The General Data Protection Regulation has affected iGaming companies like many other industries and has led to significant changes in data handling, marketing strategies, and compliance frameworks. Like any industry where business models are based on user info, iGaming has been more affected by the GDPR: data protection policies bring many challenges for casino and sportsbook operators. However, it is also possible to find some strategic opportunities, and operators who make the right decisions can gain a significant competitive advantage.
Understanding GDPR in the iGaming Context
The GDPR, which came into effect in 2018, was created to modernize privacy regulations that have failed to keep pace with a rapidly evolving technological age and contains extremely detailed rules on how personal information can be collected and processed. So, the impact of GDPR on iGaming is all about how operators collect, store, share, and use player data. Contrary to popular belief, these regulations don’t only affect EU companies: every business that serves an EU citizen (even offshore casino sites and sportsbooks) must comply, no matter where their servers are located.
iGaming needs user data more than many other industries. This is because personalization of the service can turn players into more loyal and longer-playing users. To this end:
- iGaming operators collect and analyze information about contact details, location, social media profiles, financial information, and behavioral patterns.
- As a result of these analyses, the gaming preferences and habits of the players on an individual level are identified.
- Based on these preferences and habits, the services to be offered to the player are determined.
- When a player logs in to the iGaming platform, they can see content that appeals to them.
For example, if you like online slots and play them regularly without going outside a certain betting range, the casino site you are a member of will show you more slot games, make sure that the min/max betting limits of these games fit your budget, and offer slot-specific bonuses.
However, to achieve this level of personalization, a lot of data needs to be collected and processed, and the GDPR has very strict rules on how this should be done. Let’s take a closer look at what has changed and how it affects iGaming operators and users.
What GDPR Changes
The General Data Protection Regulation places a lot of responsibility on iGaming operators regarding user information and requires them to change their services and options accordingly. In this context, although many things have changed, we can say that the most important ones are the following:
Consent Requirements
Before the GDPR, unless explicitly refused, the user was considered to have given consent to almost everything. So, for example, unless you contacted the operator and explicitly said, “I don’t want to subscribe to the newsletter”, you were automatically part of that marketing. Now, consent has to be freely given, and what is being consented to has to be clearly explained.
For example, when registering at an online casino, you are now asked to confirm in the registration form that you also consent to promotional communication. You can choose not to do this and still complete the registration. While this may seem like a simple change, it has a significant impact on operators’ marketing strategies and databases. First of all, these databases now need to be built, taking into account access requests, data portability, and deletion requests. This is because it is possible for a user to revoke consent, and this must be done without disrupting platform functions.
In other words, a single user’s data should be able to be isolated and deleted from millions of other information on demand while still complying with AML policies. This is technically extremely complex and forces online casinos and sportsbooks to build entire databases from scratch. This alone may require a site like vox kasyno to be almost completely redesigned.
Minimization
GDPR now forces operators to collect only minimal data. Normally, this is a data-hungry industry that even wants to know what you do at third-party websites: the more information they have access to, the more personalized the service can be. However, the GDPR severely limits the type and amount of info that can be collected, restricting it to only what is necessary to provide the service.
This affects the depth of player profiles that iGaming operators can create. Furthermore, data collection forms, account registration processes, and customer relationship management systems have to be designed from scratch. Each of these systems and processes has to be refined and modified to minimize the data collected.
GDPR also has many restrictions in terms of data retention periods. It is no longer possible to store collected information indefinitely. This is one of the biggest challenges for online casinos and sportsbooks. AML regulations force operators to store some data indefinitely, and operators serving multiple jurisdictions cannot develop a single standard policy due to different gambling regulations. This problem is being addressed with data protection rules based on the geographical location of users, but this is not a satisfactory solution.
Sharing
Most operators have to use digital marketing for new player acquisition. However, the GDPR has very restrictive rules on sharing user data with third parties, which makes digital marketing less effective than desired. Digital advertising ecosystems are huge and involve many actors (technology vendors, ad networks, affiliate partners, etc.). Each of them has its own processing policies, some of which may not be GDPR compliant. In such a case, excluding a particular actor from the ecosystem could cause the entire advertising chain to collapse or become much less effective.
Unfortunately, there is no clear solution to this problem either. An online casino or sportsbook cannot control every actor in the advertising ecosystem of which it is a part and be responsible for their actions. However, the GDPR chooses not to take this into account in any way and places all the responsibility on the operator. This alone limits the effectiveness of digital marketing projects of EU-based online casinos & sportsbooks and/or forces them to appeal only to EU citizens. Non-compliance fines can be surprisingly high. Potentially, each operator could have to pay a fine of up to 20% of its global annual turnover. That’s big enough to put small and medium-sized operators out of business, so no one wants to take the risk.
There Are Some Opportunities Too
GDPR also brings some opportunities. The “audience” is also no longer the same: players are much more privacy-conscious and know how important & valuable their personal data is nowadays. This can provide an opportunity for transparent and fully GDPR compliant operators to stand out from the crowd. In other words, being GDPR compliant can become a marketing strategy in itself. A new generation of casinos and sportsbooks with a modern infrastructure could gain a significant competitive advantage over operators with large but antiquated systems.
In any case, GDPR will not change and will remain a challenge for the iGaming industry. Operators that can adapt to it will survive and grow, while those that can’t will fade away, no matter how big or old they are. Therefore, seeing GDPR as a strategic opportunity rather than a “problem” may be the best thing to do for businesses in this industry.