) made an excellent point to Mitch Garber, in that given many youngsters play Caesars social games on Facebook such as Slotomania, Caesars has an excellent opportunity to use such games as means to educate younger social gamers about responsible gaming in real money wagering.

Debate also shifted towards the regulatory regime implemented in Nevada ahead of the launch of internet poker. Mitch Garber stressed that the requirements put in place by Mark Lipparelli and his team were more strenuous than his experience in the UK regulated internet gambling market when he was CEO of PartyGaming, specifically around money laundering checks and requirements to verify players' locations. However, when Mark was asked about whether Nevada would be implementing a central self-exclusion database which all licensed operators could use, he said whilst Nevada seriously considered this option, they didn't take this route from day 1 due to the regulator not having sufficient technical ability to develop and host such a service. Whilst we agreed with Mark's assertion that the regulator would require to partner with other specialist providers to deliver such a service, we believe there is sufficient weight of evidence for all regulated markets to adopt such an approach (for more on this topic read Bet Buddy's research into multi-operator self-exclusion with GamCare and Salford University).

There was also debate around what future directions research in problem gambling and Internet gambling should take. Simo Dragicevic stressed that the scientific community and industry should now look to start testing new tools and systems with actual players to assess their effectiveness in influencing behaviours, and whilst Clive Hawkswood supported this approach, he stressed that there are still many differencing view points in the scientific community about what is the best approach to do this, which may be hindering adoption. Alan Feldman asked whether internet gambling companies had developed universal algorithms that could identify people who are at risk for developing problematic gambling behavior. Whilst Mitch Garber stressed that Caesars do place analytics at the heart of their operations and use such approaches, we feel that we are still some way off from being at the point where the industry can adopt universal approaches (although this is not inconceivable).  

In our next blog post, we will highlight the key discussion points from the G2E Panel on Proactive Responsible Gaming, which was chaired by Connie Jones, Director of Responsible Gaming at IGT and included Joachim Haeusler, Head of Responsible Gaming at bwin.party, Hillevi Stuhrenberg, Head of Responsible Gaming at Betsson, and Simo Dragicevic, CEO of Bet Buddy.

Social Marketing Campaigns

We've been taking a look at the responsible gaming social marketing campaigns that have been launched over the years:

We have pinned 70 examples on to this Pinterest board. The majority of examples originate from Australia, the US and Canada (however we did predominantly use English search terms which has no doubt missed some non-English speaking campaigns). Unsurpisingly there is a heavy emphasis on the potential negative consequences, with a number focusing on impacts on relationships. Whilst many of the older campaigns focus on the words 'problem, gambling and responsible', it's interesting to see how some of the more recent campaigns are framing the messaging without using these words and focusing on different ways to connect the message to a broader audience e.g. images of 'everyday people' enjoying gambling in a responsible manner. Some campaigns are using eye-catching images and videos to visually highlight potential pitfalls whilst others are leveraging other recongnisable social marketing campaigns (e.g. safe sex) in the context of gamblimg. There's also an increasing framing of responsible gaming as something a smart, sensible and thinking-person's gambler would do (see this too). Did we miss any you like? If yes, please post the link in a comment below.

The Product Lifecycle and Responsible Gaming

We are currently collaborating with GamCare and the University of Salford on a project to research multi-operator self-exclusion. The research is examining self-exclusion in a number of contexts, including examining the drivers behind industry adoption of new responsible gaming tools and standards. The research is jointly funded by The UK Technology Strategy Board and the Economic and Social Research Council.

The evolution of technological standards and products follows a specific path according to Wardley (2011).  Wardley, in this video, outlines a model of technology adoption, ideas diffusion and productisation, arguing that activities evolve through a common pathway, starting with innovation, custom development, through to productisation and services and eventually commoditisation. At the commoditisation stage, technology and processes are commonly predictable, repeatable and measurable. Business is ‘warfare’ and a ‘catfight’ argues Wardley, as market forces drive competition, product development, and product adoption through the lifecycle.

