Can the gambling industry finally get off the back foot?
At a time of real challenge for egaming, can the sector find a route through its current issues that works for everyone?
Last week saw Denise Coates in the headlines once more over her salary, although this time it was a Sunday Times story revealing the Coates family paid the second-most tax in the UK last year at £156m. Denise’s £265m salary alone incurred £99m of tax, according to the report. But it’s fair to say it garnered considerably less coverage than the news of her salary. Two stories, two very different treatments by the media. And so it is for the sector as a whole.
It’s easy for the wider media to sidestep the fact that the gambling industry generates a huge amount of tax for its respective governments. In Italy, the new home of the anti-gambling crackdown, the sector generated nearly €10bn from gambling taxes in 2018. The UK is a level below this with the latest forecast from the Treasury predicting betting and gaming duties to raise £3.1bn in 2018-19. According to the government that is equivalent to around £115 per household and nearly £1bn of this comes from General Betting Duty and Remote Gaming Duty.
The argument can, and will, be made by its detractors that the tax benefit of the industry is outweighed by its negative consequences, but it’s interesting that even with such a large fiscal contribution to the economy the industry remains unable to voice its worth to the wider media at the current time. This is a sector that feels constantly on the back foot. This is largely because it is yet to get its house in order around responsible gambling, but also because of a seeming reluctance to work together and address the more existential issues facing it in 2019.
Defining the parameters
The industry as a whole faces the task of reinventing itself for a new, more responsible gambling focused world and GVC was the latest to try and take a lead here. Last week it announced it was investing $5m into problem gambling research last week as part of its new responsible gambling campaign called ‘Changing for the Bettor’, which is also, bizarrely, the marketing slogan for its Betdaq brand. “We are committed to leading the industry in minimising potential harm caused by problem gambling,” the firm said in a statement.
GVC also said it would be donating 0.2% of its GGR to problem gambling research, education and treatment of problem gambling. With around £3.5bn in group NGR in 2018, that’s not an inconsiderable sum. The firm sets out seven key pillars that focus on both internal and external education and cultural change, but perhaps the most interesting comment comes with regards to the recently agreed pre-watershed “ban” on gambling advertising where GVC said it was “leading the industry” and this feels like a real point of contention at the moment.
Prior to the GVC announcement, we’ve had significant moves from both William Hill and Sky Betting & Gaming in trying to own the issue of problem gambling within their respective businesses and presenting potential industry-wide solutions. William Hill’s Nobody Harmed initiative was launched with much fanfare and its own set of four guiding principles and nine commitments, while Sky’s recent appointment of a head of safer gambling on the back of its responsible gambling ad campaign.
What we have here is a lot of leaders and not many followers. Everyone wants to be seen as the business that is dictating the direction of change and will doubtless want to do so in a way that has the least damaging impact on its own strategy and operating model. That’s not cynicism, that’s just pragmatism, but it does create a tough route forward for an industry besieged on all sides.
Where next for the sector?
It could be argued that there is no need for this broader consensus, that the industry has dealt with the worst and it’s now up to each company to rebuild in the best way for its own shareholders. But the wider view in this industry from both big and small operators is we’re still very much in the midst of the transformation with big changes to come, and it would be helpful to have a shared vision of how we get there. As said before, this is an industry in the midst of a reinvention, it’s just not clear yet in whose image.
And if operators can’t decide for themselves then that might get decided for them. Gambling Commission CEO Neil McArthur recently upped the pressure on the sector by saying a stable problem gambling rate wasn’t good enough and they needed to accelerate progress around keeping gamblers safe. And it’s worth taking a moment to consider the scale of change being referenced here. This isn’t just a banner ad and a donation. McArthur put up examples of an attempt to cross-sell him into slots and a prompt to redeposit as signs of consumer safety being sacrificed for profit.
Alongside this we have the FOBT all party parliamentary group rebranding with a mission to tackle the online gambling sector and a continued media backlash against the deemed excesses of the industry. But who really speaks for the industry in reply to this? The RGA does a good job and its work on TV advertising should be commended, but the disjointed approach on other issues is concerning. This is a time of real existential threat for the online gambling industry and some clarity of vision and unity of message is urgently required.