Ralph, it’s very brave & right of you to take this stance, which I would also agree with & totally support & hope others would follow (no doubt your comments are targeting both the City & wider audience interested in the gaming world). I’ve been a stern supporter of GamCare (www.GamCare.org.uk) since I started looking at the industry back in 2002 (for Camelot), who has one of the best code of conduct of the gambling industry we have seen worldwide (Ralph & WillHill has been a strong supporter/donor for Responsible Gambling Trust, but not on this years's list, yet..!? ) Therefore, no doubt this comment from Ralph is a very informed & considered one.
Raf's view is also valid as internet is evolving and in fact regulation might not help really given the speed it changes! And to be honest, there is already much ‘self-regulations’ within the internet world (there might be ‘self-imposed’ “eco-system” rules, like facebook, google, android, iTune, in terms of what can be promoted and developed etc.) However, we have seen how easily such rules can be changed based on public opinion or political pressure!
The reality is that like remote gaming/gambling 10-15years back, it was so new that people had no clue the likely effect the new category may have on
1.) Games design (proposition, what they might like/prefer etc. would customers even like it!)
2.) target audience (likely take up, behaviour, habit etc.) nor
3.) whether it would cannibalise their original offline businesses..
All those worry were unfounded, as we have since seen many multi-billion turnover operators.. but this iGaming industry is unique, with typical CPA as high as £100-£160 means that based on supply & demand, some might argue that such high cost was due to combination of high competitions and too many providers vs availability of gambling friendly target audiences. Therefore, if either of these are true, then the arrival and availability of new ‘social-gaming’ would thus be very attractive indeed!
One thing is for sure, that based on hard research, like UK prevalence studies, 2010, 2000 (on UK market, which some may say the most gambling friendly jurisdiction), shows that the amount of people that gamble has only grown limited (in 2010, around 75% but including mostly national lottery), and the number of people that suffer from 'problem' gambling is only less than 1% (of 62m residence in UK) and that is with great works of GamCare (gambleaware.org ) etc... with certifying on and offline casino gaming gambling operators.. however, given likes of Facebook now claiming to be now 900million users predicted to get to billion, if we have 0.01% of them that might be susceptible for problem ‘gaming’, this will indeed be a major worldwide challenge!
Therefore, as Ralph pointed out, if we suddenly use same products (for fun or for fee and/or something in between) and now target much wider audience, given the likely small minority of ‘problem gamers’, the number of people that might have problems could expand exponentially… !!!
Raf is right in saying that self-regulation works, which of course it would, if all are VC funded AND have a conscience and has a dedicated career like Raf for games & gaming… but sadly without regulations or at least some common ‘world’ standard to protect the potentially vulnerable, the potential return is just too attractive for unscrupulous operators in the wild wide west of internet.. thankfully we are talking about small amounts I hear Raf and others saying.. agreed but thankfully people talk (but maybe not enough in sometime) as in a marketing conference just couple of weeks back, a dad told me he had to punish his daughter as she lost (well paid £191.00) on iPhone’s app by buying accessories (not gambling app!)…
Same is therefore true for even non gaming application providers, thus, even Raf is doing the right thing means that others would still exploit the opportunities!
Regulations is the way to go I would hear Ralf and Jenny say, Gambling act 2005 is a world class legislation, sadly due to tax and other reasons we may have operations of major brands based here (some historic or offline reasons) but sadly now given the deregulations of US (!), rest of Europe, present & future gaming/ gambling operators have so many jurisdictional options to choose from that sadly even if UK lead from the front does means potentially unscrupulous operators could still claims they have a ‘license’.. what does the adults/teens of Indonesian or China, French or Spain knows the difference license from UK, Alderney to Antigua, or First Cagayan? Would they do a full research, especially for leisure pounds of social gaming to check the jurisdictional landscape!? Its great that the jurisdictions are working together in their working group towards common standard, but intrinsic nature of the market is that there will for sure be varying level of regulations..and the regulations could easily be changed, and domicile companies could also easily migrate in weeks.. remember the mass exodus of a jurisdiction (won’t name names) a few years back?