As we noted in an earlier blog on industry dynamics, the gambling industry is one where innovation is becoming increasingly critical to success. There is a significant emphasis on creating new and exciting games and content across multiple channels, with new features being  released in increasingly shorter timescales to gain maximum impact and advantage. However, it can be argued that the same emphasis on research and development and innovation has not been seen in the evolution of responsible gaming tools. This is arguably due to the notion that, in general, responsible gaming is viewed a compliance activity by the industry, with operators in effect focusing on delivering the mandatory requirements to ensure they able to compete in regulated markets (although there certainly are exceptions). Having assessed the evolution of responsible gaming features using Wardley's product lifecycle curve, we can see this broad trend emerging.

When examining what drives the productisation of responsible gaming tools one should consider the broader macro industry trends impacting commerce, for example the continuing switch from land-based to internet commerce across all industries. Consumers are, for example, increasingly sure about the security and safety of online payments, which has resulted in a multitude of internet payment service offerings that a gambling operator can leverage which is ultimately driving to the commoditisation of online payments. 

In addition to cross-industry mega trends, regulation has (unsurprisingly) a considerable influence on the evolution of responsible gaming products and services. Responsible gaming features which are now licensing requirements in regulated markets, such as self-exclusion, are firmly ingrained in the product architectures of all internet gaming player account management system product offerings, and are moving to the point of becoming a commoditised offering and responsible gaming 'hygiene factor'. However, some gaming operators have begun to differentiate these hygiene factors, for example by developing self-exclusion by gaming vertical which in effect allow players to self-exclude from specific game types e.g. casino, sports betting, lottery, etc. Such features are currently not widespread and are being developed by operators who see competitive advantage in these offerings. These features will progress from the custom build phase to product/service stage if more operators see this as a source of differentiation. Alternatively, future regulations could demand operators to offer additional responsible gaming tools if they are deemed to provide greater safeguards to the consumer, which would begin elevating these features to 'hygiene factor' status.

Muli-operator self-exclusion solutions, such as VeriPlay, are being developed by software firms such as Bet Buddy in collaboration with industry partners in the absence of regulatory requirements in the UK. If such services are viewed as a compliance activity by the industry, then there is a risk that they will not receive sufficient priority and investment i.e. operators will be unlikley to prioritise the development of a non-mandatory responsible gaming feature ahead of mobile game development, for example. Although we do note there are some excellent responsible gaming initiatives have been developed and led by the industry (see the WLA and ESSA, for example). Nonetheless, this places regulators in a difficult position, in that as regulations remain largely static once defined and implemented, technology innovation continues on a steep upward gradient. Regulations are therefore at risk of becoming quickly out-dated, and if all responsible gaming innovation is left solely in the hands of market forces, there is a risk that neccessary developments in player protection are not prioritised and developed as quickly as they should be given operators' finite resources.

GamCare will be presenting initial research findings in April 2012 at the Responsible Gambling Council's Discovery 2012 Conference in Toronto, Canada.

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.

Further Analysis of Behavioural Markers for High-Risk Internet Gambling

At the Responsible Gambling Council’s Discovery 2011 conference we presented our research and solutions that help lotteries and operators to develop sustainable relationships with gamblers by helping them to make more informed decisions.  Part of our session was focused on sharing our latest research findings on the analysis of high-risk gambling behaviours.

Braverman and Shaffer (2010), from Harvard’s Division on Addictions, published How do gamblers start gambling: identifying behavioural markers for high-risk internet gambling last year.  The paper is an important research asset as it was the first to analyse actual online gambling behaviour during a gambler’s first month of play to predict gambling-related problems.  Their study of live action sports bettors identified a small sub-group of gamblers (2.8%) from the total research cohort (n = 530) who demonstrated high levels of gambling variability and involvement.  These gamblers were found to be at higher risk than other gamblers of reporting gambling related problems.

