Thanks to the right confluence of luck, a thriving local industry, and a benign regulatory regime, the UK has now become one of the biggest beneficiaries of the rapid growth in the $44.5 billion online gambling sector. The market has doubled in size over the last 10 years and approximately 50% of its worldwide revenues now come from Europe, above all from countries like Great Britain and Malta that have seized onto the growing opportunities in the sector. As the attractiveness of online gambling continues to rise, experts believe that the market will hit $66.59 billion by 2020.
More than 95% of gamers take part in the increasingly popular pastime with no ill effects. Yet with the sector surging, it’s welcome news that UK-based firms have announced a new effort to leverage the consumer data in their possession to identify and corral off the small percentage of users who do run the risk of becoming hooked. They hope to create an industry-wide framework to help companies zero in on potential ‘problem gamers’ and intervene before they have a chance to become addicted. Such an initiative has been long overdue. Like most online businesses, gambling companies have jumped on the ‘big data’ bandwagon, bringing about new innovations like high-precision calculations of betting odds. Where the sector is still catching up, however, is in using big data to prevent addiction.
The move came soon after research commissioned by the charity Gamble Aware and carried out by PwC revealed that data already held by gambling firms could help them spot potential addicts before they develop serious problems. Key data points include the number of times someone bets per day, a surge in the amounts being bet, time of day, and demographics. Combining some of the known red flags with the user data already in the hands of online gambling firms would go far towards harmonising and improving the ways that unusual patterns of betting are identified and acted upon.
The report by Gamble Aware comes at a time when there are substantial safeguards in place, but most of them exist to cut off people who already have a problem. In the UK, for instance, a number of firms have recently been subject to crackdowns by the Gambling Commission for failing vulnerable consumers. Most recently, gambling firm 888 was slapped with a record fine of £7.8 million for failing to cut off customers who had voluntarily banned themselves from their accounts, showing that there are still holes in the company’s consumer protection system. One customer, for instance, was permitted to make 850,000 bets worth a whopping £1.3 million over the course of a year – using stolen funds. Earlier this year, the Gambling Commission sharply criticized the industry’s approach to resolving disputes and complaints, saying there had been a major decline in the number of consumers who think that gambling “is fair and can be trusted.”
In contrast with the UK, other markets, such as Malta, show that it’s possible to maximise consumer protection and prevent problem gambling without kicking out online gambling firms – which contribute 12% of national GDP and employ roughly 9,000 people. Malta has been at the forefront of calls to ensure that consumers benefit from stronger protections when they engage in online gambling. For instance, the Malta Gaming Authority (MGA) is the only major regulator with a dedicated Player Support Unit. The MGA supports consumers who wish to self-exclude from the websites it regulates, which comprise active licenses held by more than 500 companies – the highest number in Europe. Major gaming companies such as Betfair, Betway, and bwin all operate in Malta, and others are expected to follow suit, with 888 recently suggesting that it might move its HQ from Gibraltar to Malta after Brexit. This makes the role of the MGA in overseeing the online gambling industry critical not only in the country but across Europe – and one that other markets would do well to mirror.
Given the track record of certain actors in successfully barring problem users from accessing their services, a new approach that melds regulatory bodies with preventative measures that leverage big data would be the best way to stop problem gambling in the UK. As Gamble Aware’s chief executive, Marc Etches, put it: “This is a sector that represents more than 40% of gambling and will soon be more than 50%. [Gambling websites] have access to data in a way that offline businesses don’t, so they need to up their game.”