With social responsibility seemingly the key talking point in the gambling world of late, Åland Islands-based firm Paf has made the decision to reduce its maximum yearly loss limit by €5,000.
The new lower loss limit, which will take effect on January 1, 2020 and will apply to all online players at Paf, has been set at €25,000, replacing the gaming operators previous maximum loss limit of €30,000.
Daniela Johansson, Paf deputy CEO and chief responsibility officer, discussed the reasoning behind Paf’s latest maximum yearly loss limit reduction: “We have followed closely how the situation has developed with our loss limit since last year, and the research on voluntary gaming limits from Stockholm University was the final tip of the scale we needed to toughen the loss limit.
“It is more about earning money in the long run and not in the short term”
“The conclusion for us is that a lower annual mandatory loss limit is good for our customers and it’s the most meaningful and valid thing we can do.”
This change, although positive in regards to safer and responsible gambling, will see Paf lose approximately two per cent of its annual revenue. This figure corresponds to an estimated €2m.
Discussing how the operator will mitigate the potential impacts from the loss in revenue, Johansson stated: “We believe that a sustainable level of gaming will keep our players playing with us for a long time to come and in that sense we will also have a long term income from them.
“So it is more about earning money in the long run and not in the short term. You will see this in our marketing communication as well since we don’t use high value short term bonuses, just to squeeze out as much as we can, as fast as we can.
“In the customer numbers we publicly shared, you can see that we have managed to gain a lot of new customers in our lower key segment and these customers will have the potential to even out the lost revenue from the big players.
“In comparison we gained 4 million in gross gaming surplus in the lower spending green segment from 2017 to 2018 and we can see that the positive trend continues throughout this year.”
“All of Paf’s profits go to the benefit of society”
The lost revenue which is discussed by Johansson is due to the fact that the sheer volume of ‘big players’ in Paf’s database has now dropped to 0.08 per cent. Paf’s Deputy CEO also added that she believes this number will drop further, but it is something which the firm has planned for.
“In 2020 this number will be down to 0 per cent. We have made a promise to stop all big players and we will. The money the gaming industry earns from this problematic segment is surely unsustainable and we will no longer accept it.
“So of course we will still go down in revenue since we still have some revenue left in this segment, but this has been a part of our prognosis for a long time already,” she added.
Despite these expected losses in revenue, Johansson previously stated that “All of Paf’s profits go to the benefit of society”. With further losses in revenue seemingly around the corner for the operator, she reiterated the impact that Paf has had outside of the gambling world: “We are proud to say that we have been able to distribute over €300m euro for the benefit of society, since Paf was founded in 1966.
“For instance we are very proud to mention the Save the Children organisation that is actually one of our founding member associations, likewise The Red Cross. Sports associations is another part of society that gets a lot of support from our revenue, €1.7m this year.
“In Sweden we also tried to push the government to implement a mandatory deposit limit”
“And just to mention a more specific example, Åland’s Sea Rescue Company, a voluntary coastguard organisation that help provide assistance and carry out sea rescue operations in the waters around Åland, is mostly financed by funds from Paf. They actually carry out around 100 assignments every year.”
With this change to its maximum yearly loss limit, Paf is hoping its decision will encourage others in the gaming industry to follow suit. The firm’s chief responsibility officer expanded on this idea, concluding: “We are not just showing off our fancy responsible gaming pages and trying to sound like we are the best at it. We actually do something for real and that we believe is the right way for the whole industry, and as such we try to lead by example.
“In Sweden we also tried to push the government to implement a mandatory deposit limit for all gaming companies in the new gaming law – but apparently they did not want to go as far as we did in the law.
“Then again, laws can be updated and surely changes will happen in Sweden when they evaluate the impact of the current law on the gaming market. In Latvia we have recently signed an agreement together with four other operators, to implement more responsible gaming tools than the market regulation requires.”