The study was of particular interest to us because it was the first to use actual online gambling data to analyse  the first month of play, which allows for the possibility of intervention before gamblers start causing harm to themselves.  We wanted to see whether their results for sports betting would be consistent with other gamblers so we recreated the study using two new datasets, casino (n = 546) and poker (n = 575), using the same methodology as Harvard i.e. analysing the first month of play following registration, using the k-means clustering method and the same behavioural markers.  Our results showed some similarities to Harvard’s, in that we identified in both casino and poker a small-sub group of gamblers who showed markedly different gambling behaviours compared with the others gamblers during their first month of gambling activity, which in our case was highly variable gambling patterns e.g. see cluster 3 in our casino results.

We also observed other similarities with Harvard’s results e.g. the majority of gamblers in the research cohorts demonstrated moderate betting patterns.  There were also some differences e.g. our casino research identified a sub-group of gamblers who demonstrated high levels of gambling Intensity during their first month compared to the other gamblers.  This could be attributed to the nature of the casino games, such as slots and roulette, in that they are more continuous compared with live action sports betting and poker, which could allow for more intensive betting behaviour.  

Further opportunities exist to build on Harvard’s and our research, including extending the number of risk factors and also leveraging alternative statistical methodologies.  Whilst clustering is a useful machine learning technique for dividing data into meaningful groups, it has some limitations.  For example it has trouble clustering data with large outliers, such as skewed non-normally distributed populations such as these datasets.  It is also produces more meaningful and natural clusters with the application of greater numbers of variables and sub-clusters e.g. Experian, the credit rating agency, has used the k-means clustering technique to cluster populations into 45 types and 13 groups using 350 measures (Cameron et al, 2005.  A new methodology for segmenting consumers for financial services.  Journal of Financial Services Marketing, Vol 10, 3, 260-271).  

These findings provide further evidence of different gambling patterns and behaviours relative to high risk behavioural markers amongst gamblers.  We plan to publish the full findings later in the year.  However, when new technologies emerge, such as using behavioural analytics to help gamblers to better self-regulate their gambling behaviours, their usefulness is not always obvious and their uptake is rarely dependent on how well the technology works.  Rather, success and uptake depends on whether the ideas behind the technology spread and diffuse, which is why it is important that the industry has the opportunity to debate these ideas in detail.  At Discovery 2011 there was significant interest and debate across many sessions in how new technologies can help to better protect vulnerable gamblers.  Thanks must go to the Responsible Gambling Council for organising a great platform to enable lotteries, operators, software providers, problem gambling prevention and treatment providers and academics to debate these issues in a very open and collaborative manner.

Helping lotteries and operators move up the responsible gaming value chain

At the core of sustainability, transparency and trust within the online gambling industry is the concept of responsible gaming. Whilst the term is now commonly used within the industry what it exactly encapsulates is open to interpretation. Changing attitudes in society and industry towards the importance of sustainability coupled with advances in technology are having a major impact on how lotteries and operators perceive the responsible gaming value chain and how it can enhance the playing experience to better inform and protect players.

The majority of regulated and established operators are now offering what is termed ‘Level 1’ responsible gaming features. We have used the term Level 1 following an interview with Dr. Jonathan Parke from Salford University in the summer of 2010 as part of Bet Buddy’s research at City University London. Level 1 responsible gaming includes i) Core Responsible Gaming Features such as setting credit limits, ii) Age Verification, iii) Fair Games and Payments and iv) Safe and Secure Systems. Even though we believe the industry has done a good job in reaching this level (which is now considered a hygiene factor), there still remain inconsistencies in how these practices are applied.

Whilst the industry continues to bed-in and consolidate the Level 1 responsible gaming value chain, in parallel the past 2 years has witnessed the birth of more advanced responsible gaming tools and features. These are becoming increasingly adopted across the industry, such as leveraging more sophisticated player self‐tests that provide detailed player feedback and operator statistical feedback and using data mining and analytics technology to undertake player behavioural analysis across all operator channels (including call centres). At Bet Buddy we believe the need to help customers make better and more informed choices about their health and wealth and the need to retain customers in an increasingly competiive operating envrionment will see leading operators start to implement more sophisticated tools and features to help their players.

