ESG Principles: Socially Responsible Gambling Project

“Ecology, society, and governance” is one of the macro-trends that will remain relevant in the next decade. It is followed by many sectors of the economy, including the entertainment industry.

Experts of the Rosloto studio explain why operators implement such practices in their work and what benefits they derive from this.

“S” in the Sustainable Development System

The concept dates back to the 60s of the last century. At that time, leading financial organisations first began to use such a criterion for the qualitative evaluation of objects where it is possible to put capital.

The comprehensive ESG term appeared much later. In 2005, UN Chairman Kofi Annan announced 15 initiatives and urged the world's leading economies to adhere to them.

The first principles raised the following issues:

• global warming;
• growing energy consumption;
• increased levels of waste;
• pollution, and other factors that negatively affect the surroundings.

Later, social initiatives were added to environmental standards. Their implementation is a step towards poverty and hunger eradication, reduction of inequality, good education, sound health, and well-being.

The ESG phenomenon has become popular only in recent years. If a decade ago it was an innovation, then today, it is a mandatory requirement for many firms. The system is applied in almost all sectors of the economy, and the casino industry is no exception.

Social Factor in ESG Ratings

The implementation of the described principles is appreciated by investors, B2B partners, the government, and customers. Based on the received and processed data, an assessment of the entertainment firm is formed.

The operator’s social policy can be divided into 5 groups:

1. Society. These are investments in the expansion of the presence, support for charitable events, non-profit foundations, volunteer organisations, and interaction with the local population.
2. Social capital. The use of a system that guarantees personnel development, training valuable staff, reducing turnover, and building labour infrastructure. Support for equality and a zero gender wage gap are popular ESG initiatives.
3. Human rights. This is the absence of discrimination, the creation of inclusive jobs, and privacy. Operators can support migrant workers by offering them special programs to facilitate the adaptation.
4. Clients. It is important to implement responsible gambling mechanisms, such as age verification, restrictions on the duration of sessions, and setting limits on the size of bids. The protection of client data also relates to ESG initiatives.
5. B2B partners. In this case, the company's business ethics, the presence of feedback mechanisms, customer satisfaction, and other factors are assessed.

After analysing the brand’s social policy, it is assigned a rating score, which becomes part of the overall ESG evaluation of the enterprise.

GRI is the most common standard for checking the sustainable growth of a gambling firm. This is a set of guidelines for preparing non-financial reports. They also disclose information about risk factors in the selected operating market.

ISO 26000 is an international manual on social responsibility. The document defines how organisations should interact with partners and fulfil their obligations to customers.

MSCI, S&P Global, FTSE Russell, and other companies regularly publish ratings for various ESG categories so that sponsors can choose the most suitable practices.

Advantages of Implementing ESG Initiatives

Let us consider why entertainment firms should pay attention to this aspect:

1. Improvement of business reputation. Compliance with such rules has a positive effect on the provider's image and allows entrepreneurs to build and strengthen trusting relationships with players, B2B partners and regulators.
2. Attraction of capitals. Commitment to social initiatives is an additional advantage over banks, private investors, financial institutions, and other creditors.
3. High-quality risk management. ESG reporting helps identify and evaluate threats associated with excessive staff turnover, leaks of confidential data, betting by minors, etc.
4. Compliance with industry requirements. Support for responsible gambling is a prerequisite for all legal operators and an important element of the overall ESG strategy.

It is worth noting that the implementation of such practices in gambling is much simpler and faster compared to other sectors of the economy.

The casino and sportsbook industry is considered socially sustainable by default, including due to strict regulation. Protection of the client’s interests, the implementation of the mechanisms of responsible wagering, honest advertising, etc.

The adoption of the described standards in the entertainment sector affects the formation of positive public opinion. Therefore, it is important for operators to promote social initiatives and notify others about them.

ESG Principles in Regulation

In 2023, the Malta Gaming Authority (MGA) began work on a voluntary Code of Good Practice. It is addressed to business owners certified by the Commission.

The document was developed in 4 stages:

• expert evaluation and research;
• materiality assessment;
• interviews with stakeholders;
• consultations with licensees.

The Code includes 19 topics and offers 2 levels of reporting (basic and thorough). Those entrepreneurs who adhere to it will receive the MGA ESG quality mark.

