Home > Casino & games > The adult in the room

The adult in the room

| By Stephen Carter | Reading Time: 8 minutes
GVC distinguished itself in 2019 by putting its head above the parapet and speaking out in favour of wholesale industry changes to better protect players from gambling harms. As director of regulatory affairs, Martin Lycka has taken a leading role in this push

GVC distinguished itself in 2019 by putting its head above the parapet and speaking out in favour of wholesale industry changes to better protect players from gambling harms. As director of regulatory affairs, Martin Lycka (pictured left) has taken a leading role in this push. By Robin Harrison

Previously the start of a new year would have seen operators discussing plans for certain markets or the launch of new products. In 2020, however, the conversation has changed.

The focus is not what’s going to be on offer, or where it’ll be offered. What the industry – and a broad array of stakeholders and opponents – are interested in is how it will be offered.

Many in the sector will be hoping that they’ll be able to look back on 2019 as gambling’s annus horriblis. It saw the whistle-to-whistle advertising ban implemented in the UK, just one event in a year in which everything operators did or said seemed to heap more criticism on the industry.

Sweden’s igaming market launched, and heralded a new wave of enforcement for a range of offences, real or otherwise. Italy banned gambling advertising. Spain threatened to follow.

Yes, the US opened for business, but as Keith Whyte of the National Council on Problem Gambling (NCPG) says in a recent interview with iGB North America, the rapid roll-out of sports betting may bring a new wave of responsible gambling (RG) scandals.

GVC Holdings has in some ways been at the centre of the storm engulfing the industry – it would be hard for one of the biggest companies in the sector to avoid the headwinds. But it has also been leading the fightback.

Much of this appears to be driven by chief executive Kenny Alexander.

He has seemingly taken the stance that if his business is going to account for an ever-growing percentage of total customer spend and market revenue, he’s going to make sure that cash is coming from sustainable sources.

The initiatives are numerous and far reaching. The responsibility for implementing them, and ensuring they are successful, falls to director of regulatory affairs Martin Lycka.

Lycka and his team “have to be the jacks, not necessarily masters, but jacks of a lot of trades,” he explains.

“The bottom line is that the function [of the regulatory affairs team] is what the people who regard the function turn it into.”

Regulatory affairs is deceptively vague. As Lycka says, some could take that title and assume it’s the team responsible for applying for licences in different markets.

That includes “the joy of the US licensing process”, he adds – but also includes sports integrity. Corporate social responsibility, administered through the GVC Global Foundation, also falls within its remit.

Essentially it’s everything from the licences to regulatory risk.

At a time when a UK parliamentary committee is calling for online slots to be subject to a £2 cap, over a perception that the industry is some sort of rapacious monster bleeding players dry, social responsibility becomes a regulatory risk.

In Lycka’s eyes, the need for a new approach towards social responsibility is a simple question of sustainability.

“If you allow me to be cynical for a split second, nobody wants addicted gamblers in the market,” he says. “Nobody wants them to be their customers and we genuinely want to help them. We see that as our responsibility.”

To do this, GVC will have to patiently explain to industry opponents why arbitrary bans exist or limits based on “urban myths and misrepresented data”.

It could be argued that others have tried this approach before. In fact one supplier crunched the numbers, came up with the average spend on fixed odds betting terminals (FOBTs) and concluded that there was no need for a statutory limit on the machines. We all know how that went.

Data crunching
GVC, on the other hand, will not rely on some internal data that it claims proves its point and hope for the best. It inherited a partnership with Harvard Medical School’s Division on Addiction, which had previously worked with Bwin, then Bwin.party between 2005 and 2004.

This has been continued and expanded, but not just to produce a few peer-reviewed academic articles.

Through the relationship, GVC will provide the Division on Addiction with anonymised player data to be used for research into markers of gambling harms. This in turn will act as a stress test of its existing controls, allowing them to be refined and enhanced. 

“From GVC’s perspective, the key benefit of that cooperation is that our existing processes will get assessed,” Lycka says.

“Beyond that, if there are any loopholes identified, and we are told we need to step up in certain areas, or do something differently or better, then we will correct those learnings and reflect them in our product design.”

To an extent it appears to be a case of working out which battles are worth fighting, and where to cede ground.

GVC was a driving force behind the whistle-to-whistle advertising ban in the UK, for example, and is now pushing the industry to implement a total broadcasting ban.

Lycka argues that it “made sense” considering the size of the GVC business to take a lead on pushing for restrictions around advertising. Where it may push back, however, is on the issue of statutory limits.

On the FOBT side, the argument was lost long before the operator even acquired Ladbrokes Coral to gain a UK retail presence. For online, it’s still in play. That’s not to say it’s a fight to preserve revenue. It’s more an issue of player protection.

“Arbitrary statutory limits, in my view, cannot work,” Lycka says. What constitutes a fair limit, he says, is very subjective to the individual customer.

Something massively unaffordable for one player might be – to repeat a phrase used by a certain UK politician – “chicken feed” to another.

Limits should therefore not be based on what society as a whole can afford, but what that individual player can afford to spend, he continues.

Of all regulators, the GB Gambling Commission has, at least publicly, shown the greatest level of interest in using affordability as a determinant for mandatory limit setting.

In Lycka’s eyes, affordability is a more efficient way of protecting players than blanket limits. Overly restrictive arbitrary controls “actively incentivise” players to gamble with unlicensed operators, he warns.

This could be the ultimate consequence of the All-Party Parliamentary Group on Gambling-related Harms’ call for a £2 online slot limit.

