White Paper and White Labels: Regulatory consequences for affiliates

White Paper and White Labels: Regulatory consequences for affiliates

The proposals of the DCMS White Paper on the Gambling Act review are far from concrete, with a series of further consultations with relevant stakeholders scheduled, but change is on the horizon for the betting space, including for affiliates.

In the aftermath of the report, prominent betting and gaming affiliate firms Better Collective and QiH shared opinions on the White Paper, and made predictions for what could come next.

Better Collective – confident in the face of change

For Denmark-based affiliate network Better Collective, the White Paper has not come as a cause for concern, with the group projecting that the regulator reforms will have ‘zero impact’ on its operations or income.

On safer gambling, the firm has put faith in the credentials of its Mindway AI and RAiG holdings, whilst also noting that UK sportsbooks have ‘strengthened new compliance measures’ in the nearly two-and-a-half years since the review began.

This has of course included affordability checks, which Better Collective noted have ‘impacted’ the group’s sports win margin during that period. However, the firm added: “We have now seen a normalised sports win margin and do not expect for this to change given the proposed measures.”

Reiterating its safer gambling commitments, the group concluded: “In 2019, Better Collective entered into a partnership with its peers Spotlight Sports Group and Oddschecker to co-found the UK based trade association, Responsible Affiliates in Gambling (RAiG). 

“Through RAiG, an independent body set up to help raise standards in the sector, we promote socially responsible marketing of gambling products and a safer gambling environment for users. 

“Mindway AI specialises in supporting the gambling industry with various safer gambling tools and solutions. This supports our ambition to make betting safer and provides the sportsbooks with a chance to take initiative in developing sustainable gaming through Mindway AI tools and software, already in use by Tier 1 sportsbooks in the UK market.”

QiH – the bigger picture for affiliates

Commenting shortly after the review was revealed, James Walters, CEO of QiH Group, welcomed the government’s decision not to propose changes to regulations around white label arrangements.

“The government’s decision not to make changes to white labels arrangements is very welcome to those of us operating fully compliant white labels,” he said. “We do not operate under white label agreements because it allows us to circumvent licensing regulations. 

“We do so in order to leverage the first-class compliance capabilities of our white label providers and their competence in this regard is a primary reason we work with them. Regardless of who holds the actual Gambling Commission licence, any regulatory breaches by white label operators can be enforced by the regulator.”

He assessed that this is likely due to ‘few of the large financial penalties’ handed out over the past two years being levied against white labels, stating that the DCMS’ conclusions were ‘perhaps a recognition of this’.

Commenting for SBC in a follow-up, Walters offered some predictions as to what the White Paper could mean for affiliates, explaining: “In the short to medium term, for affiliates the introduction of compulsory financial risk checks might mean a pick-up in new FTDs delivered to operator partners.

“Though the white paper proposes these checks will be frictionless, in practice they might not be and there are also likely to be times when customers still need to provide documents or further information.”

Walters observed that several reports and surveys, such as one from Spotlight Sports Group (SSG) earlier this year, suggest that many customers may simply switch operators if asked to comply with affordability, essentially meaning more shopping around among bettors.

He added: “Longer term, things will probably even out because if all operators have to carry out such checks, then eventually all players will have to comply and will probably settle back into their previous betting patterns. 

“Overall, it should lead to a more sustainable market, which is something we support as our business is heavily focused on delivering sustainable players to our operator partners.”

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