Paul's Blog February 19, 2018 UK Gambling Commission reigning in commercial and secondary lottery betting companies
Paul's Blog February 19, 2018 Op-Ed Commentary on Today's News Paul Jason, CEO, PublicGaming Research Institute (PGRI)
UK Gambling Commission reigning in commercial and secondary lottery betting companies
The UK is the most open, liberal gambling market in the world. That’s why it is so gratifying to see the major push-back against gambling models and trends that are contrary to the interests of the consumer and society.
The actions taken by the Gambling Commission are long-overdue remedies to an the double-standard applied to commercial betting operators and government-lottery operators. Think about the strict rules and constraints applied to the ways that Lottery is allowed to advertise its products. Compare that to what the UK Gambling Commission describes as commercial betting companies’ direct appeals to problem gamblers; promoting free bets and bonuses to entice new players; “bet now” type ads that stimulate a sense of urgency and FOMO (fear-of-missing-out) during the scramble of live-event betting; tapping into psychological and emotional vulnerabilities to encourage repetitive play; deliberately undermining prudent risk-assessment with “Risk Free Deposit Bonus” pitches, and generally promoting gambling without regard for social costs and welfare of the players.
Commercial betting firms always protest that they are just as capable as Government Lottery when it comes to operating in a responsible way that is sensitive to the social costs of gambling. That may be true, but the record shows they just don’t do it. To my mind, there are simple and obvious reasons why they don’t do it. Their fiduciary responsibility is to maximize value for shareholders, not society. Of course, they must accomplish that mission while also complying with the laws. And now that the UK Gambling Commission is raising the bar of what is expected from commercial betting firms, I’m sure they will adjust their methods accordingly to make sure that their methods do not result in fines or losing their license. The problem is that the inexorable DNA of commercial enterprises is to relentlessly search for the edge, the “innovation”, that leads to increased sales and profits. Applied to CPG, the drive to increase consumption has little or no negative impact on society. The drive to increase consumption of gambling products, however, has collateral social costs. You don’t see Government Lottery constantly pushing the edge of the envelope when it comes to complying with the spirit as well as the letter of the laws that protect the consumer and society. That’s because the DNA as well as the mission of Lottery is to serve charitable causes and society.
The UK Gambling Commission recently told Lottoland that they could not take “secondary” bets on the outcome of EuroMillions. Lottoland tried to get around the mandate by saying that the secondary bet they were selling wasn’t on UK EuroMillions, it was on EuroMillions in other countries. Thankfully, the UK Gambling Commission has now clarified its ruling to prohibit secondary lottery bets on ALL EuroMillions no matter which country it is played in. Australia is taking similar measures to rid itself of this parasitical business model. We have a long way to go to preserve the integrity and stability of the government lottery business, but it is so encouraging to see institutions like the UK Gambling Commission coming to the defense of society and the consumer. A positive sign that governments might be willing to exercise their responsibility to enact and enforce laws that protect the consumer and society comes from the country of Uruguay, which is now blocking international online gambling sites. It can be done. Uruguay is doing it. The U.S., Australia, UK, France, and others are making great strides towards prevention of illegal operators from entering their markets.
Svenska Spel ends the year with a strong final quarter. This is interesting and important for a couple reasons. First, Svenska Spel implemented a mandatory registration just four years ago. And it was not an ease-in process, it happened almost overnight. To be sure, sales declined the first year. But the trend-line turned around the next year, and sales increased in the years since. Slight ups and downs but stable revenues. Quite impressive in light of mandatory player registration. And now Svenska Spel has a fully registered player base which should serve it well in the years to come. The Swedish market will be undergoing major changes, opening up to multiple licensees competing for the consumer games-of-chance dollar. It will be instructive to follow the activities of Svenska Spel during this time of change, especially to see the effect that a registered player base will have on Svenska Spel’s ability to compete in a more open market-place. “We are still maintaining our strong position as Sweden’s premier gaming company and meeting customer demands in terms of the gaming experience, with a wider range and product development. Customers are giving us high scores in our Satisfied Customer Index, and we have the highest image value in gambling companies, by quite some margin,” says CEO Lennart Käll.