It can be difficult to find an honest analysis of the UK bingo industry - or any form of gambling - that isn’t influenced by commercial interest or editorial taboo.
Last April, we published our own account of how some bingo brands and portals are putting business greed above player safety.
Fast forward 12 months and many of these problems still exist, but so does a determination to improve in future.
One person at the forefront of this movement is Dr. Kate Bedford, Reader in Law at Kent Law School and team lead at The Bingo Project.
The Bingo Project is a three-year initiative exploring the regulation of bingo in four regions around the world: England and Wales, Canada, Brazil and the EU (online only).
We spoke to Kate and her colleague, Dr. Donal Casey, Lecturer in European Law, about what their findings mean to bingo players in the UK and around the world.
You can read our full interview below.
OB) How does the protection offered to bingo players by British regulatory bodies compare to the other countries you studied?
Bingo players are best protected when games are legal and governed by a high quality regulatory system. This system should be responsive to the distinctive nature of bingo, well-staffed and properly funded to help develop staff expertise and allow inspections to be conducted.
When bingo is illegal - as it is in Brazil, for example - opportunities for corruption increase and the game tends to be driven underground, leaving people more vulnerable to exploitation. As a bingo player in Brazil told us:
“I’ve had the police come several times [while playing at a clandestine bingo]. They wave a gun, ask you to raise your hand. They open your bag, examine you, take things, money, if there’s enough money in the bag they take it thinking it’s from the bingo.” Female bingo player, Rio Grande do Sul
We can certainly say that UK bingo players are better protected than this!
The implementation of licensing systems for online operators has helped to improve the protection of internet bingo players in many countries since the first bingo website opened in 1998. As one of our interviewees told us:
“I think that perhaps in the early days…. it was a bit wild west. Whereas (now) it’s got a lot more serious. It’s got a lot more suited and booted and leaner. It’s kind of a lot more, serious players in the market now, whereas back in 2000, early, early noughties… it felt pretty maverick, a bit of Del Boy.” - Male, software provider
Regulators in countries such as the UK, Italy and Spain, have implemented licensing systems which aim to restrict market entry to reputable firms only, in turn creating standardised approaches to responsible advertising, availability of responsible gambling tools and rapid payment of winnings.
However, there are differences between the jurisdictions with licensed regimes. In Belgium, for example, you must hold a land-based licence to operate online and it is a criminal offence for consumers to play on unlicensed sites.
In Spain, prizes must come directly from the common pool of money wagered in a particular bingo game (pari-mutuel), limiting the types of promotions that can be used. Wheras, in Italy, only 90 ball bingo is permitted and prizes can be awarded for just the first line and full card.
Despite the differing approaches to national regulation, there has been a more general trend towards the standardisation of regulation within the European Union, as more and more member states move towards licensed regimes. Jurisdictions are learning from each other and perceived best practices are being widely adopted.
In 2015, the UK shifted away from a system where operators could be licensed by regulators that were on a ‘white-list’ of approved locations (Gibraltar, Malta, Alderney), to a system where the national regulator, the Gambling Commission, licenses all sites. One motivation for the change was the desire to tax operators, but another was to increase the protection for uk-based players.
It was hoped that the single body could introduce more standardised measures, such as the creation of a self-exclusion register for online operators and the better monitoring of advertising practices.1
OB) Your report discusses the ability of bingo websites to translate the land-based bingo hall experience to the online environment. What do you feel are key aspects missing from the virtual game?
Firstly, land-based bingo is well-known for being a social experience that mixes play with entertainment, as well as the chance to catch up with friends and family. Even when the numbers are automatically generated and the process is computerised from the back-end, callers are key to making the game entertaining for the customer. In most places you still need to physically call out to win, even if a machine is marking off your tickets for you.
The fact that there is no participation required to win in online bingo means that it is quite passive. An online bingo software provider commented that playing online bingo was a little like playing the lottery – you buy your ticket and just sit back and wait to see if you win.
