In a roundup of SBC Leaders Magazine pieces from this year, Paul Foster, CEO of Crucial Compliance, assesses the different use of technology in implementing a safer gambling strategy and whether a ‘human touch’ is still needed to identify high-risk players.
Addressing gambling related harm has become a key focus of the betting and gaming industry as we’re seeing more markets open up, and more mature markets undergo a regulatory review. This is particularly apparent in the UK which is awaiting the findings of the 2005 Gambling Act Review.
Technology has an increasingly important role to play in upholding safer gambling standards, and according to Crucial Compliance CEO Paul Foster, this can bring numerous benefits for betting operators – particularly in areas such as affordability modelling.
For large-scale operators, technology can be essential in identifying the first signs of gambling harm. This, however, must be followed by a human-led interaction.
“I think they both have a place,” he explained. “Within every market, you have to look at what publicly available information you can get and then what you have to do is model that in relation to player protection – use it at the core of an algorithm or as a model for actually spotting it. In that way, it can be used very successfully.
“The issue we’ve got is that there’s an expectation that this is going to be the silver bullet and, unfortunately, there’s very few countries in the world where you can get the level of financial data that will give you an accurate affordability figure.”
As with any developments in the betting and gaming industry, particularly with regards to player protection, there are challenges and hurdles.
Notably, Foster maintained that companies cannot completely disregard the ‘human touch’ when it comes to creating an effective harm minimisation strategy, adding that technology should complement the human decision making process.
He explained: “Technology has to be tuned into your business and once that has happened, it has to flag high risk cases which need human intervention. This is because the only way to effectively look at reducing gambling-related harm is to track it in the form of behavioural change.
“Identification is only the first element. Whilst the system and AI will notice behavioural change, it can’t interpret what that information might mean. For example, it cannot comprehend why you might deposit three times as much on a Tuesday night – whereas the human eye might notice a casino win the day before which has just been deposited, or that the player has just reached payday and is making a long-term deposit.
“Safer gambling is always going to need human intervention to review on a case by case basis, especially in relation to high risk and very high risk cases. You initially need technology to identify behavioural change but you cannot rely on technology all the way through.”
Discussions soon moved towards the introduction of more stringent affordability checks. Many across the industry have voiced concerns over whether enhanced checks could “have negative impacts on the customer”.
Although Foster also noted that the same could be said of an over-reliance on technology should a “sledgehammer approach” be adopted.
This, he asserted, was the case when affordability checks were first implemented as the industry was and is still learning. He added that this remains an issue with technological development on player protection.
He continued: “The problem with any change in regulation and any new technology is that until we really understand it we will over rely on the initial solution to keep compliant, which impacts operator effectiveness and the customer.
“What we are doing often is implementing change to match regulation with the technology available and without understanding. This means a lot of these changes initially can have negative impacts on the customer rather than positively impacting them until we manage to train the technology.”
It is particularly important for betting firms to review the technology they have available as it is a ‘constant battle to keep it up to date’, especially methods such as Artificial Intelligence (AI).
With AI being the ‘big word’ in player protection, Foster focused heavily on the importance of understanding how technology needs to be interpreted and trained so that it can be used effectively.
“AI models are ultimately only as good as the person writing them,” he advised. “And the major problem facing the gambling industry right now with regards to their adoption is that AI is still in its infancy.
“As we look forward and we increase the level of high quality investment in this area then what we will see is better and better AI intervention. But it is very difficult to take an AI model used elsewhere in the gambling industry or outside and convert it into a player protection tool.”
He added: “All I would say is don’t buy something that is shiny or new when what you need is old fashioned advanced algorithms.”
Providing industry stakeholders with a snapshot of what to expect from the review, the UK’s Gambling Minister Chris Philp has repeatedly stated that he would like to see greater use of technology and data as tools for counteracting and minimising gambling-related harm.
Foster agreed that this approach could not be more important for both operators and the UK Gambling Commission, as he noted that the UK’s approach to data has lagged behind many of its European counterparts – although “nobody has yet got it right”.
“Some are a lot better at getting data. If you look at ARM in Italy, it tracks all the data you need, so you can put a player protection system in via a regulator,” he commented.
“In Spain and France, their regulatory returns highlight data where you could set the data across the market for player protection – as is the case in the Netherlands and even Sweden. What they have is a framework that they haven’t yet extrapolated to player protection, but they can.
“In the UK, we have the opposite. We have poor data collection, we have a poor single view of customers across the industry. It is a mess and as a result, the UK is going to struggle to catch up to the rest of Europe when it comes to data, not when it comes to regulation.”
With regards to the actions of the gambling companies themselves, the CEO argued that firms should put their primary focus on data before making any decisions with regards to technological implementation.
“Operators need to look at their data first, and build a technology solution based on that available data,” he stated. “Every operator has different data, every operator stores it in a different way, and therefore the operator has to understand what their data is before they can even consider a technological solution.
“It is only data that can drive a true customer protection strategy, and it’s how you manipulate and use that data which makes the difference. Gambling companies have been brilliant for years at using that data for customer acquisition, retention, bonuses and promotions. But it is that same data that can be used to help player protection.”
In order to effectively leverage this data and develop a strong technological basis for player protection, operators must also deploy a strong recruitment strategy in this area, both internally and externally.
“When it comes to hiring, what’s really important is that you pick the people either within your business or outside who are interested in player protection, who want to learn about it, who have passion for it, and are willing to adapt their skills and their qualifications to player protection data analysis rather than just general data analysis.”
Ultimately, however, there is ‘no silver bullet’ to player protection and problem gambling, and further investment is needed – in time, money and people – for greater development in this area.
“Compliance isn’t a profit centre but it is a cost centre,” Foster concluded. “If you look at the financial services industry, the insurance industry, pharmaceutical industry, they invest heavily in compliance for this reason, compared to gaming companies. The industry must invest now if we are to manage effective change.”