Is the online gambling sector prepared for GDPR?

Words by Scott Longley

“Complying with regulation is nothing new for the gambling industry,” says data protection legal expert Patrick Rennie from Wiggin about how the upcoming General Data Protection Regulation (GDPR) will affect the online gambling sector.

“It actually might be an advantage for them,” he adds. “They know about these types of processes and there is an overlap when it comes to consumer rights. In that regard, the industry is well-placed. AML and the licensing conditions rules are in part about protecting the consumer.”

The GDPR has been hanging over the heads of more than just online gambling for some time now. Coming into force in May, the EU’s latest attempt to get to grips with data privacy and security comes at a particular moment in the evolution of online marketing processes.

In one sense, the regulation is just another step forward in the oversight of the use – and abuse – of data. “It grows from existing legislation on data and privacy and builds upon it,” says Rennie. “There is a need to ensure that data is processed properly. People will now need to know what happens with their data.”

More than that, though, it also occurs at something of a crossroads – or perhaps a threshold – for the use of data in consumer marketing. In looking at consent and tackling some of the sensitive issues around data privacy, the GDPR puts retargeting and other online marketing tactics front and centre of the debate.

“GDPR doesn’t restrict you from doing things,” says Rennie. “But what it says is that if you are going to use a customer’s data, then you need to inform them and ensure you have the grounds to do it. It’s not just about consent. It is important that you are transparent. The marketing is something that the regulators are looking at closely but I’m not sure how important it is to the consumer. At the moment the consumer reaction has been nascent.”

The consumer reaction

As much as online gambling might – or should – have a head start when it comes to dealing with data regulation and the consumer, it can also be said that the industry’s track record when it comes to many forms of online marketing practices is, at best, sketchy.

The recent run-ins in the UK with both the Gambling Commission and the Information Commissioner’s Office (ICO) with regard to bonus terms and conditions provide evidence of the difficulties some operators have encountered with regard to consumer communications.

Its latest attempts fall under the broad banner of personalisation. They constitute the industry’s efforts to catch up with best practice in other key consumer-facing sectors – in particular online retail – when it comes to giving the customer what they want based on their individual previous buying patterns.

It is an art the sector is yet to master, says Harry Lang, previously head of marketing with Pinnacle and now working as a marketing consultant with the newly formed Brand Architects. “The volume and quality of customer communication is a rarely mastered art and personalisation of a player’s entire gaming journey is still a long, long way off,” he says.

“We’re still seeing operators struggling to get attributions and first names correct via their CRM platforms (let alone correctly localised in multiple languages) so the idea of a perfectly personalised acquisition funnel, conversion path, game lobby, bet type and wallet remains a dream for most.”

The difficulties are compounded by problems both modern and more historical, suggests Andrew Dagnall, chief executive at betting data services provider Bettorlogic. He points out that the industry should, by rights, be in a decent position to personalise its offerings due to the habitual nature of the average punter. Rather handily as far as marketers are concerned, punters tend to know what they like and like what they know.

“From the data we have seen, an advantage the betting industry has over other industries is that the majority of bettors tend to be creatures of habit in the sports/events/markets that they bet on,” he says. “That makes personalisation much easier but there is a fine balance between pushing information and creating the environment, which is a reflection of a customer’s interests which they opt into as and when they want.”

More than that though, the longstanding bookmakers are also failing to update the experience from what was essentially a retail idea of betting to the online environment. “I think what is missed also by operators is that as betting is driven out of retail, so the experience becomes a solitary one and I’m not sure that is ultimately in the best interests of the industry,” he says.

Love my brand

The use of personal data and how that affects the perception of a brand among consumers isn’t new. Though GDPR very much brings it into focus, it was the previous misuse of personal data that has worried consumers, says Amit Bivas, head of marketing for digital marketing specialist Optimove.

“This issue was caused by marketers and brands that made the ‘wrong’ use of data,” he says. “At the end of the day, GDPR is the consumer’s right to be forgotten, and I think consumers will not use this right where brands are using the data intelligently and in order to provide elevated value to their consumers. Consumers will opt-out from brands that exploit their data.”

From this point of view, it is up to brands to know who their customers are and “treat and communicate with them” in the context of how they have interacted with the brand previously.

“Brands must understand customers’ needs, affinities and traits and communicate with them accordingly,” Bivas adds. “Lack of precision in these efforts results in crude communications leading to bad customer experience. Tailored communications that deliver value to the customer is the only way to foster meaningful relationships between brands and their customers.”

