If we skim through regulatory developments in gaming, what strikes us most is that advertising is one of the hottest topics across many jurisdictions. Great Britain, France, Holland, Spain, Portugal, Germany, Denmark, Lithuania, they all discuss, fine-tune, adapt, change and tighten rules for advertising of gaming products. Even bans are on the table. Italy was one of the first countries to adopt a ban already years ago. But why do politics focus on advertising the most? Why is it omnipresent? And does advertising really increase the number of vulnerable gamblers?
OVERALL GAMBLING PERCENTAGE IS LOW
First of all, one has to understand that the broader public does not gamble regularly and is not interested in gambling ads. Globally speaking, 1.2 percent of the overall world population is gambling. Hence, seeing gambling ads a lot, whether it is on TV, on billboards, in newspapers or online, becomes overkill for many people who then express their discontent. And if advertising is being forbidden on TV during the day, it will accumulate in the night hours, which won’t make it any better for the perception of the individual about how much advertising is out there.
In this sense, research is not fully conclusive. Globally, countries and researchers have realized surveys and literature studies about the impact of advertising on the gambling behavior. The bibliography of empirical studies on gambling advertising in its fourth edition by Per Binde from the University of Gothenburg, Sweden, already fills 142 pages. A lot of studies come to the conclusion that further studies are needed. So is there any concrete evidence that advertising increases problematic gambling?
The UK House of Lords Report 2020 quotes that the UK industry spent 1.5 billion pound per year (up by 56%) between 2014 and 2017. 80% of all gambling advertising was released on the Internet. But no evidence could be found for a causal link between more advertising and higher problem gambling rates. Furthermore, the Swedish regulator said they were unable to evaluate the impact of COVID-19 restrictions, among which advertising tools had been found such as bonuses. They concluded that problem gambling rates remained pretty much stable during the pandemic.
However, some research has found that it is indeed the vulnerable people who react stronger to advertising. Vulnerable people are young people and people who’ve already shown harmful behavior. Consequently, there is a higher risk for them to gamble more, which triggers all the negative side effects like losing money they do not have or developing a gambling behavior that severely harms them. Exactly for this reason, the UK is looking into banning ads for this group of people.
CUSTOMERS NEED TO KNOW WHERE TO GAMBLE SAFELY
Looking at these issues, it becomes clearer why the problem of advertising is on the table. But there is still another key element to consider. Advertising is relevant in order to channel customer interest towards the regulated offer which guarantees better control and more customer protection. Certain contracts, for instance between governments and state lotteries, even define the percentage of the budget operators should spend on commercial communication.
For players, it is essential to know which providers comply with strict provisions and which don’t. It is decisive for them to know where to address to if a conflict pops up. For good reason, the UK Gambling Commission has recently even informed operators about how to best guide customers in case of a complaint, i.e. when they might be in need of an arbitration board in their country of residence. To conclude, customers have to know where to find the licensed and regulated offer. They get this info via commercial communication, i.e. advertising.
But there remains the issue of vulnerable gamblers. Even though gambling advertising might not really motivate non-gamblers to start a ‘gambling career’ (1) or casual gamblers to gamble more, it might play a role with exactly those gamblers who are already being driven towards regular or abundant gambling. In addition, today, more forms of gambling ads are available via social media, which might have a long-term impact, particularly on children.
Thus, it could make sense to diversify rules. General advertising via big channels like TV or billboards seems to have less impact on gambling behavior whereas concrete, targeted advertising via mails, SMS, social media, often combined with incentives like bonuses, seems to show this impact with regular gamblers.
ARE THERE ANY SPECIFIC RULES FOR SPECIFIC CIRCUMSTANCES?
So, how should advertising look like in order to meet the needs of customers and, at the same time, avoid negative side effects? France, for instance, has introduced the obligation to have approved any ad campaign before its launch. It will be interesting to learn more about how this step will influence the outreach and impact of gambling ads in France. In Holland, operators have agreed to allow bonuses only from the age of 25 years on. This will expose young people less frequently to ads. The UK considers a ban of advertising for vulnerable groups.
The idea of allowing just one gambling ad per advertising slot, discussed by the Danish trade association some years ago, would be interesting as well, even though it would have collided with the competition law in this case and has been hence discarded.
What is more, one could pursue a double strategy: allowing brand advertising under certain conditions, such as not targeting minors, not promising unrealistic wins, etc. On the other hand, it could make sense to impose more provisions on commercial communication targeted at individuals. Today, this is easily possible with AI and more personalized offerings.
One additional way could be advertising brands of the licensed offer via centrally organized campaigns and combining it with educational programs about the risks of gambling. More education is needed in any case, and it is already being provided, at least in some countries.
(1) Corresponding to a 2021 survey made in Germany, slightly over 90 percent of respondents without a gambling disorder said advertising had no effect on them, compared with 41.2 percent of respondents with a gambling disorder. They answered advertising motivated them to try out new gambling products. The percentage of gambling disorder was found as follows: 0.5% has a grave disorder, 0.7 a medium disorder, and 1.1 a slight disorder. Men are more concerned than women.