We are living in the age of the socially conscious consumer. Today, a businesss sustainability can have as much of a bearing on whether people will interact with them as their products.
While these trends have been developing over a number of years, driven by consumer goods giants such as Unilever and Proctor & Gamble, recent evidence suggests they are being accelerated by the novel coronavirus (Covid-19) pandemic.
For example, 62% of UK consumers polled by Deloitte Digital in October suggested they were more likely to spend with companies that have taken extra steps to ensure the safety and wellbeing of their customers under lockdown.
Conversely, one in five claimed to have stopped availing themselves of a brand’s services or goods because of the business’s response to Covid-19.
That same survey revealed that 28% of respondents planned to reduce spending in the wake of the economic disruption caused by the pandemic. In addition, 44% said they had opted out of marketing messages under lockdown.
So with consumers spending less – out of necessity or concern about economic prospects – and being harder to reach through advertising, businesses must work harder to engage these consumers. If they present a socially conscious front, the user will expect that to translate into discernible action. Those that complete these steps will be rewarded with customer spend. Those that fail to do so will lose business.
This is a particularly tricky path for the gambling industry to tread. Efforts to present a sustainable front are greeted with suspicion, at a time when public perception, in Europe at least, has shifted firmly against the industry.
In February, the GB Gambling Commission’s 2019 Behaviour, Awareness and Attitudes Report revealed that 73% of respondents saw gambling as bad for family life. The number of people who believed consumers should be allowed to gamble whenever they want declined two percentage points from the 2018 edition, to 60%. A significant majority (82%) believed there were too many opportunities to gamble.
The survey revealed that 29% of consumers, up from 25% in 2018, thought gambling should just be banned altogether.
The wider European context arguably paints a bleaker picture. Gambling advertising and sponsorship has become a target in multiple jurisdictions, to the point that it is banned in Italy and heavily restricted in Spain.
Lawmakers in Sweden, Finland and Germany have gone as far as to introduce product-specific spending and stake limits, something that is likely to be under discussion as the UK government reviews the 2005 Gambling Act.
It’s against this backdrop that the industry is undergoing an evolution, as it looks to make real-money gaming a safe and sustainable entertainment option. And the starting point for any gambling business, in any market or channel, will always be player protection.
Building the foundations
“I consider responsible gaming as the backbone of any gaming operator,” corporate social responsibility consultant, and former director of responsible gambling for La Française des Jeux, Raymond Bovero says.
In Bovero’s eyes, maintaining a standard of player protection acts as a “licence to operate”, from which all other CSR and sustainability activity grows from.
Gwen Migita, vice president of social impact, sustainability, diversity, equity and inclusion for Caesars Entertainment (pictured below), agrees: “I think the references to player protection are where companies may start,” she explains.
“You look at regulatory compliance-oriented features as a starter strategy, and then they tend to move into the broader aspects which are voluntary, such as environmental sustainability, workforce diversity, social justice.”
Joachim Haeusler, head of corporate responsibility for German operator Tipico, argues that establishing a sustainable business is not only the foundation of any strategy, but it’s ultimately the most important element for a market leader in the igaming sector.
“You have a product, and the quality of that product – and whether it hurts the consumer – is the most important part of your sustainability reporting, supported by the other components.”
However, there is broad agreement that while player protection should be at the centre of industry sustainability, businesses can indeed go further and faster in developing a more sustainable business. Gamesys’ newly-appointed director of sustainability Kevin Clegg points out that the fact he was brought in for the role is evidence of that.
“The wellbeing of our players is of primary importance, as part of our Sustainability Strategy, but equally we want to be recognised for our care towards our employees and also how we can contribute to the environment and society as a whole,” he says.
Top down, bottom up
Clegg (pictured below) says that employee engagement is a key component of Gamesys’ sustainability strategy, pointing out that a recent staff survey showed 99% of respondents believed that the Jackpotjoy operator takes player protection seriously.
However, this employee buy-in, or bottom-up engagement, only works in tandem with management support, Migita adds.
“Every strong strategy has to have a strong top-down buy-in, with [leadership] vision and goals,” she explains. “Then from the bottom up it has to mean something to the individual, whether that’s a front-of-house employee, housekeeper or attendant, so it has to be bottom up and top down.”
One does not work without the other, she suggests. “If you think about broader sustainability, you need to get the support from the CEO, leadership team and board, and understand what their vision is.
“It’s important to be clear about the goals for diversity and have operators [property management] embrace that goal without feeling it is being dictated, and understand how it fits into their own goals.”
It’s often a case of fulfilling staff expectations about their employer, Haeusler (pictured below) suggests, pointing to one of the surveys carried out when Tipico began to monitor and measure sustainability efforts. A “huge majority” of colleagues said it was important to work for a responsible operator.
Part of this was simple, he says: “When they read an article about problem gambling, they want to read it, understand it, and know how they address the problem.
“Otherwise they can only go into denial, so there’s a very intrinsic motivation.”
This fits in with Migita’s argument that it’s about empowering employees, through communications and engagement. As well as direct action such as volunteering or raising money for charities, this could also take the form of a resource group focused on LGBTQ+ empowerment, and how the wider community and allies can support that community, she says.
“It has to be translated to that individual, to mean something to that housekeeper, valet attendant, so team members feel part of that culture.”
