As we look to the year ahead, industry experts share their thoughts on the opportunities and challenges facing the industry.
In the final part of our eight-part series, we talk to experts in social responsibility. In part one we heard from igaming operators and suppliers, then in part two land-based operators and suppliers.
Maris Catania, head of responsible gaming and research, Kindred
Grainne Hurst, group corporate affairs director, Entain
Daniela Johansson, deputy CEO and chief responsibility officer, PAF
Matt Zarb-Cousin, founder, Clean Up Gambling
Looking back at 2020, what – other than the Covid-19 pandemic – did you feel was transformational for the industry? And how much of a lasting effect do you think the Covid-19 pandemic will have going forward?
Maris Catania: I think one of the more transformational things for the industry was the fact that we had to shift to working from home with less than a week’s notice. For some colleagues this might have rendered quite a difficult transition, whereas to others, we can see that it has calmed down our hectic lifestyle. Being someone myself who would need to travel at least once a month, moving to not travelling for almost a whole year, I can see that remote working and participating online in conferences has become the new norm. I think both these aspects will have a major impact for operators as we are seeing a new way of working, which perhaps might help people look into more work-life balance.
Grainne Hurst: Technology without a doubt has been one of the key drivers of keeping everyone connected during the pandemic. What is most interesting is how technology can be a disruptive force for good – both in protecting our players but also in offering them new experiences. A great example of this was during the first UK national lockdown. With the absence of some significant sporting events, we saw a rise in virtual sports.
Daniela Johansson: Social responsibility and sustainability is now seen as a strategic necessity for at least a majority of the operators and suppliers in the industry. We can definitely see that the Covid-19 pandemic has fast-forwarded the transformation in the gambling industry when it comes to social responsibility. During the year we have seen stricter regulations from a political and regulatory perspective. Even though they are said to be temporary restrictions, I do believe that they will continue in 2021 and going forward.
Unfortunately the gambling industry doesn’t have a good reputation in the eyes of the public and we now see stricter measurements being taken from a regulatory perspective. An effect of this is that gaming companies will need to adapt to a new business model where they have to rely on another type of customer database, with players not spending as much. This will put pressure on cost efficiency and mean that new ways of working are needed in order to have a profitable and sustainable business.
Matt Zarb-Cousin: The House of Lords Gambling Industry Select Committee report definitely felt like a watershed moment in terms of foregrounding both the urgency and breadth of the gambling reform agenda. The quantity of recommendations and cross-party support of their inquiry into the impact of the 2005 Gambling Act have definitely set the tone for the recently announced Gambling Act Review, and added to an influential chorus including the Public Accounts Committee, the Gambling Related Harm All Party Parliamentary Group and the Social Market Foundation, all of which identified a consensus in what the government should prioritise when it comes up with its recommendations following the call for evidence.
What do you feel is going to be a ‘game-changer’ for the industry in the coming year?
MC: From my end I will always be considering the safer and responsible gambling approach, and I think this should really be the focus for every operator this year. The pandemic, through lockdowns and spending more time at home, might have resulted in more issues for some players, and I think this should really be the focus of what we do. Operators should really look into focusing more on consumer protection and sustainable revenue.
GH: The rise in opportunities for online gaming and sports betting in emerging markets continues to be a game-changer. These newly regulated markets have also seen developments in online payment mechanisms and the proliferation of technology such as smartphones and tablets are key drivers for business growth. With this opportunity comes responsibility and therefore it is important to continue the high level of player protection measures in these emerging markets. Sustainability and responsibility work harmoniously together to create a successful and reputable business.
DJ: The discussion on affordability will most likely continue in the coming year. On one hand, you have the gambling companies lobbying for voluntary limits set by the players themselves and systems for detecting risky gambling patterns, which are not always easy to understand in terms of how they work or how effective they are. On the other hand, you have the policymakers and politicians, who want clear and easy to understand regulations. My guess is that we will see stricter blanket limits in several jurisdictions.
