Gambling and Big Data: A Safe Bet?

Marketing in 2014: every day, tracking software peers into consumers’ spending histories. Meanwhile, companies scour our personal information for any crumbs of data that might be used in the pursuit of a sale. This is ‘big data analysis:’ the Big Brother marketing strategy that has permanently altered the face of retail.

Now big data has come to the gambling industry. Big data sets provide online casinos and bookmakers with consumer insights of unprecedented sophistication, allowing companies to tailor the experience of users and even protect problem players (as they are keen to point out.)

However, the crazed scrabble for data has led gambling vendors to steamroller over data protection law in the pursuit of better market research, greater individual optimisation and improved player retention. The industry is gambling heavily on big data, but is it a bet worth taking?

Who Benefits from Big Data?

The benefits of big data strategizing to online gambling companies are obvious: better market research and a more individuated user experience are all serious boons to companies striving for improved retention and engagement. Psychologist and gambling industry expert Dr. Mark Griffiths describes how millions internet gamblers provide tracking data that allow online gaming vendors to develop extremely detailed models of consumer behaviour:

“Such data can tell online gambling companies exactly how online gamblers are spending their time in any given financial transaction (i.e., which games they are gambling on, for how long, how much money they are spending, etc.). The companies argue that this information can help in the retention of customers, and can also link up with existing customer databases and operating loyalty schemes.”

In effect, gaming companies can tailor their services to customers’ known interests – keeping them playing for longer and spending more. As Dr. Griffiths suggests, it is possible that “the online gaming companies know more about the gamblers’ playing behaviour than the gamblers themselves.”

In the most straightforward sense, big data insights allow companies to target players with “tailored freebies.” For example, a gambler who spends his Saturday playing blackjack might be offered a match deposit bonus on the Friday to pique his interest.

Dr. Griffiths actually praises the analysis of big data sets to protect players in the online sphere. He notes that behavioural tracking tools such as PlayScan and Observer “use a combination of behavioural science, psychology, mathematics, and artificial intelligence to detect players at risk of developing gambling problems.” If the software identifies a player’s behaviour as risky, the gambler in question is issued an advanced warning and can even have their automatically account closed should problem behaviour persist.

The future of player safety in land-based casinos may also soon be governed by big data insights. Wireless access points, security cameras and data capture software installed in slot machines form an arsenal of touchstones through which casino managers can soak up terabytes of data to shape the experience of customers. Rob James (CTO of the Star Casino in Sydney) speculates that an array of 3000 security cameras could eventually allow him to tack individual tables for customers’ betting habits, potentially allowing casino managers to curtail problem play. As James himself acknowledges; “If they [problem gamblers] come onto our property that is a breach of our [gaming] licence.”

Data Protection…What Data Protection?

Despite the gaming industry’s assurances that big data sets are utilised to improve user experience and protect problem players, it’s hard to shake the sense that big data strategies pose a serious threat to privacy. Simon Davis, writing for The Privacy Surgeon, offers a damning assessment of online gaming operators, whom he accuses of flagrantly ignoring data protection law in their pursuit of data insights.

As part of his investigation, Davis registered with a popular online gambling brand and later closed his account, requesting to have his personal information deleted. After much stalling, the casino ultimately refused to part with this valuable customer data, instead recommending that Davis ‘self-exclude’ from his account.

As Davis points out, most online operators are based in “economically opportunistic jurisdictions” such as Jersey, the Isle of Man, Antigua and Barbuda, Malta and Guernsey, where government interference and regulation are minimal. It seems that the estimated 35 to 70 million active online gamblers enjoy – at best – minimal data protection and absolutely no respect for privacy from operators.

All of this goes without addressing the ‘Big Brother’ overtones of consumer exploitation that can emerge from big data strategizing. For gambling companies, there is a palpable conflict on this issue, given that employing big data to protect vulnerable players is detrimental to bottom line business interests. Dr. Griffiths speculates that more unscrupulous operators will be able to identify problem gamblers through big data analysis and deliberately entice them with ‘free’ bets.

A Bet Worth Taking?

I’m more than a little weary of seeing the gambling sector held up for special scrutiny while other industries abuse big data insights unscathed. Ask yourself, have you ever tried to get your personal information expunged from an expired Audible or Amazon account? I assure you, it’s no easy feat.

However, this does not excuse our industry’s open disregard for data protection law, which threatens to reverse our tentative steps towards public acceptance and respectability in recent years. Casting a judgement on big data strategies wholesale would be a pointless exercise: love it or hate it, it’s here to stay. However, the onus is on gambling operators to wield our powerful new tools with caution and respect for consumer rights.

So, with our collective respectability at stake, is big data a safe bet for the gambling industry? We’ve already proved that we can utilise big data sets in ways that provide a better experience for players and protect at-risk individuals, so we certainly have the capacity to handle these insights responsibly. However, until better regulation is introduced to prevent player exploitation and operators agree to relinquish data in accordance with data protection law, we’re playing Russian roulette with the future of our sector.