The American Gambling Association (AGA) also remains committed to sustainability. In 2024, it conducted the first-ever industry-specific assessment of community member incentives and investments related to ESG issues.

The organisation’s social policy is defined by:

• support for the diversity of race, gender, and ethnicity in the board of directors and management;
• provision of equal access to career opportunities for all employees;
• creation of jobs and assistance in the development of local businesses;
• ensuring educational scholarships and mentoring;
• staff training on compliance with responsible gaming principles and fight against ludomania;
• investment into charity projects and social partnerships in the US and all over the world.

Companies-members of AGA include Aristocrat, Kambi, DraftKings, and other well-known brands, for example, such international certification centres as GLI and BMM Testlabs.

Social Sustainability Exemplified by Casino Firms

Let us consider how leading software vendors and equipment suppliers follow the principle.

Aristocrat

It has signed several partnership agreements to finance non-profit organisations, including the Gambling Treatment and Research Clinic at the University of Sydney. The firm provides medical assistance to people with signs of ludomania and also studies the spread of this disease among different segments of the population.

In 2023, Monash University awarded the manufacturer the highest grade for its work on combating modern-day slavery.

Aristocrat has created a global supply chain. It includes more than 100 direct providers in 25 countries. In this regard, the company launched a pilot contract audit program. It is aimed at ensuring that partners do not use slave labour or involve minors in the production.

At the end of 2023, the enterprise held the first ESG Day event for institutional investors.

Light & Wonder

At the beginning of the year, the brand presented a five-year ESG roadmap called Game Changers. It reflects the vendor’s core values ​​​​in the system of sustainable development.

The main initiatives of the firm:

• Crisis notification option. With its help, customers and hired employees can quickly report hazards that could lead to injuries or accidents.
• Volunteering. In 2023, Light & Wonder specialists spent 18,000 hours participating in 200 non-profit organisations all over the globe. The provider also supported world cleanup, in which more than 350 firm’s staff took part.
• Charity. Last year, the enterprise transferred $1.3 billion in charitable contributions.

Flutter Entertainment

In 2022, the vendor presented the Positive Impact Plan, thus determining a clear agenda for sustainable progress.

Key goals of the ESG program:

• Gender equality. It is expected that by 2026, 40% of the firm’s management positions will be occupied by women. By the end of 2023, this figure was 35.7%, taking into account the head office in the United States and other divisions.
• Community support. By 2030, the provider hopes to improve the lives of 10 million people. Last year, the company donated $10.3 million to the needs of low-income and socially vulnerable people.
• Popularisation of responsible gambling. Flutter Entertainment released a branded Play Well application with limits on the size of bets, control over the speed of spins, and other mechanisms.

Playtech

It is a leader in the implementation of ESG in the casino and sportsbook industry.

The proprietary initiative Playtech Protect includes cutting-edge technologies aimed at following the principles of a sensible attitude toward the placement of bids:

• The BetBuddy program. This is an AI-powered solution that uses behavioural monitoring and predictive risk modelling to detect problematic clients as soon as possible.
• Safe gambling research. The company conducted a comprehensive analysis of how wagering limits, automatic spins, bonus offers, and other factors affect customers.
• Content certification. In 2021, Playtech became the first to receive the GamCare B2B Safer Gambling Standard certificate.
• Speak Up hotline. With its help, employees can confidentially and anonymously report their concerns and difficulties in the workplace.
• Competent personnel policy. The provider offers health and well-being programs, mentoring, and individual training plans for valuable staff.
• Gender equality. 30% of Playtech's executive team is women. By 2030, the brand plans to increase this figure to 50%.
• Charity. In 2020, the firm teamed up with the Charities Aid Foundation (CAF) to launch the COVID-19 Recovery Fund. The donation reached £3 million.

The Main Things about Social Initiatives in Gambling

Adherence to such principles is the key to the sustainable development of entertainment platforms.

Key aspects that operators need to take into account:

• The social policy of entrepreneurs is determined by several criteria. This is an investment in human and labour capital, public support, the introduction of responsible gambling mechanisms, and the adoption of business ethics.
• Using these practices results in the increased recognition of brands, improved image indicators, and more effective risk management. The solution helps project owners meet all requirements.
• Leading iGaming sites have already presented their initiatives in the field of sustainable development. These are Aristocrat, Playtech, Light & Wonder, and many others.

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