A time to act

I’ve been in the industry for 47 years and this is the most pessimistic I have ever been over the health of the UK betting market.

There are multiple factors playing a part in this. The current player protection requirements we have now are contributing to vastly diminished betting activity, combined the uncertainty over the contents of the much-delayed white paper into the Gambling Act 2005 review is creating an unprecedented challenge for UK operators.

Turning back the clock to see how we’ve got to this point, we’ll start with the Gambling Act 2005 which created the Gambling Commission (UKGC). This came into force soon after with a principal focus on regulating gambling both online and offline.

The act, in its founding principles, stated three main objectives to regulate and enforce: preventing gambling from being a source of crime or disorder, ensuring that gambling is conducted in a fair and open way and, thirdly, protecting children and other vulnerable persons being harmed or exploited.

For the first few years, the working relationship between the UKGC and bookmakers was highly collaborative, especially surrounding suspicious betting activity, with excellent work carried out to bring ‘cheats’ to justice under the rules of the act.

However, that initial spirit of collaboration has changed considerably over the years.

The key example for this being the UKGC apparently pre-empting the contents of the white paper, with operators fined astronomical sums for not having adequate player protection measures in place.

As a result, we’re seeing operators pressured into demanding excessively sensitive information from their customers and, for many regular punters, this is now preventing them from gambling in the sustainable way they have done for years.

Of course, the rationale behind regulation is obvious – we do need to protect the vulnerable – however, instead, we’re seeing customers being shut out by far too intrusive checks, with requirements that far exceed an average mortgage application.

Let’s think about it. Who is going to send in bank details, P60s and anything else imaginable to prove that they can do what they’ve been doing for years already, all without any explanation of how and where this private and highly sensitive data will be stored? All it requires is one errant employee and the potential for misuse of a customer’s data is obvious.

In short, this has turned into a mess. Every bookmaker interprets the UKGC’s requests differently. As of now, there is no industry standard of what is required from customers to satisfy the UKGC’s initiatives.

Any new piece of legislation should be sensibly tested in a court of law, with a judge opining on it. It’s astounding that the act has not been challenged in law, not least over the interpretation and definition of the word ‘vulnerable’.

With all that said, it isn’t fair to lay all the blame at the UKGC’s door. There are two other industry groups we need to look at to see how we’ve reached this point.

The punter

The first is the customer, and in particular, the ‘bonus abusers’ segment of this group. We’ve seen customers disguise their identity by using multiple accounts to access free money bonuses that bookmakers provide as part of their marketing strategy.

When affordability checks first came in, unsurprisingly this cohort were the first to navigate their way around them. Documents requested, such as .pdf bank statements, are easily photoshopped to demonstrate affordability to any losses.

This immediately makes a mockery of the whole process, as well as chewing up significant bookmaker resources that could have otherwise been allocated to player protection.

The bookies

Bookmakers are not without blame either. For several years, operators have had sophisticated behavioural models deployed to find and restrict winning punters. These are powerful technical solutions which help to inform all kinds of segmentation, including marketing offers.

It’s no more challenging to switch the focus of these models to identify customers displaying the early signs of problem gambling. However, this technology has not been adapted enough to do that, at least not to a level that has satisfied the regulator.

The solution proposed by the UKGC is a single customer view (SCV), but to be frank, we believe this is a non-starter. It’s an admirable objective, but simply unrealistic from a technology perspective. Data migration is too much of a challenge given the amount of M&A we have in the industry, as well as multiple platforms within bookmakers.

Accountability for bookmakers starts at the top with the CEO. It can be argued that the industry has been far too slow in delivering intelligent systems that are capable of identifying vulnerable gamblers. It has perhaps concentrated on short-term financial results instead.

Use the opportunity

So, what’s the solution? The industry and the UKGC need to get back to the collaboration that worked so well at the start and deliver the objectives of the 2005 act.

Despite the foreboding of the arrival of the white paper, we see this as the potential for strong leaders to stand up and grab this issue by the scruff of the neck.

Once the white paper is out into the open, there is an opportunity to develop an industry standard for player protection measures so that the customer knows exactly what’s needed from them and why.

If the UKGC will not lead this process, then the bookmakers should work collaboratively together as they have done on many issues over previous decades via a variety of industry forums.

Next, all parties need to challenge, in law, any ambiguity of meaning in the act and define exactly what is meant by ‘vulnerable’ and how this group of customers can and should be protected.

By tarring everyone with the same brush, millions of betting customers are potentially prevented from enjoying a leisure activity by bombarding them with intrusive challenges.

If this can be delivered, and it will require strong leadership, then the industry might just arrive at a point where the vulnerable are protected and identified at an early stage.

These intrusive levels of affordability checks are arguably having the opposite effect to their intended purpose. And worse, it’s encouraging punters towards the black market where there’s zero player protection.

David Brown is one of the UK’s most experienced trading directors. With 47 years’ experience in the industry, he is the only executive trading director to have run operations at William Hill, Coral and Ladbrokes-Coral. Brown is co-founder of City Bet Club, which was established in 2022 with a mission to empower punters to improve their betting selections with expert betting advice. Staffed with an expert team of industry insiders who research daily betting opportunities in great depth, the company offers a potent combination of high-quality people, technology and contacts to put the odds in the punter’s favour.