This is very close to heart of my company GamBond®’s ethos which is about bringing Global Trust & Confidence for any remotely trading industries (gaming included, but also any financial services from pension to banking)
Therefore, yes, regulation by all means, but industry self regulations would also need to be done, but real key is having the right products AND due to potential addictions problems (yes I am mentioning this!) It is paramount to put in the right process and monitoring to ensure the potentially vulnerable is protected like the industry leaders like Ralph is doing. Do refer to the GamCare code of conducts. You may say, that’s my personal opinion, Ralph, Jenny & I are not alone. See:
I quote below from an ‘games’ industry article that analysed reason for success of Zynga, from games industry website: Gamasutra, in the author’s own words:
“Zynga proudly states that they are an “an analytics company masquerading as a games company”. We see this a bit differently: Zynga is a gambling company masquerading as a new form of games company – and a wildly successful one at that. Their ability to leverage gambling mechanics has earned them over 200 million monthly active users, almost $1 billion in revenue in 2011, and a potential $15-20 billion valuation in their pending IPO.”
Ralph is definitely right, just see the final paragraph of the article:
“No matter the volume of Zynga Poker chips a player earns, or FarmVille resources a player accumulates, their real money has been exchanged for virtual currency, just like an other cash-for-goods transaction. The biggest thing that unequivocally separates social gaming from gambling is that the players have no ability to tangibly recoup the money put into the game. By giving players the ability to win back their investment of time and money in real-money rewards, that would quite literally be a game changer.”
Having had a search though, the author works for a converged gambling enabling platform provider for non gaming developers, which make sense given where he comes from.
Of course, a ‘well accepted’ non gambling market like Japan is a good ‘mirror’ of this situation, where players play Pachiko machines using balls, but the balls are supposed to be exchanged for gifts, right?
This however highlights that we really do need to address “the responsible social gaming” & regulation aspect (ideally on a co-ordinated worldwide basis), and help
1.) future users understand the differences
2.) operators to instil business processes to monitor and
3.) platform providers develop tools to help users and operators to prevent any potential financial & reputational tragedies (not only for individual operators but for the newly converged social gaming vertical)..
4.) Ultimately, enable individual players to monitor/limit their play on a pan industry level (good aim to have)
This is not scaremongering, but has already happened, we don’t need to look far, for non UK reader, you might not be aware of another converged ‘gaming’ opportunity back in 2006-2008.. namely “Call-in TV” [using technology from the multi-million/billion of premium rate sector (premium rate phone lines & premium rate SMS)]. There was also call for regulation; sadly it did not happen before the whole future of the industry collapsed, see this guardian piece of calling for regulation.
We had seen the launch, promised potential success and close down of ITV Play in just one year (the aftermath reputational challenge for the ITV brand was probably even worst!)… see ITV Play (wiki), result of the closing down of ITV Play (Guardian).
Therefore, I personally think Ralph is doing the right & honourable thing, no doubt Jenny & the gambling commission will doing the right thing also (although she can't be too strict & scared the present & future licensees' off!?) , challenge is hope other world leading regulators and gaming companies will follow suit.
Definitely must read piece from Ralph, do click through above link to read the full article, if you are too busy, below is the last paragraph, essence:
"So there you have it. The leading British gambling company has chosen to forgo a potentially lucrative business opportunity until appropriate regulation is in place. Why? Because we take the Gambling Act and our social responsibilities very seriously. We are well regulated and we have no problem with that. You can’t gamble in our Retail estate or on our websites unless you are over 18 and we have stringent policies in place to make this happen. I would certainly hope that John Penrose as the Minister charged with responsibility for protecting the vulnerable and Jenny Williams the CEO of the Gambling Commission are as resolute as we are at William Hill.
"
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