GPWA Times Magazine - Issue 46 - February 2020

DON’T BANK ON COMMISSION Christina Thakor-Rankin has over 25 years’ experience in the global betting and gambling sector. She is currently Principal Consultant at 1710 Gaming Ltd working with start-ups, investors, operators, regulators, law enforcement and industry groups across the world, advising on all aspects of the betting, gaming and gambling cycle. being upskilled with specialized training on vulnerability, which will include “gambling addiction.” With two of the U.K.’s biggest banks already taking such a hands- on approach to tackling the issue of problem gambling head-on, it is only a matter of time before the other banks, and thereafter other payment providers such as PayPal, Apple Pay and other electronic and digital wallets follow suit, either voluntarily or ultimately because they are forced to do so. For anyone who believes in keeping gambling safe and fun — and, to be fair, that does include a large number of affili- ates out there — financial institutions and payment providers taking such a proactive step can only be good news. There is no getting away from the fact, however, that this is going to have a significant impact on player spending and therefore on both operators and affiliates, forcing them to re-think the way in which they operate. First off, banks and financial institutions offering self-manage- ment tools means that both affiliates and operators need to re-evaluate their approach to the established commission model. Where commercial and commission percentages have historically been based upon and adjusted in accordance with an operator’s own experiences of acquisition and retention, the introduction of national self-exclusion schemes and financial restrictions driven by players, but also potentially by payment providers, skews the traditional approach to acquisition and retention. Not only does it significantly reduce the pool of potential new customers, it also accelerates the rate at which they stop playing. This has an impact on both the traditional CPA and the traditional commission-based models of acquisition and retention. It means affiliates and operators need to rethink the way they approach all aspects of the acquisition and retention journey. Secondly, the move by the banks is an indication of how gam- bling is perceived in today’s social and political climate, and how affiliates need to adapt to stay relevant. After a decade of liberalization, gambling is once again “the boogeyman” with the unsuspecting public needing to be protect- ed against unscrupulous operators trying to wring the last drop of profit out of vulnerable customers. While the banks seem to be motivated by the best of intentions, it could be argued that it is inevitable that some will also spot the commercial and reputational value of taking a socially responsible position to keeping customers safe as well as the benefits of minimizing the cost of first and second-party fraud, making it likely that it is only a matter of time before all major banks do this. If the approach of banks like HSBC and NatWest take a more proactive position that mirrors operator practices of actively identifying, interacting or even intervening and looking at afford- ability in a bid to protect customers from themselves is adopted by others, then the default position of all parts of the betting and gambling supply chain (verification service providers having already embraced affordability checks as part of their offering) becomes one of safety first. Therefore, affiliates, the first link in the chain, will need to find a way of promoting an operator’s approach to responsibility alongside, if not ahead, of bonuses, exclusive content and general player experience as the main acquisition hook. Finally, while this new “player protection” phenomenon is predominantly only in the U.K. currently, affiliates should bear in mind that these banks are international. As other regulators continue to raise the bar on social responsibility, it is entirely possible, if not probable, that they will look to extend the U.K. approach of player protection to other countries, and in doing so, apply pressure to other payment providers, such as e-wallets, to follow suit. All of which means that when it comes to on-going revenue, affiliates can no longer bank on commission. After a decadeof liberalization , gambling is once again “the boogeyman” with the unsuspecting public needing to be protected against unscrupulous operators trying towring the last dropof profit out of vulnerable customers . G P W A t i m e s . o r g 36