A lot of players are dual-screening. This has led many operators to focus on developing the social side of the game in order to keep players interested, and to encourage longer play times and higher spend (some operators also use chat hosts to actively encourage spend).
In fact, although online bingo is often assumed to involve no social interaction, our research indicated that chat forums are crucial for many players – so the social dimension is not as absent as people might expect.
Of those we spoke to, both nonprofit and commercial online bingo operators across a number of jurisdictions, highlighted the social nature of the game as a distinctive feature which sets it apart other forms of online gambling.
One operator who had designed an early online bingo site explained:
“The chat room, I think it’s the most distinctive feature of the game. Bingo is a very social game, compared to all the other online games… Somebody said, let’s make a bingo without chat, I said, we can’t launch bingo without chat, because the chat is everything.” - Female National Lottery operator
However, it is bingo’s distinctive nature which is often missing on sites run by non-specialist operators. As one regulator put it:
“Companies that have specialised in bingo I think have a more fundamental understanding of their bingo customers…. I think companies that are generic online gambling companies and have embraced bingo as part of their suite of products don’t have the same, how can I put it? They don’t have the same sense of community as perhaps you know, a mainstream bingo company would have, because they understand the culture, the history of bingo as a game.” - Male national regulator
An online operator’s connection to land-based bingo influences not only the social element of the game, but also things such as the price of tickets and the choice of side games. All of these impact the community feel of a website.
Secondly, land-based bingo is well known for the key role played by non-profit actors (churches and synagogues, village community centres, schools, charities, working men’s clubs, miners welfare institutes, etc). In some countries, such as Canada, Sweden, Denmark and Ireland, the game is associated more with charitable fundraising and mutual aid than it is with commercial gambling.
Regulators of the online game often fail to understand this link and to consider its relevancy when the game moves to cyberspace. When we recently contributed to a parliamentary report on the state of gambling research in the UK, we recommended that policymakers pay more attention to supporting non-commercial forms of gambling, including in the online environment.
In our view, policymakers and regulators should consider giving greater consideration to the fundraising role that online bingo plays and could play for third sector organisations, and to exploring how such organisations could be supported in offering services.
Perhaps policymakers could consider incentivising software providers to work more effectively with small nonprofit organisations wishing to offer online bingo but lacking the technical expertise, for example.
OB) Up until now, the EU has refrained from offering over-arching online bingo legislation on the continent. Do you believe this will change in light of Brexit and what could this mean for British players?
It is very doubtful. All indications from the EU Commission is that there is not going to be an attempt to introduce EU-wide legislation harmonising online gambling regulations in the European Union.
However, the Commission has sought to engage in a ‘soft’ form of harmonisation through the development and publication of a non-binding, Recommendation on Consumer Protection in Online Gambling. This is being used by many national regulators, and has proposed the development of common technical standards for online gambling equipment that would facilitate the licensing process in different member states.
What does Brexit mean for British players? It is unlikely that it will mean much in the short term as most British players are now playing on UK-licensed sites. It will likely impact operators based in Gibraltar quite quickly though, since they will have less access to the EU market.
OB) Your report describes how Spain recently revised its ‘bingo exception’ to allow bingo to be regulated in a similar manner to other casino games. This was to reflect the increasing provision of online slot machines. Do you believe that Britain could be subjected to a similar tightening of regulations? And, would you like to see it?
The specific example in Spain related to advertising regulations, and essentially whether online bingo should be treated like a lottery game (which has less restrictive regulation) or casino games (which have much more restrictive regulation).
Given that many of those playing online bingo were also playing online slot machines, the decision was taken to treat online-bingo like other casino games. This is something that has been mooted in the UK before given the bingo exception in relation to pre-watershed gambling advertising (along with sports-betting during sporting events).2
If the majority of online bingo sites are making their money from ancillary games such as online slots and casino games, and the strategy is to get players onto online bingo sites in order to use these ancillary products (which the data from the project seemed to indicate and which regulators are beginning to recognise), it does not seem to make sense that they should be treated any differently from online casino sites in terms of regulation.
