SBC News David Clifton: Licensing Expert – Change will come...eventually

David Clifton: Licensing Expert – Change will come…eventually

SBC News David Clifton: Licensing Expert – Change will come...eventually
David Clifton

I suspect there are few people who have never faced the morning, thinking ‘last night I drank far too much’… Fortunately, a dawn conclusion of this nature does not usually call for a letter of apology to the Prime Minister.

However – and I am ‘groping’ for the correct words here – recent incidents have proved that in certain circumstances a previous night’s inebriated misbehaviour can most certainly necessitate the sending of such a letter.

I’m fairly sure that a PM’s dithering response to such a letter has never previously whipped up such a political storm, precipitating the resignation of 56 UK Government Ministers (including the Minister with responsibility for gambling reform) and leading to the PM’s resignation from leadership of his political party.

I know for certain that never before has a combination of such circumstances conspired to bring about well-informed reports that publication of a long-awaited Government White Paper on gambling reforms will have to wait even longer until after a new Prime Minister has been appointed.

However, that’s what has happened. As I write this, DCMS has told The Racing Post that it still plans to publish the White Paper ‘as soon as possible’, but the former Gambling Minister Chris Philp appears to have confirmed there will be a further delay, having been quoted in the MailOnline as saying: “I’m gutted there’s further delay, and strongly urge the new government to make it a priority at the beginning of September.”

Time will tell whether the newly appointed Gambling Minister, Damian Collins, will take a different view than his predecessor. The draft White Paper that, prior to his departure from office, Philp had deposited at Number 10, Downing Street was fully expected to reflect a crackdown on the online gambling sector in particular. His 7th July letter of resignation confirmed that it contained “strong measures to protect people from the ravages of gambling addiction”. Leaving no sliver of doubt where his sympathies lay, he added: “I have met with the families of those who have committed suicide as a result of gambling addiction, and I strongly urge you to deliver the review in full and undiluted”.

Firm clues on the content of the White Paper have been dropped for a number of months now. I focused on some of these in my previous ‘Licensing Expert’ articles for SBC News entitled All eyes focused on gambling’s A-factor and, before that, Musings on a pending White Paper’. Others followed, with media speculation reaching a particular peak at the end of June

The Gambling Commission has done its part too in bringing about change. Its updated Licensing, Compliance & Enforcement Policy came into immediate effect on 23rd June as it published its consultation response on that same subject. This was followed by its announcement about forthcoming changes to the way licensing works’.

In addition, clear indications of the regulator’s ambitions on the way ahead have been shared by its Chair, Marcus Boyle, in a Times Op-Ed piece entitled Gambling needs better regulation, and this is how we will do it’. This was followed by forward-looking speeches from its CEO Andrew Rhodes at the Westminster Media Forum ‘Next Steps for Gambling Regulation’ conference and its Executive Director Tim Miller at the CMS Conference on 6 July.

However, probably more revealingly but I imagine less intentionally, Andrew Rhodes was pressurised into answering some challenging questions posed by the DCMS Committee during an oral evidence session in its ‘What next for the National Lottery?’ Inquiry held on 30th June. It was not so much the questions directly related to that subject-matter that presented a challenge for him, but more a series of unexpected questions relating to the vexed issue of affordability checks that caused a problem for him.

Asked why the Commission has not released its response to that part of its November 2020 Consultation and Call for Evidence on remote customer interaction requirements and guidance relating to its controversial proposal that remote gambling operators should “conduct defined affordability assessments at thresholds set by the Commission”, Rhodes answered: “We have agreed with DCMS that the issues around affordability checks are something for the White Paper”.

That found no favour with the Committee’s Chairman (Julian Knight MP) who responded: “It does seem to be very strange that you should announce a consultation in November 2020 on such an important area, which frankly does need scrutiny more widely than just DCMS and the Department, and that was not released publicly. I thought that would be of interest to parliamentarians, rather than for it just to be handed covertly to officials at DCMS. That seems a very strange approach and lacking in transparency, frankly”.

The Commission’s CEO sought unsuccessfully to counter this criticism by explaining: “I was not at the Commission at the time, so I am very happy to look at what the reasoning was for it not being published. My understanding since I have joined the Commission is that we have fed into the White Paper that affordability checks will be considered as part of the White Paper’s recommendations, rather than have essentially two bites at that”.

