Industry predictions: AI acceleration and the cessation of “tier-two” licensing hubs

Maksym Liashko, partner, Parimatch

Maksym Liashko, Parimatch

Acceleration of AI

As the industry continues to digitally transform, in 2021 we are going to see an even greater increase in the adoption of artificial intelligence (AI) in order to both automate and personalise customer experience. AI enables operators to better understand players, from their preferences to their behaviours. In turn this means that promotions, offers and even products can be tailored to each customer, ensuring that the right content is delivered in the right way at the right time to boost engagement. The use of AI to automate basic customer services will also become more widespread. With AI-powered tools, transactions can be automated to significantly boost the speed of customer payments, and with chatbots, customers can gain access to more instant, 24/7 help and support.

Targeted, tailored marketing

Customer experience is not the only area that will become increasingly tailored in 2021. There will be more effective usage of data gathered through traffic distribution systems (TDS) and data site platforms (DST), enabling operators to more effectively market their products to prospective players. For example, data can be harnessed from the TDS to show which users have new iPhones. Working on the assumption that new iPhone users have more disposable income, affiliate links can be optimised by providing such users with special promotions and bonuses. By using data to create a more informed picture of affiliate traffic, there is potential to significantly increase conversions by finetuning introductory offers and promotions.

Regulatory revision

As an international business, we always expect regulatory changes in the jurisdictions we hold operator licences in, and 2021 is no different. For example, we expect tax regulations to change in some of our markets, and we need to be prepared for that. In the CIS region it is predicted that there will be tighter regulation around the use of crypto-assets for casino game betting. This is because of increasing regulator concerns in these territories around the anonymity afforded by some crypto-assets and subsequent fraudulent activity which could be facilitated, as deals using this currency cannot be traced.

Lee-Ann Tang, compliance manager, Amber Gaming

Lee-Ann Tang, Amber Gaming

Upcoming review of 2005 Gambling Act

The upcoming review of the 2005 Gambling Act is scheduled to take place in 2021 and it is envisaged that a number of prescriptive measures, which have been emphasised throughout the global pandemic, will be introduced relating to safer gambling and player protection. Possible measures include aspects such as a proposed threshold at which operators must conduct affordability checks, greater controls on loss and spend limits and tightening of self-exclusion rules. There is also the potential for sponsorship arrangements and promotional offers such as free spins, bonuses and VIP schemes to be called into question to prevent gambling-related harm and protect the vulnerable.

The biggest changes that likely could, and should, occur may relate to the terminology of ‘gambling’ itself. For example, the UK Gambling Commission has already called for evidence regarding loot boxes as these are commonly used by children and young people. Going forward, loot boxes may be considered as licensable activity in an attempt to protect the young from being exposed to activity that could later lead to problem gambling.

The cessation of “tier-two” licensing jurisdictions

As a consequence of increased international political and societal pressures within the gambling industry, most jurisdictions have implemented or strengthened regulations and associated regulatory scrutiny for their licensees. As a result, the gambling industry (including operators, third-party providers and customers themselves) is increasingly wary of those businesses who do not abide by such minimum standards.

Consequently, some licensing jurisdictions, which have previously been seen in a less favourable light due to lack of regulatory oversight and requirements to implement international standards of AML/CFT controls and frameworks, are now succumbing to the pressures. A prime example of this is Curacao, which historically has been favoured by both start-up and well-established operators that are seeking a reasonable licence cost, speed to market and flexible approach to operating. In an effort to better meet increasing standards, Curacao has announced that in March 2021, it will introduce its own gambling regulator and associated legislation.

Introduction of further regulated markets

As evidenced by the recent regulatory overhaul in Germany and the forthcoming introduction of regulations for Curacao in 2021, operators should expect other jurisdictions to follow suit to begin regulating gambling activity. The European regulatory landscape for remote gambling is already complex, with each market having their own regulatory compliance requirements. We can expect this to become more common throughout the rest of the world’s markets, as has already being seen and evidenced within US markets. Horizon scanning will therefore be of paramount importance for licensed businesses to keep up to date with potential changes in key markets to enable them to be proactive and embrace and adapt to changes to ensure ongoing success.