Either bingo operators are wasting money on adverts, or they are advertising to get people to play games other than bingo.
The fact that online bingo sites typically offer harder forms of gaming as well (blackjack, roulette, and slots) has led to a widespread perception that bingo is usually intended as a loss-leading product intended to migrate consumers to more profitable forms of gambling. The preponderance of non-bingo operators in the online bingo market tends to support this view.
For example, profitability in online bingo often depends on relentless affiliate marketing, including by sites that are advertised as player guides or consumer-oriented comparison guides, but are being paid a share of revenues by websites. One player guide that we assessed in 2015 (that is no longer active) provided a list of “the best legal online bingo rooms”.
The list includes Joyland Casino; Golden Cherry Casino; Prestige Casino, Mona Casino, and two bingo games run by sports betting companies (Betfair and Bwin). We’d like to see improved transparency about this sort of affiliate marketing.
OB) The online bingo industry relies heavily on bonuses and free spins to attract and retain players. Did you uncover any examples of particularly exploitative promotions and do you believe sites do enough to accurately portray the wagering and withdrawal restrictions associated to them?
The Competition and Markets Authority is currently investigating the online gambling sector as a whole (not just online bingo) in relation to its use of misleading promotions and its wagering and withdrawal restrictions (along with other matters). The investigation began in 2016 and is continuing to date.
Further, the number of complaints to the Advertising Standards Authority (ASA) relating to gambling advertising has risen over recent years, with the majority of complaints relating to misleading marketing practices. Even just a quick browse on the ASA website shows that in 2016, there were two complaints upheld by the ASA in relation to misleading marketing practices by online bingo sites, and that one case was informally resolved.
OB) Your research did not find an association between regulation and the prominence of female bingo players. While this is the case now, many in the industry have seen a rise of male players as sites expand to include more slot machines and traditional casino games. Do you believe regulations will adapt to the balancing of genders, and how?
In the online context, the stereotype of the elderly female bingo player is particularly inaccurate since the gender balance is more equal and players are younger.
We didn’t find a neat link between gender, bingo, and regulation that held in all places. For example, we can’t say that bingo is regulated more loosely than other forms of gambling because women play it, and we can’t even say that women are always the core clientele – they are not the majority of players in the army, for example, nor in drag bingo run in gay bars.
But, we did find that gender was crucial to the ability of male-dominated non-profit associations (like churches, the armed forces and legions, working men’s clubs, service clubs like the Elks, and male sports clubs like football or hockey) to secure generous regulatory treatment for bingo.
In this sense, the gender of the players mattered less than the gender of the organisers and beneficiaries of bingo games. The widespread cultural association of the land-based game with harmless old ladies has also been a resource for operators who wanted to attract people to harder forms of gambling using the bingo label, as we see in all four of our case studies.
The retail (land-based) industry has been trying to attract more men, and more young people, to bingo for a long time. It has invested heavily in new technologies as part of that process, including ones that make the game more automated.
When regulators approve these new technologies, they are likely to change the gender and age balance of the game. As one Canadian bingo insider told us, when speaking about the increasing use of bingo machines (called verifiers):
“The new technology clashes with our typical bingo customer. When Mabel comes to play bingo, Mabel knows she can play thirty six bingo cards. She’s done it for years and she knows how to play the game. Someone new comes in and they can only play nine bingo cards.
“Well, in Mabel’s mind the new player has to pay their dues in order to be able to play that many cards to compete against Mabel, right? With the introduction of bingo verifiers a layman can come in and with computer assistance play the same amount of cards against Mabel and Mabel doesn’t like that. There is a bit of a clash that goes on.” - Commercial bingo operator, Ontario
Rules on how many tickets can be loaded onto digital machines are not just about the prevention of harm for potentially addicted players, then: they are also about preserving a sense of fairness for paper players, who are often older women.
OB) How has the bingo industry (online and offline) reacted to your report? Are you encouraged by this reaction?
