Gambling operators must find a balance between driving revenues and responsible gambling; no wagering bonuses are one way of doing this, says Pavlos Sideris, director of Double Up Media.
A regulated gambling industry has always meant striking a careful balance between revenue growth and player safety, balancing all elements to ensure gambling businesses provide an ultimately fun product that keeps players safe but also satisfies shareholders. It sounds complicated, and it is, especially with new UK gambling regulations just around the corner aimed at increasing player protections and potentially compromising revenue through affordability checks and per-player budgets.
How do operators create a fair balance
Gambling operators in the UK are bound by the Gambling Commission’s (UKGC) Licensing Conditions and Codes of Practice (LCCP). This document is continually updated with all operator rules and guidelines. When discussing player safety, we often discuss financial safety, anti-money laundering; and responsible gambling. For this article, we’re focusing on the latter.
Responsible gambling means to ensure that consumers gamble responsibly – in a way they can afford and that doesn’t cause harm, such as debt or gambling addiction. For the last decade, the majority of new rules and regulations from the UKGC have focused on player protections, from the banning of autoplay, feature buys and use of credit cards to the rules on how bonuses are advertised and the prohibition of gambling brands in sports sponsorship.
Casinos operating in the UK must monitor how and when they engage with players, what they advertise, the products and bonus rules, what language their affiliates use and much more to not fall foul of the Commission’s rules. Many big brands, like Flutter Entainment, can devote their resources to creating specific teams monitoring player behaviours, keeping players safe and guiding operator interactions. Still, the task can be far more complex for smaller brands as their resources are not as abundant.
Even then, striking the right balance is difficult, and many companies have ended up with huge fines from UKGC for failing gamblers and their social responsibility commitments. Recent examples that jump to mind include the VIP accounts scandal at Betway and last year’s record-breaking fine of £17 million given to Entain for social responsibility and anti-money laundering failures.
In this case, the Commission made it absolutely clear where the line fell, stating: “There were completely unacceptable anti-money laundering and safer gambling failures. Operators are reminded they must never place commercial considerations over compliance.” The safer gambling failures included being slow to interact with customers at risk of gambling harm and allowing players subject to restrictions to open multiple accounts across their brands.
While many operators agree with responsible gambling and do their utmost to ensure gambling remains fun for all (it’s in everyone’s interests as it keeps players enjoying real money games and ensures integrity across the industry), it’s inescapable that some casinos are smaller operations that struggle to keep up and for others, the number one objective is revenue.
Prioritising revenue growth doesn’t align with the industry’s current understanding of responsible gambling (the new UK white paper is set to introduce affordability checks and potentially per-player budgets), which requires operators to put safety before revenue. However, some companies, like Flutter Entertainment, are showing the industry how to do it by introducing mandatory £500 budget backstops for 18-24s (the most at-risk age group).
How does this affect affiliates
It’s not only casinos that must walk the line; responsible gambling rules work across the whole industry, especially affiliates. The UKGC states that licensees are responsible for how their affiliates present products, essentially an extension of the licensee, meaning affiliates have to toe the line and follow the marketing rules of the casino – it also puts them at the mercy of operator reactions. And as a general operating environment, restrictive rules make it harder for affiliates to make higher-value referrals or to reach players due to marketing conditions.
A recent example that caused a stir among affiliates involves a big-name gambling brand reminding affiliates that they must not use the terms “bonus, promo code or coupon code” targeted for SEO, in URLs, articles, backlinks and meta descriptions.
According to the brand, it went against the affiliate agreement, and those who did not follow may have their commission withheld and their contracts terminated. For many affiliates, it seemed like the first time this requirement had been mentioned, despite the operator issuing the message as a reminder. Many were quick to question how they could market the brand and theorise a not-too-distant future where unregulated affiliates would fill the top SERP results fulfilling users’ search intention, usually bonuses.
Are no wagering bonuses the answer
Gambling operators need to move towards practices that are responsible and drive revenue. No wagering bonuses are a great example of a strategy that combines social responsibility and player recruitment. No wagering gambling sites and bonuses became popular around 2020 and have played significant roles in the customer retention strategies of some of the UK’s biggest gambling brands, like PlayOJO, Betfred, Paddy Power and others. The idea is that all bonuses at these sites come without wagering requirements and do not require players to wager unrealistic amounts of money to claim bonuses.
While the value of each player’s sign-up may not be worth as much offering no wagering bonuses as with a wagering requirement offer, players are happier with no wagering bonuses and more likely to continue playing at a site. No wagering casinos and bonuses have been a massive hit with UK players, and it’s also caught the attention of UKGC.
In 2022, wagering requirements came under fire from UKGC as they were deemed to “encourage excessive play”, which goes against social responsibility commitments. The Commission instructed all licensees to “review their offers, particularly welcome bonus offers or those with wagering requirements. The LCCP requires rewards and bonuses to be constructed in a way that is socially responsible. Although it is common practice to attach terms and conditions to bonus offers, the Commission does not expect conditions, such as wagering requirements, to encourage excessive play.”
Where to draw the line
Operators have a vested interest in player safety and the UK gambling industry enhancing its corporate and social responsibility credentials, while at the same time it tries to balance licensing requirements with being profitable. The debate is also part of broader discussions around the rate of problem gambling in the UK and whether too much regulation will endanger players further by driving them to offshore casinos where fewer restrictions, including safe-guarding measures, exist.
As ever, finding the balance between providing responsible entertainment to millions of players who gamble safely, while protecting those who are at risk and enabling online operators to be profitable, is always the objective.
At Double Up Media we believe no wagering casinos are one way of doing this, because they show that it is possible to be socially responsible and profitable; and as we move forward we’ll continue to innovate and work with operators to develop unique and responsible offers.
Please play responsibly. For more information and advice visit https://www.begambleaware.org