Advertising restraints in new markets

By Gambling Insider
Gambling Insider regular columnist Gustaf Hoffstedt and General Secretary, BOS, analyses the impact of advertisements in fuelling gaming regulation.

Few things in our society have, in recent years, been more disparaged than gambling advertisements. Truth be told, we can surely admit their level of creativity often leaves a lot to be desired. Compounding the issue is the sheer volume...

While the Swedish gaming industry’s marketing spend, or share of voice, has dropped significantly in recent years (particularly across traditional media), volumes still sometimes reach exhausting levels.

When Sweden launched a new licensing system in 2019, the torrent of advertisements became almost comical. While listening to commercial radio during my morning commute, the 30-second gaming ad spots
would be stacked one after another; with seven or eight consecutive ads all trying to convince me why their gaming platform was the absolute best.

Looking back, it’s possible that we as a trade association could have done more to curb the onslaught when the new market was coming online. What followed came as a surprise to no one: several ill-conceived political proposals, prescribing advertising restrictions that threatened both our constitutional freedom of expression and the degree of channelisation to the new legal market. The same debate is now engulfing other gaming markets that are in a similar state of transformation, including the Netherlands and the US, and the issue will likely again be top of mind when Finland, Norway and other jurisdictions sooner or later introduce licensing systems. I encourage them all to learn from the mistakes that were made in Sweden and be better prepared than we were.

The message to the industry needs to be: do not use the same playbook again, opening the floodgates whenever a new system is introduced; but rather, show restraint. Let your national trade association be your guide. To the legislators and regulators, I say: accept that advertising spend will spike during the first year, but things will calm down once the fortune seekers have drained their marketing budgets and pulled out.

Gambling ads are almost always front and centre whenever the issue of problem gambling is raised. I think that is a mistake. While academic research supports the notion that advertising can trigger rash actions among problem gamblers, other responsible gaming measures are far more important in creating a safe gaming market.

It’s my belief that the reason why advertising has taken such a prominent position, in the public’s perception of what causes pathological gambling, can be found in its indiscriminate reach, affecting gamblers and non-gamblers alike. Gaming commercials, especially in traditional media, touch a wide audience. Promotional offers from internet casinos reach my dad, who will never try his luck online, despite his son’s penchant for blackjack. Messages about this week’s lottery jackpot reach my mum, who has never bought a lottery ticket during her first 79 years of life. 

While other responsibility tools are geared towards the relationship between the operator and the player, advertising affects the relationship between the operator and the public, which has long been shaped by misconceptions. According to a survey commissioned by the gaming company ATG, four in five Swedes believe 25% of the adult population are problem gamblers, while the actual share is somewhere between 1-2%. I think this grotesquely exaggerated notion of problem gambling’s prevalence in society stems at least in part from gaming’s aggressive marketing and dominating share of voice.

The situation is reminiscent of the prisoner’s dilemma, probably the most popular game analysed in game theory, which shows why rational actors might not cooperate, even if it is in their best interest to do so.The individual gaming company knows that the total sum of advertising will damage the industry’s reputation, leading to an excessively harsh regulatory backlash that negatively impacts the individual company’s ability to make a profit. At the same time, the individual company knows that if it does not invest in marketing at a similar rate as its competitor, the latter will gain market share at its expense. This is where an agile trade association has a part to play whenever gaming markets are re-regulated. The solution is called a shared code of conduct. Only through self-imposed marketing limitations can more harmful government-forced restrictions be avoided.

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