Another area we believe will continue to grow is cross‐operator collaboration, specifically sharing data to help protect players. Whilst operators have been doing this to help prevent fraudulent transactions in sports betting, we will see more operators in future sharing anonymised player data in areas such as self-exclusion through the use of safe and secure services to help protect known vulnerable players.  The development and deployment of the advanced responsible gaming value chain is a logical progression for an industry that continues to grow and mature.

Bet Buddy’s manifesto is to develop advanced responsible gambling software for every online gambling operator in the world to enable operators to better protect their players. Over the next few weeks we will be showcasing in greater detail how our products (PowerCrunch, Advisor, QuickTest and VeriPlay) are helping operators move beyond Level 1 and further up the responsible gaming value chain to deliver state-of-the-art gaming experiences for their players.

Marketing managers and responsible gaming managers have the same ultimate goal

Player protection has typically been viewed as a compliance activity by online operators. This was re-affirmed to me following a recent discussion I had on the benefits of player behaviour tracking with a marketing manager. A summary of our conversation will be familiar to many in the industry;

• The use of behaviour tracking technology is primarily used for detecting VIP players (such as grinders at poker) in order to quickly identify them and retain them before they slip away 
• Acquisition costs are high and these types of players are difficult to get
• A relatively small percentage of players deliver the largest share of revenues
• Therefore focusing on VIPs is not an unreasonable strategy 

But what about the vast majority of players that do not fall into this VIP category? Are operators realising as much value from these relationships as they could be? If the answer is no then could responsible gaming and player protection be better leveraged to manage the customer lifecycle? And what if the the marketing and responsible gaming managers were measured using similar KPIs (key performance indicators)?

Marketing 101 text books will teach you the importance of STP; segmentation, targeting and positioning. If executed well STP can move an organisation from differentiation to customisation, the holy grail of marketing. But this is very hard to get right. Take an industry that has been here for a long time such as financial services. To do this well the organisation must be able to collect customer data from all channels, monitor significant triggers in a customer’s life (e.g. change of job, significant credit), track key events and react accordingly (mortgage expiry), offer logical selections (such as savings v. competitors) and undertake propensity modelling based on key variables (such as credit company risk profiling). Whilst the best organisations can do this and do put more emphasis on maintaining the most profitable customer relationships they also put serious effort into making all customer relationships profitable and sustainable if possible.

 Applying these principles to online customer relationships could help convert some of the short-term player relationships to more sustainable relationships. How? For example, if one of your newly acquired non-VIP players was demonstrating early signs of problem gambling behaviour would it make more sense to send an undifferentiated marketing offer to this player or to send more personalised and meaningful tips on their game play and how they could keep it fun? In other words would you rather keep this type of player for a month or as an active player for 12+ months?

With this in mind why shouldn’t the responsible gaming manager also be measured and rewarded on player retention rates as well as their other responsibilities? And why shouldn’t the marketing manager be encouraged to design a sales campaign for a new regulated market that emphasises innovative player education features? Marketing is about meeting customer needs (and not primarily advertising) and responsible gaming should focus on all aspects of the customer lifecycle (and not solely compliance). Whilst marketing and responsible gaming managers' have different management responsibilities they ultimately have the same goal – building sustainable customer relationships.

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”.

Responsible Gaming is now on Wikipedia!

I've added a new entry for Responsible Gaming on Wikipedia.  It's not easy writing these articles, however there comes a time when you need to get these things out there and start getting the crowd to review and update articles.  So please take a look and get editing!

How Player Limits Boost Operator Profits

I was talking to an executive at the one of the leading online operators who explained to me why offering players responsible gaming features is good for business. Operators are very focused on reducing player churn during key phases of the customer lifecycle, such as in the initial month after customer acquisition when operators typically lose new players. For those who survive the first month, on average 35% of players remain with their operator after 3 months and this typically reduces to 15% after 12 months.

The executive explained to me that when players set limits (Player B), they are more likely to bet more often within their limits and are therefore less likely to become one of those players that the operator typically loses after the first month (Player A).

