With the introduction of caps on fixed odds betting terminals in the UK and sports betting finally made legal in the United States, the future of gambling appears somewhat erratic. Here, we explain why bookmakers should focus on getting to know their customer if they're to protect themselves during a time of potential uncertainty.
Recent times have been pretty significant in the gambling industry. UK operators were dealt a blow when the government revealed that the maximum stake on Fixed Odds Betting Terminals (FOBT) is likely to be reduced dramatically, from £100 to £2, when parliament gather to vote on the matter in 2019.
Gambling in the United Kingdom is more popular than ever before, down in no small part to the sector's warm embrace of mobile and web. Spend amongst customers is increasing, with The Guardian's 2017 item revealing an annual spend of £13.8bn - almost £2bn of which came from FOBT’s.
On an international scale, the future is exciting for operators, too, as opportunity begins to open up in the gargantuan market that is the United States, where states have recently been granted permission to make sports betting legal.
Roulette is amongst the most popular virtual games in FOBTs.
Though money-makers, the systems are not without their critics. Indeed, in 2013, the City of Liverpool’s council voted to ban FOBTs from betting premises, while the decision to reduce the maximum stake arrives only after a 15-year campaign.
And more recently Sports Minister, Tracey Crouch, resigned in response to news that the introduction of FOBT limits would be delayed. Much like the unpredictable nature of gambling itself, that was a decision that later overturned in November 2018, rendering the drama needless.
Time to change?
In spite of a cap being well-supported by gambling charities, there are still calls for the industry to further clean up its act, with the introduction of the 'minimum bet rule' that is proving a hit in Australia a popular request. The rule would force bookmakers to match all bets placed (to a publicly-advertised maximum liability).
Currently, bookies are free to refuse bets from punters. Contrary to ensuring they match all bets, PaddyPower has just revealed a new AI-powered system that recognises handwriting to identify customers, track their win/loss and decide if they've already taken too much money off them. If you have, bookmakers are free to refuse to leave themselves liable and reject your bet. The above rule would change that, creating a more transparent environment where all bets were accepted.
The Association of British Bookmakers are unhappy with FOBT Limits. Image credit: William Hill.
The request is another that is unlikely to be welcomed by gambling companies however.
The Association of British Bookmakers had already warned of job losses and shop closures if FOBT stake changes are introduced, and quickly fired back at the recent decision, warning that limits wouldn't solve the problem of gambling addiction, instead simply shifting the preferred method of betting.
If you're seeking more examples of where the sector has taken a bit of a kicking from the media, you won't need to look far. A 2013 report revealed that bookmakers are more likely to be located in areas of 'high deprivation' - leading to accusations that companies are targeting those most vulnerable.
And though mobile and web gambling has made it easier than ever to place wagers, that is particularly dangerous for those who do have an addiction. The industry's self-exclusion scheme has come under fire, with those who'd opted to do so reporting they could open new online accounts with relative ease.
Emerging technologies in gambling: who wins?
Greg Knight, Managing Director of UK chain Jenningsbet, describes the FOBT announcement as a "chance for the retail betting industry to go back to its roots", and that this meant "a more collaborative and healthy relationship with horse and greyhound racing".
Knowledge gathered during my six months of experience as a cashier in a William Hill probably don't match Mr. Knight's understanding of the sector, but I can't help but feel the statement is naive.
Personally, I think it's fair to state that perception of the industry is currently questionable at best. Rather than focusing on the next gamble they want the punter to take, could now not be an opportunity to 'reset' how the industry is perceived?
Research we carried out in May 2018 revealed SkyBet to be the favourite mobile gambling platform of hedgehog lab employees.
Though the company have previously been penalised for failing to protect vulnerable customers, they're arguably the first to have shown their hand in becoming more pro-active. The company have been prominent in promoting responsible gambling, and recently committed £1m to educate the English Football League around the topic.
However, the same research also revealed overall dissatisfaction with mobile offerings in the sector. One respondent noted that: "Gambling apps are filled with UX dark patterns". In fact, it quickly emerged that most find current platforms challenging to use, with the majority of participants telling us that bookies fail to present information on-screen in a way that is meaningful to them.
A quick mock-up exploring how conversational UX and AI could be used to improve user experiences in mobile betting.
It strikes me then that the opportunity in the rise of AI is not in creating more ethically questionable practices like limiting customers. The future of AI in gambling, and maybe even gambling itself, comes in meeting the desires of the customer. Surely this is the only way everybody wins?
What do the bookies think?:
To get more insight into the (perhaps illogical) quandary, I got in touch with Max Andrew, Founder of the exciting new platform, betsharp. The market's latest entrant is seeking to disrupt the big names, empowering customers through a streamlined betting experience, access to credible tips and the ability to view detailed statistics of your own betting.