If anything, this made matters worse. Julian Knight shot back at him: “Affordability and affordability checks are of great public interest. It seems to be very strange that this has not been made publicly available. I do not know what is so secret about it that it needs to be handed over covertly to DCMS and then inform the White Paper. We have a right to see it as well and so does the general public, because we pay for you”.

From a personal perspective, I have some sympathy with Andrew Rhodes, who was clearly unprepared for this line of questioning. However, it has served to expose even more the urgent need for considerably greater clarity in relation to the Gambling Commission’s precise expectations of UK licensed gambling operators (both remote and land-based).

The sole item of formal UKGC guidance on affordability of which its licence-holders are obliged to take account (pursuant to LCCP Social Responsibility Code provision 3.4.1) is within its Customer Interaction Guidance that was first published in July 2019, prior to it coming into force in October 2019. That contains no greater clarity now on the regulator’s expectations on affordability thresholds than it did then and neither will the updated such guidance for remote operators when it comes into force on 12 September.

Contrary to the view expressed by some UKGC officers conducting compliance assessments, the Commission’s annual Compliance and Enforcement Report does not constitute guidance of the same type to which reference is made within LCCP SR Code 3.4.1 and nor does it have the status even of an Ordinary Code provision of the LCCP.

In any event, no reference to affordability was contained in the 2020-2021 such report presumably because, as we now know, the Commission had already by then passed over responsibility on that to DCMS.

Furthermore, in his GambleAware conference speech last December, the then Gambling Minister Chris Philp appeared (to me at least) to undermine what had been stated by the UKGC in its previous year’s (i.e. 2019-2020) Compliance and Enforcement Report. He said that: “to be workable and prevent harm, affordability checks need to be proportionate. As the Commission has said, demanding payslips or bank statements from every customer spending £100 or so is likely to be unwelcome, disruptive and disproportionate to the risks”.

The need for greater clarity from the Commission is reinforced yet further now that a leak from ‘well-placed sources’ of key proposals within the first draft of the White Paper (including in relation to affordability checks) has been publicised. That should be even more of a priority with the updated customer interaction guidance for remote operators coming into force as soon as 12th September, as mentioned above, although (as I have previously advised) affected operating licence holders should most certainly not wait until then before taking that new guidance into account.

The Commission is unlikely to come in for an easy ride in forthcoming Parliamentary debates once the White Paper has finally been published, as evidenced by harsh criticisms of the regulator made during a 7th June Westminster Hall debate on the collapse of Football Index.

Further criticism emanated from the DCMS Committee at the above-mentioned oral evidence session on 30th June. This arose from its Chairman quizzing Andrew Rhodes on what metrics the Commission uses to assess (a) whether the National Strategy to Reduce Gambling Harms is working and (b) exactly how it is trusted by its licensees. Having received what he clearly considered to be unsatisfactory answers to both questions, Julian Knight asked: “What do you do? There seems to be money going out the door and no accountability for that money, apart from when you make the award. This money just splashes out there and you have no idea in terms of what this impacts with the licensees. I am struggling to think precisely as an organisation how you are doing your job, because these seem to be key measures and indicators of whether you are successful”.

If there was a positive for all concerned at that session, it was Andrew Rhodes’ confirmation to the Committee that “the headline rates of gambling harm as measured as an official statistic have been falling. That is a good thing”, adding that “standards are undoubtedly rising, but there is more that we should do”.

So, to conclude: what seems likely is that escalation of the gambling reform debate will continue regardless of when the White Paper is published. There is certainly no shortage of topics.

Just for example, we have seen a recent recommendation by UK public health leaders that the primary objective of the Gambling Commission and local licensing authorities should be to ‘aim to protect the public’ instead of ‘aim to permit gambling’. On the other hand, some may prefer a proposal of the type contained in the Government of Gibraltar’s ‘Command Paper’ (by way of consultation on repeal of its gambling legislation) that, in considering what degree of customer protection is appropriate, its Gambling Commissioner must have regard to (amongst other things) the general principle that consumers should take responsibility for their decisions.

What seems certain is that, in whatever form and whenever it arrives, to quote the late great Sam Cooke from nearly 60 years ago, ‘A Change Is Gonna Come’.


David Clifton –  Director @ Clifton Davies


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