On 22 September, hacker Lilith Wittmann and a group of European media outlets published leaked files from Curaçao’s licensing portal, naming the owners behind hundreds of offshore brands, some of which had been profitably targeting regulated markets for years. It was a bad day at the office for some shady operators, but it didn’t last.
Three days later, and days before the election, President Luiz Inácio Lula da Silva handed them an open goal: an emergency decree banning online betting and gaming in Brazil, less than two years after licensed operators had each paid BRL30m (£4.5m) to enter the market. By the next day, monitors were tracking 575 illegal sites targeting Brazilian players.
Closer to home, in mid-September, the House of Lords Liaison Committee called for a comprehensive ban on gambling advertising. Less than two weeks later, the Dutch parliament voted down a blanket ad ban, in line with its regulator, the KSA, which warned that restricting legal advertising simply cedes ground to illegal operators.
Tellingly, one of those operators features prominently in the Curaçao leak. The KSA fined Qbet a record €24.8m in March, yet the site stayed live. It’s one of many brands exploiting a Dutch market where high taxes, strict deposit limits and advertising curbs have helped push more than half of online gambling spend offshore.
The UK isn’t the Netherlands. Recent estimates suggest around 90% of play here stays with licensed operators. But with remote gaming duty having nearly doubled to 40%, financial risk checks on the way and an ad ban back on the agenda, the direction of travel feels familiar.
Governments have a tough gig. They have a duty to minimise gambling harm, and, awkwardly, they take a cut of every pound lost on a licensed site. Too light a touch and harm rises. Too heavy and you hand an advantage to unlicensed brands, leaving the players who drift there with no protection at all. Nobody has yet found the right balance. So how do we get closer?
Tackle the black market first
The one area of near-universal consensus is that black-market advertising needs far tougher policing. Anyone close to the industry will have seen the stream of social media ads with ‘Non-GAMSTOP’ as their selling point. Estimates of the UK black market vary depending on who is measuring, but at a More in Common and Coalition to End Gambling Ads fringe event during Labour’s Annual Conference in early October, the new gambling minister, Vicky Foxcroft, said she is concerned about “the growing of” illegal gambling, and that when it comes to taking sites down, “we’re just never able to be fast enough”.
To tackle it, three things need to happen. First, the Gambling Commission (GC) needs the site-blocking powers it is now seeking. Second, social media platforms must be held responsible for the volume of illegal ads getting through. Third, suppliers and payment firms that give illegal operators their infrastructure need to face real consequences.
The GC’s £4.75m settlement with Evolution, after its games appeared on unlicensed UK sites, is a start. Even Will Prochaska of the Coalition to End Gambling Ads told the same audience at the Annual Conference he had found 18 UK-licensed software providers on the two most common illegal sites.
Remove, or let’s be honest, reduce, the threat from illegal operators, and we create a far better basis for sensible debate about where gambling brands should appear. For advocates of tighter controls, it would also remove the industry’s strongest argument against them.
Evidence- and outcome-based decision making
Debate on both sides is too often driven by contested statistics used selectively, and by anecdotes presented as fact. That same event opened with Alex Ballinger MP describing being “constantly bombarded” on social media “not just by regulated casinos, but unregulated casinos as well”. Half an hour later, Prochaska dismissed the “black market bogeyman”, stating that “we know” the licensed market accounts for 96% of gambling. Nobody on the panel tried to reconcile the two.
The minister said, “we’ve got to work together following the evidence”. Prochaska’s response: “How much more evidence do we need?” The industry is no better, often leaning on the highest black-market estimates while the GC stresses how little is known.
The problem is as much who is in the room as what is said in it. Even the event’s chair, James Noyes, a senior fellow at the think tank the Social Market Foundation, acknowledged criticism that the panel risked being “a bit of an echo chamber”. Industry conferences are often no different, and online the loudest voices on both sides trade insults rather than arguments.
Policy this important needs independent experts. People with lived experience. Regulators and operators. Plus those who must deliver it: broadcasters, tech platforms, payment providers and the firms building risk-check and self-exclusion systems. A policy that can’t be delivered protects no one.
To put the evidence on a firmer footing, we need:
- One independent way of measuring the black market, owned by the GC
- Research funded by the statutory levy rather than by either side
- Proper reviews of measures already introduced before new ones are added
Time for the industry to step up
There is more the industry could, and should, be doing itself, starting with what it markets. Spend a day listening to talkSPORT, watching Sky TV or scrolling Instagram and you will encounter several sportsbook and casino brands offering a near-identical proposition. Free spins on Big Bass Bonanza or Fishin’ Frenzy are ten a penny, and that sameness only deepens the public’s sense of being bombarded.
Few industries are in such an enviable position when it comes to customer data. It should be used to define far more tightly who a brand’s core customer is: recreational players who enjoy the product and can afford it. That means smarter marketing rather than ‘spray and pray’, with at-risk customers firmly excluded, and genuinely differentiated products.
Having reviewed behavioural data from several UK brands over the years, I’ve found it is not unusual for close to half of new customers to be active on just one day. That churn-and-burn cycle needs constant, high-volume advertising to keep it going.
Break it, and the industry would spend less to acquire customers who stay for the right reasons, and put out fewer ads, which is precisely what its critics are asking for. It is rare for commercial self-interest and public interest to point so clearly in the same direction.
Getting the balance right
The UK has a rare opportunity. A new minister is weeks into the job, there is talk of a new gambling act, and consultations are under way. Get it right and Britain could show the world how to regulate a market that is both safe and competitive. Get it wrong and we risk following the Netherlands or, at the extreme, Brazil.
The order matters. Tackle the black market first, agree on the evidence, bring in the people who will deliver the policy, and accept that the volume and sameness of the industry’s marketing are part of the problem. An outright ad ban may yet come. But if it does, it should be a decision taken on evidence, with eyes open to what fills the space. Striking the balance is hard. Not trying is harder.
Gerry Murray is director and co-founder of Cyclickal, a specialist betting and gaming consultancy that helps operators and media owners grow through data-driven insight. Over the past 12 years he has worked with regulated UK brands including 32Red, Unibet, Betfair, Lottomart, Casumo, Merkur and Happy Tiger, as well as media owners such as ITV. Before that, he spent 10 years at media agencies, working on sports and entertainment brands including Sky, FOX Sports, UFC and BBC Worldwide.
The post Striking the right balance: the future of UK gambling advertising first appeared on EGR Intel.
With a new gambling minister in post and a blanket ad ban on the table, Gerry Murray of consultancy Cyclickal argues the first aim should be to tackle the threat posed by the black market
The post Striking the right balance: the future of UK gambling advertising first appeared on EGR Intel.