Could you start by giving us a description of what betsharp is, and how the idea came about?
“The idea behind betsharp is simply about giving more control to the punter. At the moment, there’s actually very little of that going on in the major apps. Even at a basic level, the betting experience is clunky and not particularly intuitive.
"Most current options are also completely separated from the offerings of tipsters. In my own experience, I always used to spend time reading up on tipsters, but beyond their own back-patting, I could never verify how good they were. A lot also like to be paid online via card, which was something else I wasn't keen on.
"I wanted a way of finding the best tips, integrated into a betting experience that is far better than what is out there currently. I wanted to see how well I did, how well I do in certain sports, on certain teams, bet types and more - but I couldn’t get any of this information from the major bookmakers.
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"So that's precisely what we've gone about creating. In one line, betsharp is a smarter betting experience with better tips from proven winners.
"We've also got exciting plans for the future that include the addition of more social elements as well as experiences based on data we collect around individual sessions, and the subsequent use of AI to tailor our offering to the user.
"There have been small updates to other apps that do make things that little bit tidier, but there’s never been a true change in the way they view and approach user experiences."
Can you expand on your thoughts on the current approach of major bookmakers concerning the experiences they deliver?:
“For me, it's underwhelming. Not just regarding front-facing experiences, which are always disjointed but also in the stories you hear about customers being 'caught out' by sneaky terms and conditions.
"Nevertheless, most surprising for me is that billion-pound companies can't put together a sleek app. On a personal level, I used to enjoy gambling, but I've never found the experience of placing a bet enjoyable.
"I don't think having happy customers and profit have to be mutually exclusive. It's a difficult one, but I don't doubt for a second that you can improve customer experiences while making money."
And what are your thoughts on the current state of the industry?
“Brick and mortar looks very difficult for bookies at the minute. If you compare Bet365 to William Hill, where one is solely digital, and the other has massive street presence, there is one that is clearly feeling that.
“I do think the gambling industry is headed to move pretty much entirely online. A lot of stores have relied on FOBTs to generate the bulk of their income, and with a new cap, their income will take a hit.
William Hill believe over 900 stores will become unprofitable following FOBT limits. Image credit: William Hill.
“It's also worth noting that the audience for betting doesn't have the same characteristics of previous generations. The modern punter is usually a lot younger - a young professional, usually not someone who'll stake vast amounts at any one time, and someone who will bet only on sports they like and/or they’re watching.
"For these punters, it's more of a recreational activity. Previously, gambling might have been seen as a life-changing opportunity. For me, that's a shift that I don’t think has been seen by the people at the top of these companies.”
In which case, do you think there's room for disruption in the sector, or will the status quo remain?
“Personally, I think there’s enormous room for disruption in the industry. It’s always been a slow-moving industry, where nothing major seems to have changed. Even though there are only a couple of start-ups popping up, it looks as though it’s going to be changed dramatically.
“Of course, it won't be easy because brands like William Hill have been around for years, but once we get over that trust barrier, I think we’ll see a lot of disruption."
Why investing in customers is the progressive bet:
If all of the above shows anything, it's that talk of integrating emerging technologies into gambling experiences is actually way premature. Though customers will likely be more excited by betsharp's customer-first plans to utilise AI over Paddy Power's more defensive intentions, there has to be an industry-wide realisation that nobody is even getting the most out of mobile yet.
I'm a long-time admirer of Paddy's marketing department, yet I can't help but raise an eyebrow as high as The Rock's when their latest TV advert comes on. Claims of substantial investment to make their app "top of the league" are hugely misguided. What the company have actually done is plunged money into their app to make it faster.
Our research revealed gambling apps to be hotbeds for fragmented user experiences. That betsharp was born as a response to this only further validates the finding. Perhaps the most startling discovery in writing this blog is that the sector's most prominent names just don't know their customers.
The good folks of Paddy Power Betfair would do well to read around why starting with the solution is foolish. Customers undoubtedly want a better app - but was speed ever really the problem they wanted to be solved? I'd love to be proven wrong, but having loaded their app up myself and tried navigating through a few markets, I can't help but feel the decision reeks of internal assumption, not detailed user research.
It seems then that there is still quite substantial room for improvement in mobile offerings from those in the sector. Unless big players begin to put their customers first and dedicate resources to getting to know them, they're gambling with their own future.
We'd like to thank Max Andrew for kindly dedicating his time to provide us with his thoughts. betsharp is available on iOS. For updates on the platform, follow them on Twitter and like their Facebook page.