On one level, the rise and rise of Paddy Power is the stand-out Irish business story of the past three decades. A firm that came together in 1988 as an attempt to hold on to some of the Irish bookmaking market in the face of an English invasion is today the biggest gambling company in the world. Flutter Entertainment, as it is now known, is the largest company of any kind on the Irish stock market, valued at €30 billion. It has been a relentless, unfathomable success.
Yet as outlined in Punters, the terrific new book by journalist Aaron Rogan, it is also a faintly terrifying story of how modern business collects and uses personal data for profit. By brand, by lore, by public persona, Paddy Power is an entertainment product, to be enjoyed for knockabout fun as a side-order to whatever sport you’re watching. In reality, it is a ruthlessly efficient data-mining tool that knows who you are and what you are worth to them far better than you know yourself.
Rogan, it should be said, is no pearl-clutching anti-gambling prohibitionist. He has had an online account for longer than he’s been a journalist and enjoys – or not – a Saturday accumulator as much as most of us do. His work on the gambling industry, and Paddy Power in particular, has been a mainstay of first the Times Ireland edition and latterly the Sunday Business Post and saw him shortlisted for Business Journalist of the year in 2020.
“I was just always fascinated by them,” he says. “I would have gambled on football mainly since I was about 19 or 20. I grew up in Templeogue so I would have had a lot of friends who worked for Paddy Power because they were based in Tallaght and then Clonskeagh.
“So I was interested in them and when I did a few stories for the Times Ireland edition, people started getting in touch. They’d say they had left Paddy Power or they were thinking of leaving and, ‘Jesus, you wouldn’t believe half the stuff. If only you knew . . . ’
“So that was it, I wanted to find out how this company worked. Because as far as I knew, they had a mobile app, a load of betting shops and some funny ads that you saw everywhere. [Founder] Stewart Kenny would go on Seán O’Rourke around election time to talk about odds for this constituency or that. So they were very respected, even though their advertising was deliberately immature and laddish or whatever. Everything I learned about them made me want to learn more.”
And so the book is a deep, forensic history of the company. From the early days when Kenny and John Corcoran teamed up to fend off advances from Ladbrokes and Coral, through the guerrilla marketing of the fabled mischief department in the 1990s and 2000s, all the way up to the modern-day behemoth that has conquered not just Ireland but the UK and Australia and is primed to capitalise on the imminent gambling explosion in the USA. What it has gained along the way and what it has lost.
“Paddy Power was a real cult of a company,” Rogan says. “I mean that in a nice way. People absolutely loved working there. It seems like it was an absolutely smashing company to work for. It treated its staff well. Your ideas could actually be used no matter how junior you were in the company.
“It was innovative, it was clever and it was fun. I know people who worked in lesser roles in there who loved it because they could sit in front of Sky Sports all day. It was a way of working somewhere experiencing what you loved.
“Over time, it became so much more corporatised. I was trying to think of a comparison without sounding too grand or inflating them too much. But if you think of bookshops, which were local and homely and personal – eventually all that turned into Amazon. Everything was rationalised, every bit of fat was cut and so much became automated.
“Now you basically have an enormous data company with mathematicians and accountants running it. The personal touch is marketing and branding and that’s it. Maybe a bit in customer service but you’re not really able to speak to anyone. That means that there are so many degrees of separation between the company and people who might be having problems with them that it becomes ingrained into the business model.”
All the same, Paddy Power would be seen as a largely unqualified success story if they were selling, say, property or online payment systems. But because they are a gambling business and because we know more and more about gambling addiction with each passing year, the Paddy Power story always carries a cloud.
Various research papers have calculated that only around one per cent of customers in the gambling industry are addicts. But that one per cent is estimated to be responsible for somewhere in the region of 25 per cent of the industry’s profits. The level of misery and destruction living in that 25 per cent is a constant existential threat.
As one of the original founders, Kenny has made a splash in this newspaper and others in recent years decrying Paddy Power's role in first of all facilitating problem gamblers and, as time passed, not doing enough to protect them from themselves. In the book, Rogan writes about the Vanguard Project undertaken by the company in 2013, an attempt to use its enormous technological might to identify gambling addicts before they got themselves in too much trouble.
The company was already using teams of statisticians and analysts to discern patterns in how each of its customers gambled. They prided themselves on being able to tell after your first 15 bets, or your first €500, turned over how much they were likely to make out of you in the long run. They called this the Future Expected Margin (FEM) and they used it to nudge punters towards certain betting markets, including the lamentable online casino games.
There is a passage towards the end of the book that gets to the crux of what has always been a particularly knotty conundrum. Rogan quotes the British political adviser Dr James Noyes, who has worked with the Campaign For Fairer Gambling in the UK, on the subject of personal responsibility. Essentially, in the world of modern gambling, it’s a fiction.
It’s not that it doesn’t exist, clearly – nobody ultimately presses the button except the gamblers themselves. But when you consider the extent to which every online customer has been profiled, how thoroughly their data has been scraped and analysed, how ruthlessly they have been targeted, personal responsibility has patently been diluted to a huge extent.
So for all that, moves like the Vanguard Project may have their heart in the right place, ultimately it will take strict government legislation to force betting companies to forgo the easy profits of gambling addicts. Plenty of gamblers chafe against this idea, reasoning that they don’t need outsiders poking their nose into how they spend their money. Noyes argues that this already happens, covertly and deliberately.
“The Social Market Foundation think tank where Noyes now works has challenged the idea promoted by other groups that gambling is a free market activity that does not require extra levels of state intervention,” Rogan writes. “Noyes believes the use of data to power companies like Flutter has reduced their customers’ agency to the point where extra checks are needed.
“Libertarian accusations of intrusion do not hold water. Intrusion has already happened from the beginning of the customer journey. And operators, through internal systems of customer profiling and the sharing of these profiles with third parties . . . already capture from their customers a framework of affordability, which they can choose to apply either for the purpose of harm prevention or for commercial gain.”
In the coming years, this is going to be extremely difficult for Paddy Power and other firms in the betting industry to argue against. Data harvesting has been a huge game-changer, rocket-fuelling the growth of online betting and leading to gargantuan profits.
Rogan says there is an acceptance within the industry that they bear some responsibility for the dangers wrought by it. But only up to a point and not with any great enthusiasm. That has to change.
“Kenny and the other executives in Paddy Power at the time were supportive of Vanguard,” he says. “The had the view that if they have the best and brightest in Power Tower working on it, they could get somewhere. If they made the problem, they could solve the problem. But ultimately, once share prices and bonuses get affected, you will only go so far.
“If you have the data and the algorithms and the psychological tricks to nudge people around into different behaviours, you can’t then turn away and say, ‘It’s down to personal responsibility’. The tobacco analogy is one Stewart Kenny makes and it pisses people in the industry off in a major way.
“But it does seem to be that we’re at a point now where unless the industry really makes efforts to make the products less addictive, they will come to be thought of as a social ill. They will very quickly stop being thought of as a bit of fun. Cigarettes were fun and they were cool and then very quickly, you were a fool if you smoked.”
Paddy Power is some story. Plenty of chapters left in it, too.
Punters – How Paddy Power Bet Billions And Changed Gambling Forever by Aaron Rogan is published by Harper Collins and is in shops, online and audiobook now.
