A number of services, including marketing and payment services, are used by gambling operators to encourage or facilitate on-line gambling. Some of these services are subject to secondary legislation.
Promotion of on-line gambling – Commercial Communications
On-line service providers use commercial communications to promote their services, related products and image to final consumers and/or distributors. The Commission understands that the following commercial communications are the most frequently used:
(1) TV advertising;
(2) Printed press advertising;
(3) On-line commercial communications;
(4) Sales promotions;
(5) Direct marketing (which includes direct mail, primarily by e-mails and sms to registered customers, for example personal follow-up contacts); and
(6) Sponsorship agreements.
The Commission is aware that, in many Member States, there are restrictions on such commercial communications ranging from prohibitions to content requirements on media advertising of on-line gambling services. Whereas the Commission welcomes comments on such restrictions it wishes to focus its consultation on certain forms of commercial communications.
On-line commercial communications
On-line banners and pop-ups on non-gambling sites are two forms of internet advertising intended to redirect traffic to on-line gambling services. They therefore appear on nongambling information society services. They do not fall under the scope of the E-commerce directive but fall within the scope of the Unfair Commercial Practices Directive and, in so far as the use of on-line commercial communications includes the collection and processing of personal data, the Data Protection Directive 95/46/EC and E-Privacy Directive 2002/58/EC.
Sales promotions cover discounts of all forms; premium offers, free gifts, promotional contests and promotional games. They are an important multi-faceted tool that can be adjusted to various circumstances: to enter into markets with innovative products; to encourage customer loyalty; to stimulate short-term competitive actions; or to rapidly respond to lost sales. One of the most common types of sales promotions are the use and communication of registration and deposit bonuses, i.e. where on opening a player’s account a sum of money is paid or extra funds are added to deposits made by an already registered customer.
Sales promotions relating to on-line gambling services are regulated by the Unfair Commercial Practices Directive as well as Data Protection Directive and E-Privacy Directive 2002/58/EC.
All on-line gambling operators use direct marketing strategies (via mail, telephone, Internet and direct response) as they are considered an essential tool for companies to approach, inform and retain customers, as well as providing customer after-sales services. These are regulated by the Distance Selling Directive, the Unfair Commercial Practices Directive, Data Protection Directive 95/46/EC and the E-privacy Directive 2002/58/EC. Such direct marketing may include player-to-player marketing and could be combined with sales promotions.
Sponsorship means any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor’s image, brands, goods or services and a sponsorship property in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits (ICC International Code on Sponsorship (2003)). Sponsorship is central to on-line gambling service providers’ marketing mix whether they are national lotteries or commercial operators.
On-line payment services, pay-outs and customer identification
Since truly effective distance micro-payment services are not yet available, on-line gambling operators typically require their customers to deposit funds on player accounts before playing. Deposits can be made by credit cards, e-Wallets, bank transfers, pre-paid cards or cash transfers.
- Payment method : Estimated percentage (European Commission estimates based on information from operators that accept deposits from customers who are resident in another Member State (February 2010))
- Credit cards (including Maestro) : 64-65%
- E-wallets : 12-14 %
- Bank transfers : 11-13%
- Prepaid cards : 9-11%
Additional limits are typically set by on-line gambling operators, such as on deposit and withdrawal levels from the player’s account. Limits on withdrawals range from a fixed limit to the requirement for the player to contact a bank in person to withdraw larger sums from the player’s account.
Certain operators require that the same payment method is used for both deposits and withdrawals of funds (a so-called “closed” system).
Gambling services offered over mobile telephony or IPTV will also include transmission charges linked to invoices for telephony services.
Customer identification is necessary for, in particular the protection of minors, fraud prevention, “know-your-customer” controls and prevention of money laundering. Customer identification may raise specific Internal Market problems when the service provider and customer are at different locations and also because of the current lack of mutual recognition of electronic identification and authentication across the EU. In contrast, bricks-and-mortar establishments that offer games of chance will have the possibility to obtain an identity card and carry out a face-to-face recognition at the gambling venue.
Today, on-line gambling service providers’ customer identification is based on:
– Previous identifications carried out by payment service providers, as most of the payment options require that the customer has a bank account;
– Own controls in view of information and documents requested from the potential customer; and
– Controls by verification service providers subject to compliance with obligations laid down by EU data protection law.
Mystery shopping exercises of licensed operators suggest that there are very few weaknesses that could allow for under aged persons to gamble and withdraw winnings (The UK Gambling Commission conducts a rolling programme of mystery shopping on gambling websites as part of its compliance activity_. Age verification takes place before the new customer can start playing. It has been suggested that additional pay-out age verification could work as a further deterrent to minors and adolescents seeking to register.
© European Union