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The newly-released UK gambling white paper recommends forcing operators to obtain consent to cross-sell players from sports betting to the profit centre of online casino.
If enacted, the provision would curb the popular industry practice of trying to entice sports betting or bingo customers to other products with offers of bonuses or free spins.
The potential restrictions are based on studies which suggest using a variety of gambling products can be a potential marker of harm.
“We believe there should be an increased level of customer choice around whether they receive promotional offers and if so, what kind of offers they consent to receiving and for which products,” the Department for Digital, Culture, Media & Sport (DCMS) wrote.
“Specifically, there should be no ‘cross-selling’ without customer consent.”
Industry executives, suppliers and lawyers are scrutinising the long-awaited white paper, which will guide an overhaul of the 2005 Gambling Act in the UK, still the world’s largest regulated online gambling market.
It contains recommendations on slots stakes, affordability limits and statutory levy that will be put out to consultations over the coming months.
One provision that has so far received less attention is potential curbs on cross-selling that would come by forcing consumers to opt in to marketing pitches in different gambling categories than they initially signed up for.
Cross-selling players from sports betting or bingo to online slots or roulette is a prime goal of many operators as a reliable way to boost revenue.
A NatCen study found that average gamblers who both bet and played online games spent £602 per year, or more than twice as gaming-only accounts, at £296, while betting-only accounts spent £135.
Concerns focus on studies which suggest that participation in multiple forms of gambling is a risk factor for gambling addiction, with concerns for young people more pronounced, according to the report.
Melanie Ellis of Northridge Law agrees that cross-selling slots to sports bettors is an important source of revenue for operators, noting that the Gambling Commission’s surveys found that 28 percent of customers started to gamble on a new product after receiving bonus offers.
Details of such a proposal will not come until the consultation is introduced this summer, but “from its advice to the government, we know that the commission believes customers should have to opt-in to direct marketing by product type as well as by channel”, she said.
The commission has acknowledged a gap in research, however, and could be open to operators presenting data on correlation, or lack of correlation, between cross-selling and markers of gambling harm, Ellis said.
“Concerns about the difficulty in implementing the proposals are less likely to find favour with the commission, although based on previous consultation responses, we know the commission may be willing to allow a longer implementation period if there are genuine challenges,” she said.
In the UK, customers can already opt out of receiving all gambling marketing, but that is somewhat of a blunt instrument, according to the white paper.
Racing bettors, for example, might want to see odds from upcoming races, but might not welcome a pitch for online slots, while a sports bettor may want to see odds for major sports events, but not get offers for bingo games, the DCMS said.
In the US, companies have been promoting the capacity to cross-sell online casino to sports-betting customers as key to turning a profit, and they have tried to convince states to adopt online casino to boost their prospects.
Last year, Flutter’s FanDuel told investors it was able to convince 41 percent of sports-betting customers to play online casino games within the first 30 days in states that allowed both betting and gaming.
In March, Rush Street Interactive said the average online betting and casino player generates 2.4 times the revenue of an online casino-only player.
In Portugal, almost 40 percent of online gamblers did both betting and gaming in the fourth quarter of 2022, and in Spain 31 percent of active online sports bettors also played online roulette in 2021 and almost 21 percent also played slots.
Asked for comment, UK gambling lobby the Betting and Gaming Council, said it had nothing new to add to its initial comments on the white paper as it was still digesting the document.
Opting in to marketing offers should be a “clear and separate” option at registration, not bundled in with terms and conditions or privacy policies, the white paper said.
Players should also be able to change their opt-in preferences at any time, and they should be able to opt out of, say, text notifications while still receiving emails, the report said.
The proposals are meant to protect vulnerable people and provide clarity around marketing, the paper said.
“We do not want to restrict operators’ ability to use offers to attract new customers or retain existing ones, and acknowledge that ‘blunt’ measures in this area could unintentionally benefit the black market,” the DCMS wrote.
“We believe that these proposals will meaningfully reduce harms without disproportionate impacts on the sector’s ability to compete.”
