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The National Council on Problem Gambling (NCPG) is hoping its new guidelines for payment processing will make an impact on online gambling.
A gambling transaction generally begins with a deposit or with the purchase of chips. It often ends with the player cashing out. The NCPG guidelines contain recommendations and specific action items related to harm reduction at those entry and exit points.
The NCPG is a non-profit organization, founded in 1972, with the mission of developing programs, services, and policies to reduce gambling-related harm. It has state-level affiliates in 35 states and its corporate and organizational members include most state lotteries and gambling regulators, as well as major land-based and online gambling operators in the US.
Money in and money out are perhaps the most easily traceable and quantifiable aspects of gambling. Those transactions have often been the subject of government scrutiny and legislation, such as the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.
However, payment processing involves many parties. At a minimum, there is the customer, the casino or online gambling provider, a financial institution, and the financial and gambling regulatory bodies. Quite often, especially for online gambling, there is also a third-party company involved in moving the money between the financial institution and the site.
When it comes to player protection, the number of parties involved in payment processing can lead to diffusion of responsibility. With this in mind, the NCPG’s guidelines stress the need for all parties involved to take a customer-centric approach and assume responsibility for harm minimization.
The NCPG’s Guidelines begin with a bullet-point list of seven action items, calling on all the above stakeholders to:
In its press release, the NCPG notes that many of these recommendations were first brought up in its Internet Responsible Gambling Standards, released in 2012. The new guidelines are narrower in scope, since they exclude what happens during the gambling session itself, yet also apply equally to land-based gambling as to online.
That’s an important point to note in light of the controversial new PlayOn devices appearing at land-based casinos around the country. These devices function almost like having an ATM directly at the casino table. They allow players to buy casino chips with funds from their bank account at a fee of $4 plus 2.5%. Daily limits for these devices are often with daily limits in the thousands of dollars, far more than can be withdrawn from an ATM.
The ease of redepositing in order to continue playing without stepping away from a session is a common criticism leveled at online gambling. Technology like PlayOn brings some of the convenience of online gambling to land-based casinos, but also some of the same problems. Coordination between those two branches of the industry will be important in harm-reduction efforts going forward.
The full text of the guidelines offers more detailed recommendations in five categories: Limits, Know Your Customer, Information, Self-Exclusion and Research.
Both the guidelines and 2012 gambling standards recommend that operators encourage players to set their own deposit limits. The option should be available to set such limits on a daily, weekly or monthly basis. Players should be able to reduce their own limits at any time. Raising those limits, the guidelines suggest, should require a cooling-off period of at least 24 hours. After that time, the player should be prompted to reconfirm the increased limit.
The NCPG claims that research shows that limits are more effective when set by users themselves, but this point is in dispute. The Finnish responsible gambling company Paf released research last year that would seem to contradict this. Paf found that for its slots players, self-imposed limits were a good predictor of problematic gambling behavior but not effective in reducing player losses.
The NCPG stresses the importance of operators incorporating payment processor data into their Know Your Customer efforts. Government regulations and anti-money laundering laws already require online operators to perform identity and age checks on their customers, but involving payment processors in the process can provide an additional layer of security.
It’s important for operators to have information on their customers. And yet, it’s equally important that transparency run in the opposite direction as well.
Some players make frequent deposits and withdrawals. Avoiding keeping a large balance on a site can be one way of reducing the temptation to gamble excessively. Moving money around on a regular basis, though can make it hard to track winnings and losses. Bonus offers can further confuse the issue.
The NCPG recommends that operators proactively keep players informed of their payment activity. It also asks them to alert their players of signs of problematic habits or risky behavior. They should also make it quick and easy for players to access information on their own activities, including all deposits and withdrawals, movement of funds between products, bonuses, and net winnings or losses over any specified period of time.
Operator-level self-exclusion registries are standard practice, and generally required by online gambling regulators, including legal US states. Most states with legal land-based gambling also have statewide self-exclusion registries. These allow individuals to bar themselves from access to brick and mortar casinos and card rooms in the state.
But making self-exclusion the operator’s responsibility for online gambling is an imperfect solution. Most states with legal online gambling have multiple operators. A player who has self-excluded from one can easily sign up with another to continue gambling. The NCPG recommends that players be given the option to self-exclude from particular payment types as an alternative to complete self-exclusion.
It also recommends that payment processors, credit card companies and financial institutions have their own self-exclusion programs. These can reduce the risk of problem gamblers simply switching sites to escape their self-imposed restrictions.
Last, but perhaps most importantly: the NCPG recommends operators share deposit and withdrawal data — in anonymized format — through the appropriate regulatory agency. It even recommends that regulators make sharing this data a condition of licensure.
That way, the data can be used by government and independent researchers to gain new insight into problem gambling behavior. Regulators can then use that research to ensure that any new payment processing method will not contribute to increased harm before issuing approval. This is important, as problem gambling is an under-studied and poorly understood phenomenon.
The expansion of legal online gambling in the US represents a new opportunity in that regard. It will make it easier to collect the necessary data to search for effective solutions to the problem.
The release of the new guidelines comes just weeks after the United Kingdom Gambling Commission (UKGC) announced a ban on the use of credit cards for all forms of online gambling other than the national lottery. The ban will come into effect on April 14. It’s estimated that 8% of UK gamblers use credit cards as a deposit method. In the US, that number may be as high as 15% to 20%.
The NCPG is not a legislative or regulatory body and has no authority to establish such a policy. Nor has it yet issued a recommendation to that effect. In the press release announcing its new guidelines, however, it did mention the UKGC decision explicitly and called upon the industry to “pay attention to potential negative outcomes” surrounding the use of credit cards for gambling, and work to prevent them.
Online gambling has been available for longer in Europe than it has been in the US. It’s natural that the NCPG is looking to UKGC decisions in formulating its own recommendations. Another front on which it may follow the latter’s lead is in social media advertising.
The UKGC recently teamed up with Twitter. Together, they issued guidance to concerned gamblers about how to limit the gambling-related messaging they receive. In the US, this could soon be a concern as well. Twitter allows the advertising of brick-and-mortar casinos, sports betting, fantasy sports and state lotteries in the US.
Google has also begun accepting ads for legal online gambling in four states. That being the case, the online advertising of gambling is likely to be a topic on the NCPG’s radar.