“It seems to revolve around a very simplified consistency argument: ‘If there is a £2 limit for FOBTs, there needs to be a £2 limit for online slots’,” he says. “This is an over-simplistic approach for all manner of reasons.

“First, is it really consistent? Where is the consistency with the land-based casino market, where no such limits are proposed?

“Second, this approach risks driving customers to unlicensed, black market operators who will provide none of the player protections that are surely the goal of stakeholders who want to provide a safe environment.”

Altering perceptions
Many inside and outside the gambling industry would say this is common sense. But it’s damning that the industry has reached a point where the APPG can come out with a series of punitive new controls and be given the time of day.

Few would deny that in the past, the industry has failed to make a positive case for itself in the UK. Lycka admits gambling companies “only have ourselves to blame” here.

“I like to think that we are getting slightly better, but there’s a lot to learn on that front,” he concedes. The sign that these lessons are in fact being learned comes from GVC’s efforts in emerging markets such as the US and Brazil.

“I would argue that they present us with an opportunity to change the perception of the industry and again, make it slightly safer,” he explains.

“That was one of the rationales behind us launching the GVC US Foundation, partnering the National Council on Problem Gambling and Harvard Medical School.

“We’ll [also] be supporting the Seton Hall Law School to launch a gambling and hospitality university curriculum.

“I’m hopeful that in a foreseeable future we’ll be announcing other similar projects with other very reputable partners who will be only too keen on helping out with this type of education.”

GVC is certainly casting its net wide, but arguably this is necessary, to involve every stakeholder in the process, especially the customer.

After all, the success of these social responsibility efforts ultimately comes down to that end user. And as they’re the one that places a bet or decides against it, there’s a degree of personal responsibility that has arguably been overlooked by industry critics.

“I believe the customer’s role has been, to some extent, sidelined because the industry is expected to do a lot,” Lycka says. “There’s also an element of customer responsibility. I believe that we need to put them in a position whereby they get all the information they need.”

Let’s face it, these people are not helpless. Gambling is limited to those aged 18 and above in Europe, and often 21 plus in the US.

“It has to be a combination of regulation, voluntary action by operators, then the customer. The customer makes the final choice.”

Local behaviours
But the customer in the UK may make very different choices to a customer in Spain, for example. And for a business that is active in the vast majority of regulated markets, GVC can’t develop a strategy for one territory and guarantee it will work in another. 

In the UK, for example, it has spearheaded research into markers of harm, with nine key variables used to determine whether a player is potentially suffering from the ill effects of gambling.

In a different country, there could be six, or 11 markers, Lycka points out. What may mark a problem in one territory could be normal in another.

Let’s take Spain and the UK as an example.

“Typically, in the UK I would suggest that most people would be in bed by midnight,” Lycka explains. “If somebody is still up, on their computer and betting, that is definitely an indication of a potential problem.

“On the other hand, if you take Spain or Latin American countries, they typically wouldn’t have their dinner until half 10, if not later. Which means that they would more likely be placing a bet after midnight.

“Football is traditionally played later there too, so it could be a late night kick-off. So, the past-midnight marker of harm may not necessarily apply. The individualisation of the tests that are used for detecting problematic behaviour is important.”

He points out that as a fan of the New England Patriots, he might stay up to watch a game, which would not kick off until around 1am in London. Therefore if he placed a bet, he could – wrongly – be considered to have a problem.

“Individual quirks are absolutely important, just as when it comes to markets and to promotions we offer,” Lycka says.

“You wouldn’t necessarily be offering cricket markets in Sweden and you wouldn’t be offering hockey markets in the UK. [And] we would have to treat things the same way when it comes to responsible gambling.”

This individualised approach is being extended to sports integrity, another key tentpole in the GVC Foundation’s social responsibility efforts.

It has already partnered high-profile teams such as Borussia Dortmund in Germany and Italy’s Inter Milan, as well as establishing the German Sports Integrity Forum.

This comes as part of efforts to “educate anybody who would care to listen to us” about how the gambling industry can work closely with sports clubs to stamp out corruption, Lycka says.

“We’ve also included sports integrity clauses and integrity programmes in our sponsorship contracts with clubs.”

The motivation behind this, he adds, is exactly the same as the research project with Harvard Medical School: it’s about educating stakeholders on what the industry is actually doing to have a more positive impact.

As he says, the industry needs to get better in how it conveys what it does to a wider audience.

“Folks need to be better prepared to recognise the good stuff being won by the industry. Of course there’s a lot of bad stuff – less and less I would argue – and we’ve learned our lessons, usually the hard way.

“But it is still frustrating if you believe that you’ve done something great for your customers, something that will help them.”

The industry needs to “step away from the self deprecation”, he adds. “The key [goal] in my view is to learn how to put all those messages – CSR, efforts to protect players, and efforts to uphold sports integrity – out there in a more efficient manner.”

He argues that part of the industry today still fails to “shout from the rooftops” about the good work they are doing.

Lycka picks out Kindred as a business that has “led the charge” on responsible gambling across Europe, and effectively communicated its efforts to the wider world.

This isn’t self-serving in his view. Instead, it highlights that rather than GVC being the lone voice in a sector running scared of new regulations, there is a genuine, concerted, cross-sector effort to protect players.

“If I may convey one message in this interview – and I’ll sound like a cliché – we are all in it together, in terms of protecting the customer and at the same time actually making sure that we have created a safe environment, a safe space within which the regulated operators can exist.”

GVC may well have appeared the adult in the room in 2019, but if the industry is serious about making 2020 the year when things got better, it expects others to grow up too.

Subscribe to the iGaming newsletter