Igaming Focus: Responsible gambling — warning signs are on

March 30, 2023 8:00 AM

Igaming Focus: Responsible gambling — warning signs are on

Photo: Shutterstock
  • Jake Pollard, CDC Gaming Reports
March 30, 2023 8:00 AM
  • Jake Pollard, CDC Gaming Reports

The topic of responsible gambling and the industry’s alleged failure to address it has become a lot more prominent in recent months. This is not surprising and is not going to abate.

As mainstream publishers cover the issue, the debate around responsible gambling continues to gather steam and it seems clear that how the industry responds to the criticisms will be one important aspect of how it will evolve. But just as important will also be the concrete actions it puts in place to fight problem gambling and help players who are at risk or develop addictions. 

So far the most high profile anti-gambling screeds have appeared in media outlets like The New York Times and more recently Newsweek. They have been published as exposés charting the dangers of widespread regulated sports betting to young bettors (mainly young men), the unrestricted access gambling companies now have to major advertising and communication platforms, and the role lobbying plays in getting regulations through state legislatures. 

Young exposure
Many of the arguments that are made against the expansion and increased availability of gambling products are not new, but some are worth repeating. 

For example, Newsweek said the industry’s expansion since the PASPA repeal of 2018 has opened up sports betting to scores of young men, many of them in their early 20s; and the theory is that this enhanced ease of access enables these young people to familiarize themselves much more quickly and at a younger age with sports betting than would have been the case in the past.

And as they become regular bettors, a proportionately higher percentage of them will develop a range of gambling addictions, debt or psychological problems than would have been the case had wagering products not been made as easily available as they have been since 2018. 

Meanwhile, regulators have also been taking tougher actions on advertising breaches and states such as Minnesota have introduced restrictions on where operators can market their products.   

Industry response
Commenting on these developments on social media, Chris Grove, co-founder and partner of Acies Investments, said the industry was by and large responsible for this state of affairs and one of the factors behind it was that at “a macro level, no one seems to have prepared to play any defense – only offense. All the PR went into getting bills done, with very little resources preserved for protecting gains”.

Grove told CDC Gaming that while “this kind of backlash tends to come in waves”, the industry “should consider a supplemental trade group focused exclusively on a mix of national and local PR for the online betting industry”.

In addition, although much of the current criticism is aimed at bookmakers, when it comes to messaging and campaigning, different parts of the industry have very different goals. “While support from legacy trade groups remains essential,” explained Grove, “the wants, needs, and priorities of retail casinos and online operators simply don’t have total overlap.” 

As Grove alludes to, it’s worth wondering if the (seemingly) inexorable expansion of sports betting in the past five years has left the industry unprepared in how to respond to critics. The American Gaming Association has launched a number of responsible gambling awareness campaigns, but operators’ focus has very much been on launching in new jurisdictions, promoting their products and grabbing market share. 

Look across the water
Readers of this column will be aware of the fears this reporter has expressed with regard to U.S. operators letting a bad situation worsen when it comes to responsible gambling. It’s also worth pointing out that regardless of where one stands on the issue, the worries that have been expressed about the risks gambling can represent to vulnerable players are understandable. 

Comparing the U.S. with a mature UK market, another important element in how the debate has (or, maybe more appropriately, hasn’t) evolved on this side of the Atlantic is that for all the aggressive campaigning from both parties, many of the statements about the impact of gambling on consumers seldom mention data or evidence that is fact-based. 

That is because the campaigning from the anti-gambling lobby largely focuses on highly emotive and desperately sad cases of family or financial breakdowns, while in the background there are also myriad technical arguments over which bodies fund research into addiction or about the accuracy or otherwise of the economic or social costs caused by gambling harms.

The latest developments stateside follow (yet another) record fine for responsible gambling and anti-money laundering failings by a leading UK brand. But what is also striking about the details of the fine issued by the UK Gambling Commission to, in this case, William Hill, is that they are for very similar failings to the penalties it recently issued to Entain and Kindred

Warning signs
For all the furor around addiction and problem gambling, what is also fueling much of the backlash against the industry in both the U.S. and Europe is the visibility that mainstream advertising provides. 

Indeed, while some critics might oppose gambling for all sorts of reasons, the highly visible presence of so many brands on sports jerseys, stadium hoardings and during advertising breaks has, to use a pun, raised the stakes to levels few would have foreseen not long ago.    

That is also why regulating states are setting out ever tougher rules and enforcement actions and why some commentators believe U.S. operators should reset and rethink their “current bigger, faster, stronger strategy”.

As for the U.S. market seeing similar regulatory clampdowns to those in Europe, Grove warns: “We’re still quite a bit away from the kind of oversight we see in the UK. I’m not sure you’ll have the cultural tolerance for that kind of invasiveness in the U.S. But what I can say confidently is that if our industry doesn’t start doing things differently, the UK outcome becomes increasingly more likely.”