“Punters see Paddy Power as a witty and amusing drinking buddy while its brother Betfair is more akin to a trusted advisor” – Harry Lang, Brand Architects

The danger is that this stream of communications – however tailored – can become too insistent and end up turning customers off rather than getting them more involved. “There’s nothing more unsettling and off-putting than a hard sell, especially when gambling as an industry is still in an evolutionary process of becoming well regarded,” says Lang.

“If you’re trying to persuade someone to trust you in such a price-competitive space, then it’s best not to speak with them like an American infomercial or a used car salesman – they have plenty of opportunity to choose one of your more amenable competitors instead.”

Brand is more than an advert, says Greg Karaolis, head of online innovation at SBTech. “It permeates through everything a company does.”

Like any company trying to engage their customers and get them to increase volumes, “there is always a risk of putting out too many offers or being too insistent,” he adds. “Too much communication or feedback can damage the user experience, but it all depends on how much and what type of notifications operators push out to punters.

“Overall it comes down to context, timing and segmentation; in other words getting the balance right between providing relevant and timely content and not overloading players with useless or annoying offers.”

Can’t get no satisfaction

Many cite the twin brands at Paddy Power Betfair as typifying how different approaches to branding in sports betting, in particular, can lead to differing brand personalities within the marketplace.

Yet, as Karaolis adds, it is also worth asking if a player gets that truly satisfactory feeling when they bet with their regular bookie or whether it is purely a transactional process. “Would a player have signed up to a particular brand had they not found a certain advert funny or provocative?” he asks. “Or is it just a matter of pricing and welcome bonus? Overall though I would say punters do want and recognise brands, even if they are not always aware of it.”

At Qubit, another digital marketing and personalisation provider, the focus is very much on attempting to ensure there is a brand relationship beyond the initial customer contact. “I do think there is brand loyalty,” says Jonathan Patterson, gaming industry lead at Qubit. “With the core recreational player, the key is to get them installing and depositing. Then it can become the go-to place, and from there it will all be about the experience.”

The key at this point is that brands have to collect as much data as they can about a consumer in order to accelerate their understanding. “It takes time to build up the information in that area,” says Patterson. “We are proactive; we garner all the information we can. It will not be inferred or implicit. That can accelerate the speed with which you personalise.”

And yet as one marketing and customer experience expert who we spoke to for this article, but who wanted to remain anonymous, put it, every extra field of input added to the registration process will mostly have the net effect of increasing the drop-off rate in the registration process.

“Will they use the extra data? Maybe,” they said. “You can add questions about gender – but what will they do with that? Nothing. Only the really good companies are using data effectively.”

While listening to your customers is a good thing, it is arguable that this is what the operators are doing and constantly asking for further information and data is, in the words of our CX expert, “freaking them out” because they are often not upfront about what they are doing with their data.

“An example is programmatic advertising – you look at a product and you see the banner ad for the same thing on another site the next day. That kind of undeclared use of data makes consumers nervous.”

This is back to Lang’s questions about the hard sell. The average punter doesn’t “analyse” a brand message, he suggests. Instead, branding is more emotive and happened “by definition”.

“The brand would have invested in a consistent brand positioning, personality and tone of voice over a period of maybe a few years and not strayed from its brand promise. This consistency is what delivers a true brand sentiment.”

This happens in any given sector or industry, he adds. “In any space there is irrefutable proof that a strong trusted and even loved brand enhances the ability of every marketing channel to perform,” he says. “In gaming it’s no different – punters see Paddy Power as a witty and amusing drinking buddy while its more staid brother Betfair is more akin to a trusted advisor.”

These are, of course, brands that have the maturity (and the budget) to ensure they don’t over-promise and (to twist the usual analogy) in terms of messaging and insistence, over-deliver. They can focus on product and delivery and leave the more desperate attempts at personalisation to those further down the scale.

In the world of stricter data regulation, there is more than a hint that operators will have to learn to do more with less. Technology will help – Patterson from Qubit mentions how many marketers are looking to AI and machine learning as a route to better understanding customers – but it comes at the cost of having to eek out even more data from them. And that might be harder to come by in the future.

Simplicity might, in the end, be the key message. “Gambling has a further challenge and it makes the brand promise even less credible and unachievable,” says our expert. “I’d love to see a brand that was honest, that allowed punters to get a bet on, to take the risk, to settle quickly, to not have convoluted bonus terms and to just do the basics and not pretend to be our mate.”

Ultimately, more data doesn’t help with that, they conclude. “The gambling/transactional is a death match, not some love fest.” He cites the words of Bob Hoffman (the ad contrarian and advertising expert): “If I wanted a conversation or to love your brand, I should probably get out more and get a girlfriend.”