However, I don’t think that we will yet see that many global limits during 2021, where the player sets one limit that is used for all gambling across different operators. Not having global limits will mean that players who want to play more than their set limit will move across operators and brands. From a social responsibility perspective, players will still be able to lose big sums of money but the spending will be distributed at several different operators. One effect of this will probably be that we will see fewer VIP programmes in the future within the regulated markets.
MZC: There is a certain degree of inevitability to stake and speed limits for online slot and casino content, as given this has been included in the call for evidence it is very difficult to argue against parity for similar content on machines in land-based venues. The affordability model that emerges from this review has the potential to be the real game-changer, though. While the Gambling Act Review’s call for evidence is ongoing, the Gambling Commission will be deciding on the model to implement in the interim. The success or otherwise of this is likely to determine the extent to which the government will intervene further. Britain has the potential to enact a system that prevents unaffordable losses while not impacting those who can afford above a deposit threshold where more rigorous checks would take place.
On the other hand, what do you feel could disrupt the sector or slow progress?
MC: In this day and age, we see more research published, and more individuals with lived experience speaking about what consumer protection should look like. Nonetheless, at times it seems that stakeholders, including industry operators, might not be looking into this fountain of knowledge, and therefore making changes (or not making changes) that hinder consumer protection, which can negatively impact gamblers and affected others. We should be working together towards sustainable gambling and not exploitative gambling.
GH: We have seen the launch of the Gambling Act Review by the government recently. Entain has welcomed the review, and that the government has stated the outcomes must be evidence-based and proportionate to the problems they aim to solve. Player protection is paramount, however, the ‘one-size fits all’ approach to regulation is something that could cause regression in the progress the industry has been making with safer gambling. As we have seen recently with regulatory developments in countries such as Sweden, there is a danger that overzealous regulation sadly drives customers to the unregulated black market, where there are no player protection policies.
DJ: Channelisation is a key question that will be important for the industry going forward. If the channelisation is too low, the responsible gaming measurements will only protect the players playing with regulated operators. This is neither good for the players nor for the industry. Cooperation and willingness to develop the sector will be important for regulators, politicians, operators and suppliers to avoid slowing down the progress.
MZC: It would be better for all sides of the gambling debate – both reformers and the industry – if the government does not delay putting forward its recommendations following the Gambling Act Review’s call for evidence. It is expected that the white paper is likely to be published around summer 2021. Everyone concerned with this issue would prefer progress to be made as quickly as possible, and for the reforms to be enacted by 2022.
What do operators and suppliers need to do in 2021 to show their commitment to social responsibility?
MC: Actually commit to it! We need to get to a point that as operators and suppliers, what we are doing is to minimise harm and not maximise revenue. In the long run, if harm is minimised, collaborations with stakeholders (research, education, treatment, lived experiences) are formed and changes are made for consumer protection to be the main goal of the industry, then the harm prevented will outweigh any other company goal.
GH: There are a number of ways to show commitment to social responsibility, however the key thing is to make sure it is at the core every part of the business. At Entain we launched Changing for the Bettor – our safer gambling strategy, which is made of seven pillars and has transformed the way we operate by keeping safer gambling at the centre of what we do. Furthermore, we have launched the Entain Foundation, which oversees all of our CSR initiatives, and have committed to donating over £100m to the Foundation over the next five years.
DJ: Transparency will be the key in order to gain trust for the gambling industry in the eyes of the public and policymakers. As an industry we are not trusted and different surveys have found the gambling industry is one of the least trusted industries. The first step to change this is to be transparent regarding the customer database and segments and to show the effectiveness of the responsible gaming measures implemented. Also, I would like to see more true commitment to responsible gaming, where operators and suppliers really care about their customers – basic things like integrating responsible gaming into the customer journey, providing high-end tech tools and taking actions when needed, even if it will hurt the business.
MZC: Operators and suppliers should engage constructively with the gambling review. As the House of Lords Gambling Industry Select Committee found, 60% of profits coming from 5% of customers is unsustainable. This figure presents a challenge for regulators, for government and for the industry. Reducing harm will mean reducing profits in the short term, but it will mean the long-term viability and sustainability of the sector in the face of increasing public, media and political pressure.