Quite a nice example of how responsible gaming and sustainable profits go hand-in-hand. The link between player protection and profits has received little or no research and is something that I’ll be focusing on from an analytical research perspective in the future.

EGBA Responsible Gaming Day – Thoughts from today’s conference at the European Parliament

I attended the EGBA Responsible Gaming Day today and I wanted to share some snippits and thoughts from the day. MEP Timothy Kirkhope set the scene by sharing his thoughts on the evolution of the European gambling industry. Internet gambling is a reality and the challenge is to figure out how to best to regulate the industry and manage risk.  There was also mention of the plan to consult the gambling industry and Member States on a Green Paper, which Commissioner Barnier intends to release by autumn 2010


The first panel discussion debate was centred on discussing the Schaldemose Report one year on and how best to protect vulnerable people. The debate involved MEPs Toine Manders, Christopher Fjellner and Ashley Fox, who challenged the industry to proactively keep innovating to protect vulnerable players whilst it continues to grow, warning that otherwise 5 years down the line the industry could find itself ‘clobbered’ with more onerous legislation.

During the second panel discussion we heard from Ken Ducatel about the EU’s digital agenda, emphasising the need for all online operators to place trust at the heart of their practices to encourage greater digital inclusion from society, a point re-iterated by the panellists, Peter Reynolds from PartyGaming, Benoit Cornu from PMU and Mark Healey from NEOVIA. Peter made a very good point about operators being too concerned about protecting data rather than using data to better protect the customer.

The final panel discussion included a defence for the right for jurisdictions to maintain the ability to locally regulate by Ana Paula Barros of Santa Casa and an overview of the CENs progress on defining Responsible Remote Gambling Measures by John Ketchell, the CEN’s Innovation Director. Finally, Simon Planzer of St Gallen University provided an overview of the research he is conducting in collaboration with The Division on Addictions, which amongst other things will examine the correlations between regulation and the levels of disordered gambling.

Bwin co-CEO Norbet Teufelberger wrapped-up the conference by noting that the industry is pleased to see more focus from the legislators compared with previous years. He stressed the need to develop open and regulated markets and praised the European online gaming firms for developing the online gaming industry's leading and most innovative companies, whose technology assets are being leveraged to help grow the global market in a responsible manner.

There was a very good turn out and it proved to be a very interesting, useful and enjoyable event. A big thanks must go to the teams from EGBA and Waggener Edtsrom on organising a great event, both the evening entertainment and the conference (although I’m not sure how much they had to do with the very entertaining Belgium v. Austria match which ended-up finishing 4-4 last night!).

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!

How sure are you that you will be in business in the future? Health and Sustainability

Over the summer I’ve been talking to a number of senior stakeholders within the online gaming industry on themes related to how to build a sustainable industry. A couple of papers related to my research will be published later this year, however people have been asking me what other companies in other industries are doing to help build customer loyalty through sustainable practices.

So as executives become increasingly worried about the impact of sustainability on the corporate bottom line, I’m taking a look at the themes of Safety, Social Change, The Environment, Fairness and Health to see what ideas from other industries can be leveraged to sustain the online gaming industry. A whitepaper will be posted on the Bet Buddy website soon but here is a view on Health and sustainability.

Many companies are now beginning to address sustainability issues beyond their four walls, particularly upstream in the supply chain. For example, Marks and Spencer launched Plan A in 2007 and are considered a leader in developing fair and sustainable business partnerships with their third world supplier.

However, Thomas Singer of SustainAbility argues that few examples exist of companies that have begun to act upon the realisation that their sustainability impact also extends downstream to their customers. Singer argues that the next frontier is likely to be about addressing this downstream impact, and companies that take this leap will find themselves well positioned for sustainability leadership. The first challenge, however, will be coming to terms with the notion that the customer may not always be right.

In the UK, a growing number of supermarkets and food manufacturers are using traffic light colours on the labels of products to help consumers make more informed choices. Companies such as Sainsbury, Asda and McCain say that the introduction of food labelling has had a very positive impact on product development and their customers, who have found food labelling both informative and reassuring. Now customers have experienced the benefits of food labelling, would they expect anything less? See what companies and people are saying at this Food Standards Agency video.

