The gambling industry is using third-party companies to harvest people’s data, helping bookmakers and online casinos target people on low incomes and those who have stopped gambling, the Guardian can reveal.
Traditional online gambling ads have become more expensive, which has encouraged betting firms to resort to alternative means to hook consumers. This led to the increasing use of data analysis to win new customers, industry sources said.
“Third-party data providers allowed us to target their email lists with precision,” said a digital marketer who counted betting companies among his clients before leaving his agency last year. “Lower-income users were among the most successfully targeted segments.
“We could also combine segments, ie we could target users who are on less than £25k a year, own a credit card and have three kids, via these providers.”
So-called “data houses” collect information on age, income, debt, credit information and insurance details, which they pass to betting affiliates – companies that refer customers to online bookmakers for a fee. This helps the affiliates and the gambling firms tailor ads and target people based on what they earn.
The revelations will add to calls for tighter regulation of the gambling industry more action to address problem gambling after the news on Thursday that online betting firm 888 had been penalised a record £7.8m because more than 7,000 people who had voluntarily banned themselves from gambling were still able to access their accounts.
One customer was allowed to make 850,000 bets worth £1.3m in one year, using money stolen from their employer.
A second recent former employee of a digital marketing company said that possible gamblers’ data are often harvested by means that the gamblers themselves may not fully understand.
The data is often gathered from raffle sites that offer cash prizes and gifts in weekly giveaways, he said. To apply for the prize draws, users must usually provide their name, date of birth, email and address.
He claimed raffle companies would then sell the data, something customers have sometimes unwittingly consented to in lengthy terms and conditions agreements. One such site states: “The following sectors [including gambling] are the industry types you can expect to receive products, information, services or special offers from.”
Advertising companies can then identify members of target demographics – often made up of people in lower-earning brackets – among the raffle entrants and use credit information to reach them.
They also use a method called “dynamic retargeting” to single out people who may not have gambled for a while and try to entice them to pick up the habit again – potentially luring back recovering addicts who have self-banned from these sites, thus undermining industry schemes.
Those customers can be bombarded with sign-up ads that appear in their web browsers. In the first week, they can be offered a £10 free bet, the first industry source said, then £20 in week two, £30 in week three and so on. One source described these methods as “extremely effective”.
The advertisers would also sell on the data of lapsed players to other vendors for affiliate fees.
Betting affiliate programmes are schemes in which advertisers are paid a cost per acquisition and/or a lifetime revenue share percentage on the losses of each client they introduce. They are one of the gambling industry’s main sources of traffic. The fact that affiliates can never owe gaming sites money make the programmes risk free and potentially lucrative.
Some betting affiliates, masquerading as tipsters via Facebook groups, build up a following on social media before posting a sign-up link, connected to their affiliate ID, which ensures they earn from their followers’ losses once they purposefully recommend they gamble on bets that are likely to lose.
One regular gambler who responded to a Guardian callout said: “I fear that bookmakers are wilfully turning a blind eye to this practice and allowing such affiliates to promote their services in this manner.”
Carolyn Harris, the Labour MP for Swansea East who has campaigned on gambling reform, said she was unsurprised by the practices. “It just reaffirms my belief that the betting industry has no moral compass and are capable of exploiting the vulnerable in order to obtain the last pound out of them,” she said.
“We know this because nothing they do in terms of exclusion works and they are actively seeking out those who can least afford to be involved in gambling. I’m absolutely aghast that they use these hostile techniques in order to suck the life out of people. If we were to offer free cocaine to an addict, they’d find it very difficult to decline. The betting industry knows this and they are by token doing exactly the same thing.”
While affiliates and tipsters are not directly licensed by the GamblingCommission, online gambling firms face action if connected businesses go too far. A spokesman for the commission, said: “The UK gambling advertising rules are strict and require betting and gaming to be promoted in a responsible way, and place a particular emphasis on protecting young and vulnerable people.”
Clive Hawkswood, the chief executive of the Remote Gambling Association, said gambling operators should be aware that they could be held accountable for the actions of affiliates. “The affiliate sector itself needs to do more if it does not wish to attract a statutory licensing regime,” he said.