The most common reaction we have had from operators and regulators is that the report had been useful in terms of learning more about what is happening in other countries. We have also been encouraged by the fact that Lindar (the operators of OnlineBingo.co.uk) got in touch to discuss the results: we are very keen to share the work, and hear about reactions.
OB) How would you like to see the online bingo industry evolve in light of your report and recommendations?
Discussions on consumer protection in online gambling focused on issues including problem gambling, underage gambling and responsible gambling. Greater attention could be paid to substantive fairness, with a shift in focus away from the responsibility of the player to be aware of the terms under which the game was offered, to the responsibility of the gambling service provider to ensure a high return of wagers to players, the monitoring of average player loss, fair wagering requirements, and the quick and easy withdrawal of winnings.
The clear display and better regulatory monitoring of average return to player rates would also improve fairness.
OB) What are the next steps for The Bingo Project and how can players stay up-to-date with new developments?
The four researchers on the project are spending this year writing up the academic results of the research. Kate is writing a book on bingo and the political economy of gambling regulation, based on the England and Wales research: it includes a chapter on online bingo regulation in the UK.
Others are working on articles that will be published in a variety of journals. We’ve connected up with researchers in other places working on similar themes and we are looking forward to collaborating with them in the future.
Visit https://www.kent.ac.uk/thebingoproject/ to download the full Bingo Project report, view additional resources and meet the team.
If you’d like hard copies of the final report or the policy briefs that were produced for regulators and policy makers, or would like to join the Bingo Project mailing list, please email: email@example.com.
1 Remote Gambling and Software Technical Standards (2015)
Under the Gambling Commission’s Remote Gambling and Software Technical Standards (July 2015), the products and platforms offered by remote licensees must adhere to a range of measures.
These include protecting the security of sensitive data (e.g. the credit card information, addresses, and authenticating information provided by players), the generation of acceptably random outcomes, the provision of information about rules, game descriptions and the likelihood of winning, and some measures designed to ensure responsible gambling such as financial and time limits, “reality checks” and “responsible product design” (the latter is not defined very clearly).
Operators must ensure that the products they offer have been tested by a Gambling Commission approved testing house before being released to the market. As of 1st September 2016, remote operators have also – finally - been required to monitor the performance of the games they offer, to ensure that the random number generator (RNG) driven products “are fair and achieving the designed return to player (RTP)”, including via reports and alerts if the games are over or under-paying.
This is a key step in ensuring that the licensed products are performing as expected outside lab conditions, although it is notable that it relies on self-regulation by the industry rather than a robust inspections regime. (Moreover, since the regulations state that the actual RTP should get closer to the theoretical RTP as turnover increases, they allow scope for new products to over or under-pay).
2 TV advertising and the rise of online gambling
According to a pro-gambling MP opposed to efforts to restrict TV advertising of sports betting, “of gambling adverts on TV in 2012, there were 532,000 for bingo…411,000 adverts for online casinos and poker; 355,000 for lotteries and scratchcards; and just 91,000 for sports betting” (Philip Davies HC Deb, 1 Apr 2014 : Column 742).
Yet according to 2015 figures from the Gambling Commission, of the £4.5billion generated in online gambling £2.6 billion came from casino games, £1.6 billion from betting, £152 million from betting exchanges, £153 million from bingo and £26 million from pool betting. Online slot machine style games generated £1.8billion.
Tax treatment of free plays
In 2016, the government scrapped a plan to tax free games in line with the approach used for free bets, after industry objections. The consultation received 14 responses, including 10 from businesses that were registered for remote gaming duty, and one from the main remote gaming industry representative body.
The responses focused on the fact that free plays are provided on the condition that customers play through their ‘winnings’ to a predetermined value or multiple before withdrawing money. The fact that players could play poker, and bingo, without any payment was also raised (p 5).
In other words, in the view of one of our UK interviews “it’s not real money”. However, free plays associated with sign up bonuses drive real profit, and we remain a little perplexed that the issue of fairer tax was dropped so quickly.
Technical consultation on the tax treatment of free plays in Remote Gaming Duty: Summary of Responses. HMRC. December 2016.