Winning Post: Gambling Commission needs to explain another fine mess

Ahead of the government publishing definitive industry reforms, Regulus Partners points to mounting criticism of the UK Gambling Commission (UKGC) that has failed to explain its tougher regulatory approach…

With a White Paper on legislative reform allegedly in the offing, now would seem to be an inopportune time for the UK Gambling Commission (UKGC) to slip into crisis. In recent months, the regulator has faced a withering storm of criticism from the horseracing media and a lengthening list of Parliamentarians over the imposition of low-level affordability checks on bettors (see below for our estimates on the impact on betting on racing in the UK).

As concerns have grown about the deleterious effects of ‘affordability-by-coercion‘, the shortcomings of the Commission’s ‘never explain; never apologise’ protocol has been cruelly exposed. Forced into belated engagement, its CEO, Andrew Rhodes, now appears intent on abdicating all responsibility for the effects of his own organisation’s policy and enforcement actions. So far, this has only deepened the confusion, with licensees and licensing lawyers left unsure whether lines of compliance are drawn by the soft-speaking of Rhodes or the big-stick of his enforcement officers.

The Commission’s failure to publish any meaningful analysis from its 2020 call for evidence on £100 spending caps and affordability checks hardly helps.   The controversy over affordability checks is just the latest in a series of debacles involving the market regulator. In the past 12 months, it has danced the hokey-cokey on remote customer interactions; kept licensees in limbo over Assurance Statements; published demonstrably flawed prevalence survey data; classified almost all gambling consumers as ‘vulnerable’; claimed that reduced cinema-going is a gambling harm and that the greatest burden of harms are found amongst non-problem gamblers; been complicit in the cover-up of the Public Health England scandal; failed to monitor or evaluate the allocation of around £40m of quasi-public money in support of its (now defunct) National Strategy to Reduce Gambling Harms; and openly funded anti-gambling activism during the middle of a legislative review.

There is a sense that the Commission is approaching a reckoning. This month, the ebullient Deputy Chairman of the Conservative Party, Lee Anderson (Cons, Ashfield) asked the Secretary of State for Business and Trade “what steps her Department is taking” to ensure Gambling Commission compliance with the Regulators’ Code. The Commission has long given the impression that it does not accept the jurisdiction of the Code – so this will be an interesting test.

Racing TV has launched a ‘Write to your MP‘ campaign to encourage horseracing bettors to raise concerns in Parliament about affordability checks, potentially rousing a much larger group of MPs. At some point, the National Audit Office and the Public Accounts Committee may decide it is time to see how much progress the Commission has made since their damning reports in 2020. It seems likely that the Culture, Media and Sport Select Committee will subject the performance of the regulator to scrutiny as part of its forthcoming gambling review.

It is small wonder that the regulator’s own board members are abandoning ship. The Government is currently seeking to recruit an entirely new board – with all six commissioner places up for grabs. The board is not normally replaced on a wholesale basis and some commissioners had been due to serve until 2025. Some explanation is probably required for why the changes are being made – but so far none has been forthcoming. Commissioners receive around £14,000 a year in compensation – and may consider this too low a return for routine chaos and reputational risk. The chances of the DCMS being able to assemble a high-calibre new board against this background of organisational dysfunction appear slim.

When the DCMS appointed a new chief executive and chair in 2021, it seemed to offer a chance for a reset at the Commission. Some things have improved since then – notably, the more measured public performances of Mr Rhodes compared with his predecessor – but a golden opportunity for introspection appears to have been passed up.

A review of the Commission’s mission, mandate and performance is desperately required. For this to be meaningful, Andrew Rhodes and his team will need to engage actively with stakeholders to create opportunities for honest, constructive feedback and to address valid criticism. Embroiled in crisis, it is imperative that the Commission does not yield to the temptation to put its head down and carry on regardless…

Featured article edited by SBC from ‘Winning Post’ Sunday 19 February 2023 (click on the below logo to access the full unedited analysis of Winning Post).