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IN-DEPTH 4 January 2016
Improving the industry's image
Micky Swindale, managing director of KPMG Gibraltar, considers how corporate social responsibility can enhance the public and political perception of gaming
By Micky Swindale

Corporate Social Responsibility is something that gets people in the industry talking. I know this because we had two sessions on the topic at the KPMG eSummit in Gibraltar in April, and I think it’s fair to say they generated some quite enthusiastic debates amongst our delegates throughout the two-day programme.

It’s an important topic for any industry, but particularly one that still suffers from a lot of negative public perception. Gambling has always had an image problem, of course, stemming from the undeniable fact that for certain individuals it can enable damaging behaviour. This has only been compounded in recent years, however, by its increased visibility on television and its partial association with so-called ‘tax havens’. Indeed as public perception of the conduct of all industries shifts, and rightly so, towards transparency, fair play and uncompromising accountability, this problem of perception is likely only going to become more acute.

The fallout from poor public perception can of course be enormous. The payday loan industry provides a current example of what can happen, with companies like Wonga seeing a significant reversal in (literal) fortunes after popular campaigns against their business model and its detrimental effects on some consumers. Closer to home for most gaming companies, the level of concern and political attention aimed at Fixed Odds Betting Terminals (FOBTs) in the UK is nearing crisis point, and without recourse to a public forum with which to inform public, and consequently political opinion, the industry could see them being severely restricted or banned in the near future.

Yet surely the modern gaming industry – and particularly its online component – does not need to accept poor public perception and the risks that it brings as inevitable? The modern gaming industry, and again particularly its online component, prides itself on a history of agility and its responsiveness to the social barometer. Its ability to appeal to and protect customers within the parameters of some of the world’s most stringent regulatory principles could well be regarded as the linchpin in its unerring and incredibly lucrative rise to prominence. So where do the solutions to this perennial problem lie?

The challenge is not to sell gaming companies on CSR but rather to encourage greater collaboration in addressing that issue and promoting the good that the industry does
Gambling may be a traditional ‘vice’, yet the lottery industry is generally very well thought of, and I think a large part of that is down to the very visible charitable role that most lotteries play. That is why the eSummit delegates were so exercised by the topic: they felt that it was possible to change the public face of gaming through good corporate citizenship, and they were interested to discuss what that might look like.

One element of it is to very simply follow the lottery model and openly share more of the profits with the community. Most properly regulated and licensed gaming companies are already doing this, but the effects are often constrained to the specific communities their offices are based in. PokerStars, for example, is extremely well thought of within the community of the Isle of Man because of their substantial charitable endeavours, and there is hardly a sporting event that takes place on the island that doesn’t have the Microgaming stamp on it. The challenge for the industry, then, is to expand this net; to give consistently and in a coordinated fashion to the sort of major national and international causes that, as cynical as it may seem, will be more visible to both politicians and the general public.

But CSR is about more than just buying positive public perception. Another angle that is important from the point of view of maintaining the sustainability of the sector is its advertising. The Senet Group, which was established in September 2014 with the goal of encouraging greater responsibility in the industry, led one of the presentations at the eSummit, and one of their key messages to the industry has been to clean up its advertising. Controversial marketing, such as the now infamous operator campaign allowing the public to bet on the outcome of the Oscar Pistorius trial, arguably gains the operator a short-term influx of new players, but it does so at the cost of harming the industry’s reputation as a whole. It does this by catching the attention of politicians who, due to a lack of other involvement, won’t separate one operator from another, but instead lump them all in the ‘bad guys’ category together. Let’s face it, no politician is going to receive brownie points from the redtops for praising the activities of gaming companies.

Equally, it could be to the advantage of the industry as a whole to curb the amount of advertising it does on certain media at particular times. Multiple operators all taking television advertising around major sporting tournaments, for example, can cause a concentration of gambling advertising that might make it seem like sports gambling is more widespread and problematic than it actually is. It is very promising to see that several large operators, including Paddy Power, William Hill, Ladbrokes, and Coral, have now signed up to the Senet Group’s responsible gambling and advertising standards, with plans to launch their own series of responsible gambling television ads. The imperative is now stronger than ever.

One area of corporate citizenship in which the online gaming industry is already particularly strong is in handling problem gamblers. The regulated industry has engaged in almost unprecedented levels of data sharing, often across multiple borders, in order to help identify, track, and support problem gamblers. It has been instrumental in establishing dedicated support groups, self-limitation and exclusion programmes, and in some cases even takes the time to warn a player if their behaviour is identified as erratic or uncharacteristic. It has done so from its earliest days without being prompted in advance by pressure groups, policy makers, or its own regulators, and for all of this rarely receives appropriate credit. Again, the challenge is perhaps not in whether or not properly licensed operators such as those found in Gibraltar, the Isle of Man and the UK are doing enough, but whether that effort is visible to the politicians and influencers of public opinion who might do the industry harm if they remain blind to the positives.

Those of us who know the industry well also know that it shouldn’t suffer from an image problem, given all the good corporate citizenship its operators engage in. We also know, however, that it does suffer from one regardless. The challenge is not to sell gaming companies on CSR – they are already sold and acting on it – but rather to encourage greater collaboration in addressing that issue and promoting the good that the industry does. Industry bodies such as the Senet Group are making headway and it is of course encouraging to see the topic get such engagement at the KPMG eSummit, but more can – and should – be done.
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