A ban on free spins and bets risks pushing the sector towards overregulation – Joonas Karhu
Joonas Karhu, CEO of Bojoko speaks to AGS News about why free bets and spins are such an important player engagement and conversion tool.
Why are free bets and free spins so important to operators, affiliates and ultimately players?
Free bets and free spins are a major factor for players when deciding which online sportsbooks and casinos to sign up to and play at. They allow players to try a brand without having to use any of their own money, and still potentially win. Although, as we all know, most “free” offers do come with terms and conditions such as wagering requirements. Ultimately, I think players like free bets and free spins because they feel like they are getting something back from the sportsbook or casino, too. For operators and affiliates, they are a powerful and effective marketing tool that can be used to great effect to engage players and convert them to players.
How do you use free bets and free spins to engage players and push them to your UK licensed operator partners?
Such is the popularity of free spins and free bets that we have created dedicated pages around these offers that we use to educate players as to how they work, the benefits they provide, and some of the things to look for when accepting free offers, etc. Just as on our main overview of casino bonuses, we include a list of the UK-licensed brands that offer free bets and free spins, as well as details about each offer including the terms and conditions they come with. We also make sure to include a section on responsible gambling so that players know how to enjoy free bets and free spins while staying in control of their play.
What do you make of the proposal to ban free bets and free spins as part of the UK government’s review of the 2005 Gambling Act?
It is quite concerning, not only for affiliates such as Bojoko but also for the UK-licensed online sportsbook and casino operators that we work with. While all stakeholders want to ensure that players are afforded the highest level of protection at all times, a ban on free bets and free spins risks pushing the sector towards overregulation. I also fear that it could have the opposite effect to that intended, with more players opting to switch to offshore sites where these offers are available but where there are little to no responsible gambling protocols in place.
It must be remembered that only 0.2% of the entire UK population is considered to be a risk of problem gambling, and there is absolutely no data out there that indicates there is a link between free bets and free spins and problem play.
What impact could this ban have on operators?
It is not illegal for UK players to wager on offshore sites (although it is illegal for unlicensed brands to target the market), so a ban on free bets and free spins could realistically see players move away from licensed sites to those that offer what they are looking for. A mass player exodus would likely make the UK market unviable for licensed operators, which in turn could see many hand-in their permits and leave the jurisdiction for good. This has already started to happen, with several big-name operators having exited the market over the past 12 months. This is reducing player choice, and that is never a good thing.
Of course, if operators see there is a bigger opportunity in running offshore sportsbooks and casinos in other markets, that is where they will likely invest their resources. Part of Adam Smith’s free market theory is that capital moves towards economically worthwhile investments.
What about affiliates?
Smith’s theory would also apply to affiliates, who may find that in order to meet the needs of their visitors and members they need to start promoting offshore sites, too. Affiliates do a tremendous job of ensuring players are channelled to licensed sites while also educating players on the importance of safe gaming and the tools available to them to help them stay in control of their play. But if it is no longer viable for affiliates to work with and promote UK-licensed online casino and sportsbook brands, it is not unreasonable to expect many to push players to offshore sites that can offer free bets and free spins as ultimately these sites will allow them to generate more revenue.
Are there any examples of markets where tighter restrictions have worked?
Not really. Lessons should be learned from markets such as Sweden where restrictions are even greater than in the UK. Operators can only offer one welcome bonus with no further bonuses or incentives allowed. This has led to relatively low channelisation rates for licensed operators. Indeed, a report published back in May suggests that if some restrictions were lifted, channelisation rates could jump from around 80% to 90% and generate an additional SEK1bn in tax revenue. Lawmakers in the UK really should consider this when it comes to deciding whether to ban free bets and free spins or not.
This is not a time for taking action simply for the sake of taking action. If the rules are tightened too much, then the player experience will be negatively impacted, and many will simply turn to the offshore sites that do offer what they are looking for. Of course, this would put them at far greater risk than they are now.
Join us in Belgrade, Serbia from the 22-25th August:
Renowned for its beautiful scenery, delicious cuisine, rich culture, and penchant for parties, the Balkans have been sought after by entrepreneurs with an eye on the growing iGaming ecosystem calling the region home. As the home to the global gaming community, the AGS Conference is known far and wide for its enlightening panels, inspiring speeches, ample opportunities to invest and network, and the ability to do it all while having the time of your life. Join us in Belgrade for the best the industry has to offer and for a window into the future of worldwide gambling. To learn more about sponsorship and speaking opportunities or to inquire about attending the event, please contact Sophie at [email protected]