A few bits of news have caught my eye this week, so this blog is just going to be a round-up. I’m not sure anyone minds or cares, but to me it feels like a lazy sitcom flashback episode.
Nonetheless, I’m not happy with any of the dedicated blogs I’ve got in my draft folder, so they’re going on the backburner while I darn an itchy patchwork quilt of gambling industry updates.
This week Flutter completed the takeover of mostly-bingo-but-also-slots brand Tombola for £402M. There is a lot of consolidation in the gambling industry, so I usually let it pass by without notice, but this is worthy of a mention because, historically, Tombola are one of the good guys.
They were the first UK operator to implement meaningful deposit limits (although they’re a little high for my taste), and they have resolutely stood by a policy of offering a low-stakes product.
They’ve worked hard to build a reputation as a sociable product and proudly promote their quirky chat hosts and customer support. In other words, their offering is not entirely based on the evil betting brothers of Excitement and Jackpots. They seem to understand that there is more to entertainment beyond quick cheap dopamine hits.
I also like that the company was born, raised and has stayed largely in Sunderland (although there is a presence in Gibraltar). That shows admirable commitment to their staff and the local community. All the more so because Sunderland is a sh#thole.
I’ll also give them some ReluctantGambler praise for innovation. I understand most of their products are developed in-house, so they must work hard to consistently develop and improve their offering.
I need to deduct some marks for their presence in the slots marketplace, where they’ve dubiously branded their offering as an “arcade”, but overall this appears to be an exceptional gambling business.
But that’s what worries me, because such businesses are increasingly rare in the gambling space.
As far as I can tell, Flutter have paid £1000 per head for 400K low-stakes active players, and they’re going to want to see a return on that quickly. The first way to recoup an investment is to cut costs, which usually means redundancies and relocations.
I had a good seat when that first started happening at PokerStars while they were on the path of being absorbed into Flutter, and it wasn’t pretty. Important and talented people were regularly culled to save money and whole departments were moved overseas. There is no room for sentiment when a PLC needs to pad their numbers come financial reporting time.
The other option is to quickly increase revenues. As it’s pretty challenging to conjure up customers from thin air, the quickest way to do that is to milk your current ones a bit harder. Grab a hold of the most swollen dangly bit and yank-squeaze like your livelihood depends on it.
Sometimes that’s tricky because if your CRM team is doing a good job, then you’re already maximising customer value. That’s lovely euphemistic business speak for milking until it’s tender-teat time (apologies for the graphic alliteration).
But in a company that is a low-stakes haven with restrictive net deposit limits, there’s an easy solution. Ditch the customer protections and put on your best milking gloves!
In my estimation, everything that made Tombola pretty admirable is now at grave risk. Let’s not forget that Flutter (despite occasional positive moves) are the company that recently sent promotional emails to their excluded problem gamblers – a debacle they were “urgently” investigating that has so far been swept under the carpet.
So prove me wrong Flutter. Do the right thing and preserve what is good about Tombola. I’ll be watching.
Entain CEO Talks Complete Rubbish
The Scandy lady in charge of Entain has bemoaned that the gambling industry is treated unfairly and they are, in fact, trusted entertainment providers. What an extraordinarily tone deaf and blatantly inaccurate claim.
As many as a million people in the UK have a gambling habit that affects the quality of their life. A further 55K are children who shouldn’t even be able to gamble.
Millions more of their loved ones are impacted by the damaging behaviour that Entain and their competitors deliberately and knowingly encourage.
Jette Nygaard-Andersen, your business and its industry may be broadly compliant on a set of horribly outdated regulations, but that does not make you trusted entertainment providers. You can, and must, do far better at protecting customers.
If you are so concerned with respect, how about paying back the £100M+ that Ladbrokes claimed in furlough payments despite no adverse effect on the business.
Until you are able to do basic things right, the gambling industry will suffer from a hard-earned and well-deserved bad reputation.
You can pay back your £46M furlough money too. Extra shame on you, Fred, because you’re privately held and don’t have to be manically focused on profit. You’re already stinking rich, the adult population of England shouldn’t all have to chip in a quid each just to boost your filthy coffers.
That will have to do for now. I was going to take an angry swing at the BGC, but I’ve already run long, so I’ll save it for another day.