Published 23rd April 2019
On 7 February, the Gambling Commission announced a consultation response on age and identity verification, which included making new age verification checks a prominent feature on UK licensed operators’ to-do lists.
Affiliates can be forgiven if this news went under their radar, given that it landed in the middle of a busy Thursday at the London Affiliate Conference. But with the short timelines involved, it’s essential to get up to speed with this change and what it could mean for your affiliate business.
In simple terms, operators will no longer have a 72-hour window in which to verify the age and ID of their new customers – they will need to do it before the customer is able to deposit.
Restrictions are also being introduced to free-play games; these too will require age verification as they are seen as an invitation to gamble. It’s a significant change for operators and, from the date of the announcement, they have just three months to become compliant. D-day is fast approaching, then, but what does this all mean for affiliates?
Impacts on conversion funnel
Affiliates and operators alike are justifiably focused on conversion rate optimisation – removing friction and fast-tracking the user to purchase in the pursuit of greater ROI. The GB Gambling Commission's changes place a potentially significant new hurdle into that conversion flow, which, depending on how seamlessly operators handle them, could result in a quite different-looking conversion pipeline.
Changes to the number of registrations
Now that free-play games at operator sites will be available exclusively to registered users who have verified their age, anyone looking to test out a demo slot or roulette table will first have to jump through extra hoops.
This could increase the quantity of registrations generated by operators as free-play offerings become the preserve of ‘customers’ rather than ‘browsers’. It will, however, likely reduce the total engagement with free-play games – yes, to under-18s as intended, but also to over-18s who aren’t necessarily willing to sign up and verify themselves.
On the other hand, a countering force on registration volume will be the lack of a ‘try before you buy’ hook, which will make operator sites less sticky to casual visitors and less effective at selling the merits of their respective game libraries. We reviewed 30 different operator sites listed on the slots section at TopRatedCasinos and 11 were still using free-play demos without registration as a prominent part of their UX.
The extent to which these two opposing forces balance out from an affiliate’s perspective will likely be driven by the nature of their traffic: conversion rates of traffic with lower real-money intent may feel an impact, while higher intent users ready to deposit may be less fussed about the lack of accessible free-play games and continue to enter the registration flow at good rates.
The exact nature of the age verification process is still to be determined, with the Gambling Commission thus far not giving specific guidance on how to implement. As a result, we can expect to see significant variation between operators, at least until methods become refined and standardised.
Changes in conversion from registration to deposit
Affiliates should expect to see their registration-deposit conversion rates drop, as the pool of registrants becomes diluted by free-players. Again, this is likely to apply more to lower intent affiliates than those with more of a real money focus.
Those with intent to gamble with real money may also reach the point of deposit at a lower rate, depending on how the operator implements the new checks.
One comment in the consultation response expected “seven-figure” losses as a result of newly created customer on-boarding friction, which may not be an exaggeration for the very largest of operators.
This effect may be compounded for affiliates who rely on customers with hard deadlines – sport being the obvious example. Again, depending on exactly how the age verification process looks, it may be tricky to claim a sign-up offer and lock in your bet five minutes before three o’clock on a Saturday afternoon.
Impacts on SEO free-play demand fulfilment
Google search volume data tells us that tens of thousands of UK casino players are looking for free/demo/practice versions of slots, roulette, blackjack and most other game types. This demand is often filled by affiliates – notably, NetEnt’s very own free-play affiliate product – and the underlying user search behaviour is unlikely to change any time soon. The question is, how will it be met?
The Gambling Commission consultation response is clear in stating that the new restrictions only apply within their remit, i.e. to licensees. The wording is slightly ambiguous though, restricting access to “any free-to-play versions of gambling games that the licensee may make available”. The provenance of the free-play games themselves may be taken into consideration as all demos of licensed games tend to be made available by a licensee to some extent.
If the interpretation is this broad, then we can expect free-play versions of popular casino games to disappear from affiliates too. Maybe they will be replaced with made-for-demo or social gaming experiences that bear no link to any licensee, thus cutting any ties to the Gambling Commission, which does not currently regulate affiliates.
An alternative would be for affiliates to create a kind of ‘light’ age verification/gating system, which would at least show a willingness to reduce exposure to under-18s. This could also be part of a customer retention and data marketing strategy by the affiliate, where demo-seekers, at the very least, are required to hand over their registration details (of course, ensuring GDPR compliance is maintained).
An additional benefit touted by the GB regulator of early age verification is that, when the time comes to withdraw, punters can look forward to a fast and smooth payment. The hoops have already been jumped through. This would undoubtedly be good for the user, as withdrawals are a common point of frustration.
However, the withdrawal process is unlikely to become totally pain-free from 7 May.
Enhanced due diligence (EDD), anti-money laundering (AML) and other checks are still required and will, in most cases, stand in between the player and withdrawing their bankroll.
The result could actually be increased stickiness and retention. This is because once a player is verified and ready to go, they may find new bookie offers less appealing, as they would need to verify age again before depositing. Friction could increase for new sign-ups but also remains on exit.
Additionally, some operators are expecting fraud savings to boost value, as player abuse is more effectively combatted from the very start.
Summary for affiliates
Affiliates who don’t host free-play games should keep a close eye on their conversion funnel after these changes come into force and get a clear understanding of how their operators will integrate age verification into their conversion flow.
Those who do will have more to think about: namely, how to ensure they can continue to satisfy searcher intent for demo content while also satisfying their operator partners and the Gambling Commission itself. Free-play affiliate strategy in the UK will certainly look different by the end of this year.
The UK’s regulatory pendulum continues to swing, but a changeable landscape often unearths new opportunities. Affiliates must keep a close eye out for them.