Andrew Rhodes: Compliance has changed the competitive make-up of UK Gambling 

Andrew Rhodes, Chief Executive of the UK Gambling Commission (UKGC), has stated that the regulator is ready to govern ‘a settled market’ that has adjusted to three years of COVID disruptions. 

Rhodes delivered a keynote address at the ICE London 2023 expo on the “latest research shaping regulatory decisions in UK gambling”.

Leading the Commission’s development, Rhodes underlined that his tenure would prioritise undertaking better research and data to secure improved insights and outcomes on all areas impacted by gambling. 

Entering 2023, the UKGC’s data suggests that “gambling may well have settled into a new normal”, despite the UK facing global economic challenges.

Observing the current state-of-play, Rhodes reflected: “As of September 2022, overall participation in any gambling activity, in the last four weeks, remains statistically stable at 44% compared to year to September 2021.”

“Within that, the level of online gambling has continued its long-term trend up to 27% and this is matched by land-based gambling as well.”

The overall headline problem gambling rate is statistically stable as well, although more on those numbers later. So there is no explosion in online gambling, as participation has not gone through the roof in recent years.

“This means operators need to be that bit more competitive and innovative if they want to continue to grow in the British market. Or they need to diversify abroad…The truth is both are happening.”

Post-COVID, the UKGC oversees a market that has saturated as the top three operators have increased their market share to over 50% – with the 10 UK brands accounting for 77% of the B2C markets overall GGY.  

Yet despite market share gains, Rhodes noted surprise that “the largest operator groups are stating revenues are down due to safer gambling measures they are introducing. Now we aren’t saying these groups are getting everything right, but this is a development that has our attention.”

The current conundrum highlights that UK gambling remains a competitive market in which consumers are responding to necessary safer gambling changes.

Rhodes asserted that new compliance measures had impacted the competitive make-up of UK gambling, in which the Commission continues to gather at source data “detailing just how different each consumer can be.”

“Amongst the largest operators in the British market, we have seen some interesting changes which are pretty consistent across those larger operators, who are seeing GGY fall by just under 16%. The amount of money staked is down by just over 13%.”

“We have seen the number of players losing over £500 a month drop by nearly 8%, and those losing over £200 a month by a little over 2%. Whilst players staking £50 and over per spin for slots fall by 76%. Some operators have seen this reduce by over 90 percent, with the largest drop being over 98%.”

“Yet despite reporting GGY declines, data reveals that larger operators continue to register an increased volume in bets (+5%) and active player numbers of 6%.”

As such, Rhodes stated that it was unwise to draw ‘particular conclusions’ on player behaviour impacting operators’ financial performance during a transitional phase for the industry and its engagement with consumers. 

He asserted, “given the number of bets being placed with the largest 5 operators increased by 4 billion and the number of active accounts by some 4 million, it doesn’t suggest there is a flood away from gambling either, but clearly some patterns have changed during the last year.” 

In 2023, the Commission’s attention turned to implementing affordability checks/controls – in which Rhodes highlighted “misinformation circulating about the Commission’s position on the issue of affordability”.

Commenting on UK gambling’s most controversial and debated topic, Rhodes stood by the Commission’s casework that exposed unacceptable levels of failures by licensed operators over the past several years.

The casework presented was “not a moral judgement” when it highlighted cases such as an NHS nurse spending £245,000 in just three months when the operator knew her income was £30,000.

The Commission has therefore taken a tougher regulatory approach, where it feels necessary to intervene whilst the government concludes the final proceedings of the UK Gambling Review.

Controls on affordability are needed to govern an industry which sees 85% of GGY comes from around 5% of accounts. However, Rhodes made it clear that the “Commission has not imposed blanket so-called ‘affordability checks’ or set limits on what we think anyone should be ‘allowed’ to spend”.

He continued: “It is for operators to set limits themselves based on their customer types, business and risks. It is also for operators to take responsibility for preventing the sorts of cases I mentioned above from occurring in the first place.”

Improvements see the UKGC for the first time adopt a roadmap on developing its data and research strategy for the next three years, as changes in interpreting data will benefit how the market is further safeguarded. 

New initiatives continue to be improved, such as running player “Participation and Prevalence” methodology pilot studies. Whilst March 2023, the Commission will host it’s first ‘Setting the Evidence Agenda’, bringing operators together with academics and the third sector to look at gambling governance can be improved.

Rhodes concluded: “Better evidence will mean better outcomes…The Gambling Act Review of course will also have a big part to play in our plans. We continue to work with DCMS and will continue to take action to protect consumers where needed.

“Better research, better data and better evidence will drive better regulation and better outcomes for consumers. Let’s work together on that.”