According to Kindred's Q4 report, its share of revenue from problem gambling rose from 3.3% in Q3, to 4.0%.

Kindred’s Q4 Numbers Show Lack Of Progress Towards Zero Problem Gambling Goal

Sometimes taking the high road can make up for other shortcomings. Take Kindred Group, for instance.

Kindred, the Swedish-owned, Malta-headquartered gambling operator is big in Europe, less so in the US. It entered the U.S. sports betting market in 2018 with its flagship brand, Unibet. They first partnered in New Jersey with the Hard Rock Hotel & Casino Atlantic City. In 2019, they partnered with the Mohegan Sun Pocono in Pennsylvania.

The company has enjoyed limited success stateside, however, and has mostly remained quiet. What attention they’ve gained has been thanks mostly to self-promoting their efforts at responsible gambling (RG). Translation: they’ve been self-reporting on their efforts to get their gamblers to self-regulate.

The media has pretty much treated them with kid gloves for this apparent altruism. While these efforts have been admittedly earnest, they haven’t yet paid the dividends the company hoped for.

For the fourth quarter of 2021, Kindred’s quarterly earnings reported an increase in revenue from high-risk gamblers, from 3.3% to 4%. A bump like that raises all sorts of questions.

For instance, how realistic is Kindred’s stated goal of having zero revenue from problem gamblers by 2023? How many problem gamblers are actually out there? What constitutes harm and how do you measure it? And who’s most responsible for said harm?

“A lot of the operators are bringing in RG to help work through these issues,” says Jamie Salsburg, founder of the After Gambling podcast and blog. “But they’re never going to catch it all. And the pursuit to zero? The marketing part of me thinks they’re just setting themselves up for failure.”

Unibet seeks to do well by doing good

Compared to America’s Big Three operators — FanDuel, DraftKings, and BetMGM — Kindred has spent less on marketing and more on selflessness. Or at least on presenting the appearance of being as selfless as possible.

Kindred made its bold declaration two years ago. That’s when the company announced it was taking “the next step on the journey towards zero revenue from harmful gambling by 2023.”

“In a lot of ways,” says Salsburg, “the zero goal is just a kneejerk reaction to regulators and to critics.”

Other operators have made a show of their own RG efforts. Kindred just spins their RG more sincerely. More convincingly. Earlier this month, their Head of Responsible Gaming and Research, Maris Catania, explained that spike in harmful gambler revenue:

“The end of the year is always a more sensitive period for responsible gambling.”

Catania co-authored Kindred’s peer-reviewed October 2021 research paper that examined the application of criteria from the DSM-V.  This latest edition of the Diagnostic and Statistical Manual of Mental Disorders – the core text of the field of psychiatry – includes “Gambling Disorder” as a condition separate from other addictions.

Catania cowrote that study with her mentor, Mark Griffiths, a chartered psychologist and Distinguished Professor of Behavioural Addiction at Nottingham Trent University, and Director of the International Gaming Research Unit. This collaboration lends more gravitas to Kindred and their RG work.

Taking the measure of a gambling man

Internally, Kindred has applied the principles from the DSM and the Problem Gambling Severity Index (PGSI), and combined these with their own Player Safety Early Detection System (PS-EDS), as a way to spot harmful gamblers. These not only take into account financial data but “also behavioral indicators,” explains Catania, “to better detect harmful gambling in the online environment.”

Each quarter, the company, adds Catania, “measures the share of detected customers that show improvement after intervention,” and “the vast majority of people who received an intervention have changed their behavior for the better.”

Theory vs. practice

And therein lies the rub. Kim Lund, a gaming consultant with Infinite Edge, feels the approach warrants some criticism.

“They’re the ones defining their own metrics for what constitutes ‘revenue from at-risk players,’ and yet still not making much progress on their stated goal of getting that to zero,” he observes. “Trying to model an automatic problem gambling detection system on them is—on paper—a very good idea. In theory.

The question I’ve raised has basically to do with how well PS-EDS works. When outlets in our space report about this they just report whatever Kindred claims.

