Paddy Power owner Flutter Entertainment is spending more than €100 million a year on safer gambling in Ireland and Britain as both jurisdictions move to tighter regulation of its industry.
Conor Grant, chief executive of the betting giant’s UK and Ireland division – which includes Paddy Power, Betfair, Sky Bet and bingo site, Tombola – calculates that it spent £48 million (€54.6 million) across the two countries in the first half of this year. In 2021, the total was £93 million.
“Yes, we’ve taken some pain,” he observes, “but we think that this is absolutely the right thing to do, and we think everyone else is going to have to do the same thing eventually”.
“It’s very simple for me, it’s about building a sustainable business. We don’t want customers for 10 minutes; we want them for 10 years,” Grant says. He argues that the vast majority of the group’s investors completely agree with its approach. “No one wants to benefit from others’ misfortune,” he says.
Regulation looks like it is finally coming to the Republic, which is significant for Flutter in particular. The global business has its headquarters here, alongside the betting shops and websites that operate in this jurisdiction. The Government recently named senior civil servant, Anne Marie Caulfield, as chief executive-designate of the Gambling Regulatory Authority of Ireland.
It is also due to publish legislation this autumn that will formally create the new body and – theoretically at least – modernise near-90-year-old laws governing betting in the Republic.
Aid problem gamblers
The authority will license betting businesses, including websites, bookie shops and casinos. It will have powers to sanction operators that break the law, including removing their licences, will oversee their advertising, require them to contribute to a fund to aid problem gamblers, give more general consumer protection and prevent fraud.
Flutter hopes the new body will be up and running next year, according to Grant, who says the group always favours regulation as it creates a level playing field for everyone. He maintains that the company has long wanted to see the regime here brought into the digital age.
“Ireland has lacked a regulatory framework. From our perspective, it’s now a case of let’s make sure that this is well-funded and well-resourced,” he says. However, he agrees that the Republic has tended not to provide statutory regulators with the resources they need and that there is a risk it will repeat the mistake here.
Stewart Kenny, a former chief executive and board member of Paddy Power, is less optimistic. He questions Caulfield’s appointment, not the senior civil servant’s ability or commitment, but because he feels the Government should have looked for someone with direct, international experience of dealing with the modern betting industry.
Kenny, who maintains that he made “huge mistakes” when pioneering digital betting while at Paddy Power’s helm, says the Government could have looked to Australia or other countries, where they have made strides in tackling problem gambling in the online era. He also argues that neither the Coalition nor James Browne, the Minister of State responsible for publishing the new legislation and creating the authority, seem very interested in either the issue itself or the new regulator.
“I have seen very little political interest in the issue,” he says. Kenny adds that Browne refused to meet him and Fintan Drury, a former Paddy Power chairman, even while the British authorities were very keen to do so.
There are moves to update British laws, now more than 15 years old, although a white paper due on the issue was shelved pending the outcome of the recent Conservative Party leadership election. Some reports have since questioned the commitment of eventual victor, new prime minister Liz Truss, to reviewing UK legislation.
Meanwhile, Flutter says it will continue to invest in its safer gambling division. That now employs about 230 people dealing with the Republic and UK, including 180 at the front line, 15 in strategy and 30 to 40 in compliance, technology and product development. The overall group maintains that it has made safer gambling central by including targets in the performance indicators that determine bonuses paid to workers, giving everyone an incentive to focus on it.
This year Flutter imposed a €500/£500 sterling a month deposit limit on all Irish and British customers aged under 25. It has a few reasons for this, including that a high proportion of them are still in college or education, and that younger people are more likely to take more risks. Customers can get this increased, but they need to contact the company and, among other things, show they can afford a higher limit.
Flutter also bars customers in the Republic from using credit cards to bet, replicating a UK statutory ban.
Flutter says preventing harm is central to what the division does. Its main digital alert system, known as action centre, is designed to pick up on 270 separate “triggers” indicating that an individual customer may be on the road to developing a problem. This is based on the group’s experience with those who have voluntarily excluded themselves in the past.
At heart, what the system has done is take all the data from those accounts, analysed their various patterns of behaviour and sifted them for signs that a customer is at risk. Flutter just updated to the latest version of this “action centre” this week.
The triggers are not just increased losses, bets or deposits, they take behavioural changes into account – how long the person has been a customer and thus how “familiar” the system is with that person, or even whether a consistent “safe” pattern of betting can build towards risky behaviour in the future.
Action centre
So, if someone who regularly bets on football on Saturday afternoons suddenly starts playing blackjack or roulette in the small hours of the morning, action centre will highlight this, even if their losses are small. Flutter staff have intervened where someone has lost less than €10, but their betting pattern triggered the system. Similarly, it will pick up on increased deposits or whether someone starts betting more frequently than before, or if they have needed some form of intervention in the past.
Action centre will generate a report and highlight if someone needs direct contact from one of Flutter’s frontline staff. Once that happens, the system will contact the individual telling them to expect a call and it will impose a mandatory deposit limit on the account. That cannot be lifted until the customer has spoken to someone, and that person has reported on the conversation and what action is recommended.
Staff who make the calls are trained to ask open-ended questions designed to elicit information on, among other relevant things, the incident that triggered action centre, the individual’s view or state of mind at the time, and on their betting behaviour. The company maintains that clients mostly react positively to contacts.
Broadly, action centre highlighted about 100,000 customers in the first half of this year; of these 48,000 were deemed to require contact. About half of those contacts resulted in the company moving to end risky behaviour. This included agreeing or imposing deposit limits, full exclusion from Flutter’s sites, or partial exclusions, where the person agrees they should be barred from using a particular section of the site, for example the casino, but allowed access to others, or time out from betting.
Paddy Power betting shops, along with all bookies in the Republic, do not accept credit cards. They also operate a self-exclusion system, another industry-wide initiative, where customers can ask that staff no longer accept their bets.
Barry Grant of counselling and treatment specialists, Extern Gambling, acknowledges that Flutter is one of the “better companies” when it comes to anticipating and dealing with risky behaviour. He also describes the self-exclusion system in betting shops as “really useful”.
Nevertheless, he points out that his organisation has clients who have bet for 24 or 48 hours on websites operated by all gaming businesses active in the Republic. Grant says he does not want to single out any particular company, but maintains that Flutter’s brands are in the mix for this, along with those of its rivals. “They all could be doing a lot more,” he argues.
He maintains that he has seen data showing that people could bet on sites available in the Republic for 48 hours. Grant recently saw a system in Norway where punters had to take regular breaks from betting, something he says could be applied here.
Kenny argues that online casino betting, which includes roulette, slot machine-type games and blackjack is the problem. That is mostly down to the speed at which they move, allowing punters to repeat bets in as little as 20 seconds.
He, too, agrees that Flutter is ahead of the pack when it comes to safer gambling. He singles out the €500 monthly limit for under-25s as a progressive move. However, he argues that it is in some ways unfair to place the burden for managing all of this on the companies themselves.
“It’s the Government that should regulate at the end of the day,” Kenny says.
