Problems In The Gambling Industry & How To Improve Them

I was asked by Trademate Sports “what is the one thing you’d like to see change in the gambling industry?”. As I started to write my answer, I found myself listing multiple inter-connected problems rather than one thing in particular. Let’s be honest, there’s a lot of room for improvement in the gambling industry.

The way the industry handles problem gambling is undoubtedly an issue, and an obvious conflict of interest. But I have also considered that drinking alcohol, eating too much fast food, smoking (even vaping) and trading on the stock market, like gambling, can be addictive and bad in excess — but are ultimately better to regulate than ban entirely.

In the end, I came to the the conclusion that the bulk of the industry’s problems stem from one thing: lack of transparency. And this overarching problem can only be tackled by governments and gambling regulators; we cannot expect an industry built on greed to improve on it’s own accord.

My original answer was published on the Trademate Blog, but the subject deserved an ‘extended version’. So here it is…


The Problem Isn’t The House Edge

It’s no secret that gambling companies have the upper hand. Online Bookmakers earn from their ‘overround’, while Casinos earn from an ‘edge’ (which depends on the specific game or slot being played). This is their advantage and, effectively, their charge for running the service. It’s public knowledge.

In my opinion, the problem isn’t the mathematical advantage gambling vendors have. It’s that so many of them use shady, dishonest, underhanded tactics to further increase that advantage to earn more money. As a result, players are at constant war with online Bookmakers and Casinos, fighting over who owes who what.

While gambling sites must fully protect themselves against fraud and other illicit activities — such as money laundering and promotional abuse — it’s too often used as an excuse for not paying legitimate customers their winnings.

Only the relevant authorities can step in to put a stop to unnecessary disputes and build a more transparent industry.


How To Improve The Gambling Industry

Here’s some ideas for what I’d like to see across the board within the gambling industry. None of my suggestions are difficult to implement — but I believe they would make a huge difference.

Upfront Verification

Currently many gambling sites are more than happy to take deposits and accept bets… up until winnings are withdrawn by the player. But if ID checks are there to prevent fraud and verify age, then why are losing bets allowed? Why does that make a player exempt from undergoing verification?

To preserve integrity, ID checks should always be made upfront BEFORE money is deposited into an online betting site. If there’s any discrepancy whatsoever (address, name, IP address, etc), that needs to be investigated prior to any transaction taking place.

It’s important that once a customer has passed verification, vendors would be in breach of their licence for asking for more documentation for a fixed period (six months, for example) unless exceptional circumstances require it. For example, if a money laundering investigation has been granted by the regulator or government. This prevents sites from using customer verification as a payout delaying tactic — which leads me onto my next suggestion.

Strict Payout Times

Regulators should require that vendors consistently meet strict payout deadlines and quotas (e.g. minimum of 99.5% of customer withdrawals processed on time within a calendar month), or face an investigation which may result in their licence being suspended or revoked.

Payout delaying tactics are well-known and common within the gambling industry, so there has to be real consequences for being caught using them. The more authorities punish poor customer service, the higher overall standards will become.

Personally I’d like gambling regulators to publicise up-to-date statistics on their licencees — such as their payout times — in a league table format. Gambling companies need the motivation to provide an excellent customer service, or risk damaging their reputation.

With a ranking system, gambling companies would compete against one another for the top spot. Thus a high rank becomes a badge of honour that can be used for enticing new customers. In theory the best companies will attract the lions share of business; which is precisely the way it ought to be.

Winners Allowed

It seems fitting that in a world where gambling companies have the edge over the vast majority of their players, winners should not be banned.

While gambling sites could argue that too many winning players would run their business into the ground, there are people out there who have completely ruined their lives (and lives of others), through compulsive gambling. There’s no cap on what you can lose online — so it’s not unreasonable to require that profitable bettors are granted, at the very least, a low maximum stake.

After all, gambling companies have agreed to participate in a business that runs the risk of losing money. That agreement should be honoured to the public. Yet it’s somehow normalised that gamblers should not, and cannot, win. That’s got to change.

Bonus Overhaul

Bonuses are abused by advantage players, meaning that legitimate customers are now caught in traps laid by the gambling companies in retaliation. This just about sums up the constant war between players and gambling sites.

Most bonuses are misleading, have ambiguous/contentious terms, and are minus EV (meaning players are expected to LOSE money by taking them). This, sadly, only increases disputes. In any other industry, it wouldn’t be allowed by advertising standards.

Regulators need to consider the negative impact promotions have on the industry, and take aggressive steps towards standardising bonus formats. Ideally gambling sites would agree to follow a bonus template with simplistic terms that cannot be modified or added to. Then, if they refuse to pay customers based on the framework agreed, they lose their rights to use bonuses as a means of enticing new customers in the future.

Standard templates would ensure that gambling sites set mutually beneficial promotions that can barely (if at all) be exploited by advantage players, and equally do not lure unsuspecting customers into losing money. To date, the right middle-ground has never been struck (particularly when it comes to Casino bonuses).

Improved Gambling Education

The UK Gambling Commission have stepped up their efforts in improving the content provided by affiliates. It’s a positive move, especially since many affiliates have historically mislead gamblers with the illusion that they’ll earn big by following their advice, when in fact they want them to lose.

But let’s also bare in mind that gambling companies have long profited from their advertising partners and actively encouraged them to convert customers by any means possible. Gambling companies knew exactly what misleading tactics were being used by their affiliates but did nothing to stop it. In fact, they encouraged, and rewarded them for the results. Some still do.

So rather than deflecting the blame onto third parties, why not require that gambling sites take more responsibility themselves? After all, there’s nothing that’s stopping them from providing educational content. Nothing except motivation, of course…

The bottom line is that Bookies/Casinos do not want to educate their customers. Stating the facts about gambling doesn’t make them look good, nor help them to make more money. So once again, the regulators would need to step in and force all licencees to provide an array of gambling educational resources on their sites. These articles and/or videos could explain exactly why gamblers lose money, and what the likelihood of winning actually is. This goes hand-in-hand with my next point.

Visible Edges

The online gambling industry has somehow evaded the responsibility of fully informing gamblers of what they’re getting themselves into. Just think: in the UK you can’t buy a burger from McDonalds without seeing the specific calorie count listed on the menu board, or purchase a packet of cigarettes without “smoking causes cancer” printed onto the box.

But doesn’t gambling also pose a health risk? Where are the prominent warnings about the losses one could make? In this day and age, players should see the relevant edge clearly presented next to every betting market and Casino game they’re on — not just the token “gamble responsibly” effort.


Raise Standards, Not Losses

Sure, some regulators are beginning to implement a few of the above suggestions. But there’s still a very long way to go before the gambling industry achieves real transparency.

Unfortunately the focus of gambling companies is not only increasing the amount of stakes placed through their sites — but on maximising player losses through various unscrupulous means. That’s the injustice and greed gamblers face and, ironically, it can only have a detrimental impact on player retention.

To put it into context, imagine if an online retailer refused to grant you a refund for a broken item. Or sold you a fake item. Or simply kept your money without sending any product to you in the first place. Regular gamblers will understand the parallels.

For most companies, survival and longterm success couldn’t possibly come from deceit; it comes from quality. But until the gambling industry is standardised and cleaned up, it will not follow the same principles that dictates the success of other businesses. It will continue to follow it’s own rules.

For this industry to truly change for the better, there should be no tolerance for underhanded tactics. There should be real consequences for breaking promises. There needs to be utmost transparency right from the moment you deposit until you withdraw winnings — if you’re even lucky enough to do so.

Toby @ Punter2Pro
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