Checkd views ‘bonus deflation’ as a welcomed dynamic

The aftermath of the UK Gambling Commission’s (UKGC) new rules on betting and gaming bonus promotions saw a flurry of reactions, with some industry stakeholders branding the regulatory changes as the end of cross-selling.

This is not the case however, and now that the dust has settled and people have had a bit more time to process and analyse the changes, the situation has become clearer to operators and affiliates alike – though of course many were already well aware of what the rules entailed.

Announced by the UKGC last week, there are two main rules on sign-up bonuses. Firstly, the UKGC has banned bonuses from requiring customers to use more than one product – place a sports bet and play a slot for example – and to spend more than 10 times the sign up bonus value before being able to withdraw.

This will of course have an impact on some firms, particularly smaller companies which lack the big marketing budgets of bet365, Flutter Entertainment, Entain or evoke. For firms more focused on sports betting though, the rules will not have much of an impact on customer outreach and may even pose an advantage.

“There has been a steady inflation of the value of sports betting sign up offers, largely through the addition of casino bonuses,” says James Prosser, Growth Director at Checkd Group.

“These UKGC changes will likely see the bonus situation revert to where it was a few years ago, but with a level playing field. So for a sports betting affiliate, I wouldn’t expect it to have a major influence on sign ups.

“I would, however, expect to see a decrease in the number of users cross-sold into casino who initially signed up for sports, as the bonuses were a key introductory method. This is in line with the UKGC’s aims, but we’ll only know if it’s been successful after we see the data.”

The delicate balances of player protection

The changes to betting bonus rules came about as the end result of one of the UKGC”s many, many consultations on the Gambling Act review White Paper.

The White Paper had made a number of recommendations, with clearing up operator’s use of bonuses a key measure – though as some have observed to SBC News, other recommendations have been far more significant.

Returning to the topic of cross-selling, the notion that cross-sell is being killed off is a bit of a native or knee jerk reaction to the bonus news. Nowhere in the UKGC’s statement does it say that cross-selling is being made illegal, it is simply bonuses that push cross-selling that are.

Another concern that has abounded though, and one which does have some validity behind it, is that customers will still be able to find black market promotions which push cross-selling, usually from betting to casino products.

A Google search will find some of these, with most of the unlicensed operators offering said bonuses unsurprisingly being crypto casinos. Some of the bonuses which can be found here are hard to describe as anything other than predatory, with some requiring customers to stake more than 200 times the provided bonus before withdrawals are possible.

“While there is a risk of players being more attracted to the black market – where they will retain the flexibility of bonuses – for our sports betting audiences this feels like a positive step for player protection,” Prosser added.

“Users can still find the casino if they wish to, but removing the upfront cross sell allows advertising affiliates to focus on sports betting.

“It will also decrease the length of significant T&Cs, which are increasingly becoming ridiculous and are so long that they are not of use to players.”

The times are a changin’ in UK gambling, and have been for some time, and licenced operators will have to contend with this. While this may be a tough adjustment for some, stakeholders seem to recognise that overall it will be positive for the industry, its sustainability and long-term image.

It is of course also understandable why some smaller companies might be concerned about the impact the bonus promotion rules may have on their bottom line.

However, it must also be said that in an industry as competitive and dynamic as this one, relying solely on bonus promotions for customer acquisition or retention was never a wise strategy to begin with.