Checks and balances
In an industry like ours where we’re dealing with an addictive product all the time, we are forced to challenge ourselves, says Alexandre Tomic, co-founder and CEO at Alea Gaming
Having fought addiction at certain points in my life, I know first-hand how important regulation can be, and how much of an effect it can have in protecting vulnerable people.
Years of fighting my own battle with addictive substances has given me the kind of insight one can only achieve from getting up close and personal with a problem, and this gives me the ability to empathise with and understand players’ point of view.
During those years of my life, the necessity of regulation really became clear to me. I was grateful to not have easy access to substances in the street – that the authorities protected addicts from further exposure, instead offering them resources like therapy and rehabilitation centres. With the help of this government-provided infrastructure, I was able to address and eventually overcome this problem in my life.
As casino operators, the fact that we deal with addiction gives us an important responsibility. Being face-to-face with it every day though, gives us another opportunity: the chance to recognise addiction’s purpose and beauty. In an industry like ours where we’re dealing with an addictive product all the time, we are forced to challenge ourselves. We must ask ourselves: should gambling really be offered to the public?
Personally, I think it should. We, the operators, are the ones who should be aware of the potential danger of the product, and most of us genuinely want to treat our players with respect, providing them with the safest gambling environment we can. This concept of responsibility and duty of care should lie at the very core of the industry. Players are not a commodity – we don’t take advantage of them. We respect them.
We are the only industry in which customers are paid. Customers buy services, but with players, who both give and receive money from us, it’s different. At the heart of this relationship, there is a device with an addictive nature, and that makes our players more than just customers. The relationship is not the same at all and, in the same way a patient is more than just a customer to a doctor, the distinction comes when the customer’s state of well-being becomes part of the dialogue.
Player safety features, such as lock-withdrawal and reality checks, need to be built into our platform
It is also worth considering that gambling, unlike other addictions, has no physical limitations when it comes to the human body. You can have addiction with or without a substance, and with gambling being the latter, we face an even more complex dynamic. After a certain amount of alcohol, for example, your body will say stop and refuse more; but as long as you have money, you will always be able to gamble, even if you need to engage in illegal activity to be able to fund it.
As we acknowledge this, a sense of awareness and consciousness should be brought back to players where depth of involvement is on their terms, while operators provide the support and resources in all steps of this journey. Player safety features, such as lock-withdrawal and reality checks, need to be built into our platform to make this awareness and support possible.
It’s also obvious that while responsible gambling is a priority, we are ultimately a business. This is why we need the regulator – its sole focus is player protection and it provides what we can’t: the ability to understand the particular responsible gaming needs of each specific country.
While the industry has moved forward on certain aspects like enforcement of Watershed rules, prohibiting bets placed from credit cards, and mandatory registration on GamStop for all UK casinos, there is still much to be done. Sublicensing, for example, is not sustainable and, if continued, it will inevitably create what we are trying to fight: irresponsible operators.
It’s not possible to be a responsible operator, conscious of the nature of your relationship with your players and your responsibility towards them, if you then provide the bones of a casino, including platform and licence, to people who lack the know-how required for this kind of endeavour.
Instead of doing what we did at ALEA, building a platform from the ground up, these operators take the easy route. They start with a business model valued at a certain amount in which venture capitalist investments are placed in exchange for a percentage of the company. Rather than building each department and acquiring the necessary licences and contracts, B2B suppliers provide the platform, managed services, and, most importantly, sublicense their gaming licenses. Since there is a finite amount of time to prove the performance of this model to current and prospective investors, it encourages hyperinflated player bonuses, exaggerated costs per acquisition paid to affiliates, and disproportionate employee salaries.
With each round of investments, the company’s GGR and value increase, but no true profit. This pattern continues for a couple more years with an Initial Public Offering as the final step. That’s plan A – when it works. If it doesn’t, which is often the case, they’ve burnt through the cash after one year, and the industry is left with an environment that breeds a lack of corporate social responsibility. Then, regulators begin to come down on operators who were not involved in this ‘race to the bottom’. How can a real casino be run with this kind of objective in mind? What kind of relationship with players can this hope to create?
In order to construct a sustainable industry, both the regulator and operator must render their reactive approach an archaic concept and move towards a more active culture, where a structure of checks and balances moves the industry forward at the consent of the player, operator, and regulator. The transition begins with regulators providing a foundation that responsible operators can thrive on; a framework where microcosms based on the ‘race to the bottom’ approach are no longer possible. Once we have this base, operators will reinforce this duty of care at every step of a player’s journey. Corporate social responsibility begins from the top, and when the regulator and operator acknowledge this, addiction is demystified and players are treated with the kindness we owe them.