Regulators are beginning to demand that iGaming affiliates demonstrate just as much commitment to social responsibility as operators. Here, we’ll look at social responsibility from the affiliate perspective. We’ll start with the problem presented by the topic, and end with some emerging solutions.
The gambling industry is fueled by the marketing and advertising efforts that bring in new customers and keep the casinos alive and thriving. There are a variety of different techniques and strategies that affiliates use to promote their partners. However, while loyalty programs, VIP programs, and bonuses can all help promote a casino, they can also carry the risk of an increased potential for gambling addiction.
The UKGC has recently introduced licensing conditions that affect affiliates as well as operators. Third parties that enter into contracts with licensees - such as affiliates - are required to adhere to the same standards as the licensees themselves. According to UKGC guidelines, advertising cannot target underage gamblers, gambling cannot be a source of crime or disorder, and operators must do everything in their power to assist gamblers who have self-excluded.
While these sound clear at first, many operators and affiliates find the guidelines to be vague regarding what’s allowed and what isn’t, possibly with the aim of allowing the UKGC to have room to maneuver. Regulators in other countries often follow the UK’s lead, so it’s worth examining.
Sky Bet: A Cautionary Tale
Sky Bet provides a good example of why it’s in operators’ and affiliates’ best interests to toe the line when it comes to government regulations. Sky Bet was issued a £1 million fine for failing to adhere to UKGC standards for the protection of vulnerable gamblers. The fine was lower than it could have been due to the company’s decision to self-report.
More than 700 of Sky Bet’s self-excluded gamblers had been able to reopen their accounts, some of them even doing so using the same identification details as their initial account. About 50,000 self-excluded gamblers continued to receive marketing details through various channels after self-exclusion, and more than 36,000 of them did not have their funds returned to them after they closed their accounts.
Sky Bet is just one of a slew of recent examples of the UKGC cracking down on members of the gaming industry for failing to exhibit sufficient corporate social responsibility. Failing to combat problem gambling and money laundering are two of the chief offenses, along with improper advertising.
Most of those fined are operators, but it is sometimes the case that the operators are fined for advertisements that appear on affiliate sites. As such, some well-known brands have notified their affiliates that partnerships will be canceled if they do not adhere to internal or UKGC guidelines.
Affiliates are motivated by player acquisition. The affiliate business model might change if affiliates were compensated according to player lifetime or player reactivation (and some payment schemes include those models) but by and large, the most common marketing strategies are those that appeal to the largest numbers of potential players - or those that are best tailored to specific player segments. For this reason, regulators like the UKGC are concerned about the conflicts of interest that can arise from expecting affiliates to pay attention to social responsibility.
Due to the nature of the affiliate business model, social responsibility can work at cross purposes to the goal of increasing profits. In order to be competitive, affiliates have to find ways to stand out from the crowd, and their efforts to do so necessarily reward creativity much more than self-restraint. However, this increases the chances of running into problems with regulators if a line is crossed.
Social responsibility presents a tightrope walk for the gambling industry, as operators and affiliates are presented with the challenge of protecting problem gamblers without infringing on the experience and enjoyment of responsible gamblers.
Corporate Responsibility Solutions for Affiliates
One common opinion is that the way forward is self-regulation. Affiliates can take the reins themselves before it comes to the point of increased government intervention. One example is Responsible Affiliates in Gambling (RAIG), a trade association dedicated to responsible gambling.
RAIG was formed by Racing Post, OddsChecker, and Better Collective. The association aims to elevate gaming industry standards for corporate social responsibility. RAIG members feel that affiliates have an important role to play in the promotion of responsible gambling. Members agree to undergo a yearly social responsibility audit.
Another way forward is the usage of advanced software like apps and software designed specifically to help self-excluded gamblers. AI, biometrics, and geolocation are all providing opportunities for improved identity verification processes that can greatly reduce the ability of self-excluded gamblers to establish a new account.
In some views, the gambling industry actually provides a model corporate responsibility for other industries to follow, due to the fact that it consistently faces more intense scrutiny than other sectors. In addition to technological advances that could help operators and affiliates detect problem gambling behavior, one big step affiliates can take is to self-regulate - that is, in the vein of RAIG, make an effort to proactively pursue social responsibility solutions. Doing so could not only curb the problem but demonstrate to regulators that affiliates take CSR seriously, possibly preventing the imposition of overly strict regulations.