The gaming industry has a unique opportunity to embrace sustainability and enhance its reputation as a socially responsible actor. By doing so, the industry can benefit from competing in regulated markets and transparent reporting procedures. Taking inspiration from the alcohol industry, which successfully embraced sustainability, gaming can adopt applicable United Nations Sustainable Development Goals and address responsible gambling. This will attract investors, analysts, and shareholders.
FiNTEL Sustain, a company formed by gaming industry advisers and researchers, evaluated and ranked 20 of the largest gaming companies in Europe and the US using a customized framework outlined in a white paper. This assessment provides a roadmap for financial optimization in the industry, allowing operating companies to develop their sustainability strategies.
FiNTEL Sustain incorporates operational and financial performance measures specific to regulated gaming. By using tailored metrics, the dataset created reflects industry peers and provides relevant information for companies, capital allocators, and regulators. The scoring methodology is based on publicly available data and includes factors such as compliance and financial performance, responsible gambling, executive and non-executive boards, regulatory performance, and asset performance and shareholder risk.
The analysis reveals that regulated operators with a significant land-based presence ranked higher due to structured and conscientious reporting compared to igaming-led companies. However, improvements are necessary industry-wide, including the streamlining of reporting and a unified approach to sustainability. Companies should focus on objectives that are easily interpreted and reported, enabling investors to assess sustainability performance.
All the companies evaluated showed reporting weaknesses and inconsistencies, emphasizing their strengths rather than addressing a broad spectrum of sustainability criteria. By improving reporting, including transparent measurement criteria and responsible gambling targets, companies can raise their sustainability ratings. Acquisitive igaming companies should also address risks associated with mergers and acquisitions and integrate sustainable practices.
By prioritizing sustainability reporting, the gaming industry can improve its overall performance and present a united front, attracting capital allocators and achieving financial benefits. This opportunity for growth and improvement should not be overshadowed by current challenges, but rather embraced through transparent reporting and a unified approach to sustainability.
Robert Montgomery of FiNTEL SUSTAIN and Steve Myers of Praxis Consulting and Advisory bring years of experience in the gaming industry and highlight the importance of sustainability and reputation in their work.