As long as these ‘RG-experts’ are incentivized to catch and stop at-risk players from playing, then this is a good idea. If they are effectively part of retention teams then it’s easy to see how the whole thing can easily be manufactured to work exactly as well as Kindred can afford it to.”

Even so, Lund remains a fan of the idea, just a cautious one.

“Kindred are doing this with the best of intentions. But the data that Kindred is sharing,” he says, referring to the 4% figure, “sounds too good to be true.”

The “artificial” part of artificial intelligence

Kindred, like most if not all operators trying to adhere to responsible gambling, rely largely on AI.

This in itself presents a kind of Catch-22. Algorithms on their own, without human supervision, can spit out bad results. At the same time, those providing the supervision can themselves be susceptible to bias, which isn’t great either.

The algorithm could end up missing people with less self-awareness, for whom intervention might be even more important.

A 2020 report from University of Nevada-Las Vegas researcher Qing Huan highlighted the effectiveness of machine learning in RG practices. Even so, Huang advocated for tighter regulation as an additional measure to protect players’ privacy and data.

Which is why most other operators have been making more of an effort in RG. As Fortune put it in a September 2021 story about Entain’s investment in AI:

“Entain hopes that by proving it cares about deterring problem gambling, the industry can avoid regulation that might crimp its growth.”

Who is being harmed, and how many?

Compounding all of this, there’s also the matter of numbers. Exactly how many people are problem gamblers? How many are “at risk”? And how does one define harm and pinpoint who exactly is being harmed?

An Australian study claims that between 0.5% and 1% of its 6.8 million gamblers have a gambling problem, but that equates to around 0.2% to 0.4% of the total population. One from Canada estimated that the country has 250,000 problem gamblers, or 0.7% of the national population.

In Ireland, a new study from the Health Research Board estimated the total number of problem gamblers at 12,000. That’s a little over 0.2%, in line with the Australian estimate. However, as OPR reported just a few weeks ago, Colin O’Gara of University College Dublin puts the total at 250,000, more than 20 times the Health Research Board’s figure.

Inconsistent definitions

The problem with comparing such figures is that there’s no standard methodology or metrics. That brings us back to Kindred’s numbers.

“If Kindred goes from 4% of revenue from problem gamblers to 2%,” says Lund, “they’ve probably made some kind of genuine improvement. But on its own, that 4% doesn’t mean very much, and you couldn’t just naively compare it to numbers from other sources to tell how bad or not the problem was to begin with.”

In addition to the confusion of numbers, there’s trying to nail down harm itself. Dollars lost by gamblers – or won by a site – aren’t an accurate measure of that.

“There’s harm we’re never going to be able to track,” points out Salsburg. “Not all harm is financial. There are many different types of harm. What are we measuring and what can we not measure? Almost every product or service does some kind of harm.”

Prof. Griffiths During a Kindred Q&A, Prof. Griffiths says that in order to limit harmful gambling “the behaviour has to be identified in the first place.”

These behaviors, then, would be the “markers” of harm or potential harm.

The journey is as important as the destination

Salsburg says that he considers Kindred’s “journey to zero” to be an unattainable goal.

“Really, it stands in the way of an honest conversation. It comes off as, ‘Hey, we’ll handle this all on our own.’ Instead of allowing us to take ownership of what we can do. Which would give us real progress. And it shouldn’t only fall on the operators. There are a lot of stakeholders involved.”

Catania also acknowledged the difficulties of actually getting the number to zero.

“We’re well aware that we’ve set an ambitious goal and that we still have a long way to go,” she said on Kindred’s blog. “But anything less would not make sense. We are committed to sharing knowledge with the general public, regulators, and other stakeholders to propel the discussion on how to create a more sustainable industry.”

Many of those stakeholders will surely be waiting with great interest to see what progress Kindred has made when the time comes for its next report.

- Devon is a freelance writer in Santa Fe, New Mexico. He has written for The New York Times, Outside, and Rolling Stone, and is the author of Conspiranoia!
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