Regulations pose threat to the online gaming industry

Regulations pose threat to the online gaming industry

Online gaming is a large and highly lucrative industry, which is still unregulated in many regions around the world.

However, what happens when a previously unregulated market suddenly becomes increasingly regulated? In this article, partners Incopro and Ports Group present what is to be learnt from markets that already have been regulated, a theme that will be elaborated at Ports Group’s seminar in Malta later this month.

Even though many regions are still unregulated around the world when it comes to online gaming, one notable exception is the United Kingdom. The UK is highly regulated, and general trends seem to suggest that many other regions are looking to replicate this in the coming years. As such, there are many lessons that companies can learn from the UK as they look to prepare themselves for the future.

Regulations in the UK are set by the Gambling Commission and must be adhered to, this also includes an overarching set of key principles:

  • Preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime.
  • Ensuring that gambling is conducted in a fair and open way.
  • Protecting children and other vulnerable persons from being harmed or exploited by gambling.

Who monitors this activity?

There are three entities tasked with regulating the industry: United Kingdom Gambling Commission (UKGC), Advertising Standards Authority (ASA) & the Information Commissioners Office (ICO). Whilst the regulations themselves are relatively limited, they must be strictly adhered to. In particular, they include provisions such as that:

  • Promotions and marketing material should not have misleading offers such as ‘free bet’ offers
  • Marketing communications must include limits and qualifications
  • The adverts must not be ‘indecent, pornographic or offensive’
  • No individual under the age of 25 can be featured gambling

In a highly saturated and competitive industry, where companies attempt to gain any edge over their competition, the significance and implications of strictly enforced regulations such as this cannot be overstated. These rules ultimately assert the principle that significant conditions for promotions cannot be buried in the terms & conditions but must be displayed in the main body of the text, granting transparency for the consumer.

Upcoming regulated markets

As an increasing number of markets are becoming regulated, it is ever more important to understand the regulatory framework. Another market due to become regulated is the Swedish market, due to be regulated on January 1st of 2019.

Although the regulatory framework is yet to be implemented, there are already some indications on the changes as to how gaming firms can market their services in the years to come.

Some of the guiding principles are the following:

  • High levels of consumer protection (including data protection)
  • Marketing of services shall be moderate and not targeted

The Swedish Gambling Authority has the right to act against breaches of the regulations and their sanctions include:

  • Revoking the gaming license
  • Fines
  • Formal caution from the authority

Gaming companies applying for a Swedish gaming license would be wise to look for insights from already regulated markets to ensure a flying start in a new market.

Affiliate marketing

Gaming operators often rely on marketing affiliates to get their offers out to a wider audience. The affiliates might in turn have thousands of ad-serving companies associated with them. This pyramidal structure makes it hard to monitor their activities on a regular basis.

Affiliates are still bound by the same rules that gambling companies are, yet they might knowingly or unknowingly push the letter of the law when trying to gain attention in the marketplace.  When this happens, promotion comes at the cost of a reputational damage and potential repercussions for the brand owner.

Incopro’s work with online gaming companies

Incopro has a number of clients within the online gaming industry and work with them on two fronts: false claims of affiliation and affiliate compliance.

Firstly, we identify online entities that are acting as if they are an official affiliate although they have no legal connection to our client, and get them blocked from the various platforms.

Secondly, we monitor legitimate affiliates and ensure that they are following the rules as laid out by UK law.

Incopro does this through two combined technologies, Talisman and our ad monitoring module, which allows us to scrape the internet for instances in which the brand name, logo and copyrighted materials are being used without authorisation, as well as tracking ads on a variety of sites which might cause compliance issues.

A holistic brand protection strategy for the Gaming industry

The capacity to operate freely in a key market is the most important aspect of business for most companies. Therefore, regulatory risk should be a key focus for gaming firms operating in regulated markets.

The brand impact of breaching regulations can have severe impact on the trust of consumers, investors and authorities.

Ports Group, have a pedigree when it comes to protecting brand rights of gaming companies. A successful strategy for protecting starts with having the correct trademark portfolio as well as all domain names having the correct ownership and managed in a secure way.

Another cornerstone of this strategy is to monitor the brands together in near real-time across the entire internet.

A holistic brand protection strategy ensures consumer trust and maximum shareholder value. Key components for growth in a competitive market.

Ports Group and Incopro are proud to partner up in order to enable our customers to protect their brand in the most proactive – and reactive – way possible.

Ports Groups seminar is being held in Malta on the 27th of September, if you would like to register go to!

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