So could a similar approach be used within online gambling? Some say yes. Players are often presented with too much information to be able to make rationale and informed choices & are susceptible to taking the wrong decisions. Therefore, providing players with feedback on their play, such as if their bet frequency has increased significantly, could help promote more sustainable gambling practices.

Consumer decision making is further explored in Sunstien and Thaler’s book ‘Nudge: Improving Decisions About Health, Wealth, and Happiness’. The authors say that everyone’s "Inner Homer Simpson" drives us to make flawed decisions, which I explored in a previous blog.

Taming the ‘Inner Homer Simpson’ in you

As a student of and avid reader in the field of behavioral economics I wanted to mention Sunstien and Thaler’s ‘Nudge: Improving Decisions About Health, Wealth, and Happiness’ (here’s a good review of the book. The book’s an excellent read, and although there are some assertions I may not entirely agree with, it is highly relevant to what we are doing at Bet Buddy. The authors say that everyone’s "Inner Homer Simpson" drives us to make flawed decisions, such as eating too many cashews long after you stopped wanting one to paying insane fees on your credit cards. Why do we make these decisions? We live by rules of thumb, are influenced by irrational cognitive biases, and we live in a world of too many choices, with insufficient time and information to make the best one and little feedback about the stupid choices we've made in the past. So, the etching of black houseflies into the wells of the urinals at Schiphol Airport, under the theory that "if a man sees a fly, he aims at it”, reduced spillage by 80 percent, so was a good thing. And when the ATM beeps to remind you when you've walked away without your bank card is also a good thing. And giving players a gentle nudge or reminder if their play habits change is a good thing too.

The joys and perils of a near miss

There is a very interesting article in the Economist on the thrill of almost winning. We can analyse a player’s game play and make accurate assumptions about whether they are showing signs of problem gambling. But analysing their near misses takes this approach to the next level...

Transparency and player loyalty. A missed opportunity?

The dynamically changing gambling industry is posing gaming operators with both challenges and opportunities to creating competitive advantage. Technology is driving increasing demands from customers as gaming operators become more sophisticated and accessible. Player management is becoming increasingly important in terms of generating revenue and preserving player loyalty. The players' experience must become easier, more mobile and uphold responsible gaming standards. Responsible gaming is increasingly coming to the forefront of the industry and regulators will require operators to meet higher standards in the future.

But aren't operators already doing enough? At Bet Buddy we believe they need to take transparency and player loyalty to the next level. Why? Because the relationship between society and corporations is changing. Customer service, the environment and corporate ethics are at the forefront of the publics' mind. Customer service charters, corporate social responsibility reports and environmental policies will not be enough in the future. Trust in business is a brand differentiator. The Edelman Trust Barometer 2010 reported that "a company I trust is the top driver of corporate reputation in the UK". And McKinsey research states that "company CFOs largely agree that environmental and social programmes will create value over the long term for corporates".

At Bet Buddy we believe gambling operators need to place greater emphasis on being profitable whilst also protecting players. Responsible gaming is increasingly relevant to operators' players, authorities and society. It is a critical element of operators' strategies and could become a missed opportunity...

A happy player is an informed player

The other day I was talking to a former senior executive at one of the major online gaming operators and he told me that one of the challenges in promoting responsible gaming is that some players do not want to know how much they are spending, as the truth could give them an unpleasant surprise. He asked “would you want to know how much money you spent on beer last year?” This got me thinking. I calculated that I spent around £1000 last year on beer. Did this horrify me? Did this make me want to cut back on how much beer I drink? No it didn’t. Actually, it made me realise that I do like to drink in moderation as I quite enjoy it. In fact, it made me think that I wouldn’t mind knowing whether my drinking habits and spend remain in my own levels of moderation. For the vast majority of gamblers online gaming is fun. And at Bet Buddy, we believe that a happy player is an informed player. Keep it fun!