The US land-based sector is arguably further ahead in this regard, Migita continues. “Without diving deeper into a few other regions in the world, I’d say socioeconomic sustainability that involves philanthropy and volunteerism is more unique and visible in the US,” she says.
Caesars’ commitment to CSR saw the business invest $67m in the communities its properties serve last year, including the value of 370,000 hours volunteered by team members. In total, staff have logged 1.5m in volunteering hours over the past five years, and the business claims to return 46 cents to communities for every dollar earned by the business.
While it may be more established in the US, operators in Europe are also embracing volunteering and supporting good causes that reach beyond the confines of the industry.
Tipico, for example, supports employees that participate in regional projects by donating their time to local charitable associations and projects centred on society and the environment. These range from ventures organised independently, to departmental or company events, such as its IT department auctioning off old tech to both recycle the equipment, and raise money for good causes.
Clegg, meanwhile, suggests that Gamesys’ decision to donate Jackpotjoy’s sponsorship of ITV’s daytime show Loose Women to domestic abuse charity Women’s Aid during the UK’s Covid-19 lockdowns was driven by employees.
“Staff love all the work we are doing through our Charitable Foundation which was launched earlier in 2020,” he adds. “Its key objectives are to alleviate mental health, loneliness and isolation. Since we launched Gamesys Foundation we have formed national and local partnerships that are close to the heart of our employees.”
Through the foundation, Gamesys has encouraged employees to support charities of their choosing through fundraising and volunteering, and donated £550,000 to charitable causes, including $250,000 to help communities in the Bahamas affected by Hurricane Dorian.
But that empowerment and engagement has to be harnessed to constantly raise standards and enhance sustainability efforts year after year. If staff are engaged, defined goals give them something to strive for.
This approach is being rapidly adopted by the industry. Kindred Group aims to wipe out all revenue from problem gamblers by 2023, and GVC Holdings – soon to be Entain – has declared that it will generate all revenue from locally regulated markets by the end of 2022.
These are ambitious targets, but Clegg insists that operators need to be aim as high as possible.
“One of our internal values is to ‘shoot for the moon’ and when it comes to sustainability we aim to do just that,” he says. Even if the most ambitious targets are ultimately not met, “a lot is achieved along the way”.
Haeusler argues that sustainability is about demonstrating the effects of your projects, and having clearly defined goals encourages transparency when discussing efforts.
“It’s about describing the rocky trail you climb when moving towards your target,” he explains. “And it’s fine that it is rocky.
“I think evaluation and upfront defined targets are an important thing, so that it becomes visible, when measures didn’t go so well. We’re a dynamic industry in which change is the only constant, and one unexpected side effect in a regulatory requirement can totally change a market.”
Bovero admits it is “very difficult” to set such targets.
“Once again the least to be done is to measure the effects of any innovative move one makes,” he says. “If you really innovate, then you [will not] always be successful. Success is a wonderful feeling, but one can learn a lot with some failure as long as you do not fail too often and really try to understand what was wrong.”
And some goals are easier to quantify than others, Migita adds. It’s easiest to set environmental targets, for reducing or recycling waste, or reducing consumption, but when it comes to player protection or equality and inclusion, things are less clear cut.
“I think unlike in environmental or economic goals, it is difficult to compare company to company when it comes to RG and inclusion, so I think targets, and following global standards such as Global Reporting Initiative for reporting, and Green Key for hotels are helpful.”
This again requires employee buy-in, with training, followed by appraisals of the training.
“This is where global guidelines such as the Global Reporting Initiative come in, where you can compare between companies and between industries,” she continues. “In the hotel industry we comply with the Canadian association Green Key Global, which consists of 200 questions about management and environmental social and economic sustainability issues.”
Ultimately sustainability comes down to securing buy in, then testing, tweaking and testing again. Operators, if they are to become truly sustainable businesses, and help overhaul public perception of the industry, have to be committed for the long-term.
“The great thing about sustainability is that you can always strive to do more, whether that be to look after your players, reduce your carbon footprint, contribute more to your community or improving the engagement of your employees,” Clegg says.
Migita agrees: “We as with many companies can always go deeper, for sustainability to be embraced at an operator level rather than as a corporate directive,” she says. “Few companies have been operator-driven and I think this is why strategies don’t last, as it needs to be embraced and owned by the operators.
“That is even less of a norm across our industry, so we are trying to have more collaborative goals, and make a lot of behavioural changes at an operator level.”
There have been a lot of positive steps. Whether that’s the in-depth reporting on player protection and sustainability efforts that make up a significant portion of operators’ financial results, or more direct targets such as GVC/Entain linking bonuses to player protection targets.
However, considering the wide-ranging efforts taken by other sectors, few would argue against the idea that gambling has a long way to go to catch up, even if businesses are taking the steps to get there.
Bovero says this is not necessarily to the industry’s detriment. Instead, he says in conclusion, it can be used to its advantage: “If one wants to be inspired by what is done in other [companies], take enough time to know what is done, then find out why it was done and how.
“Then ask yourself what has to be changed for your territory; adapt the why, the what and the how to your context,” he says. “If there is no better recognition than being copied, I do believe that one has to do some thinking and changes to make it efficient for his or her company.”