In last month’s “Licensing Expert” article for SBC News, I talked about a possible link between erosion of parliamentarians’ trust in the Gambling Commission and erosion of the Commission’s trust in the gambling sector.
Since then, more recent events have served to underline even more the extent to which trust in both the regulator and the regulated has so regrettably diminished even further. Obvious examples of this exist in the reports arising from (a) the Gambling Related Harm APPG’s Online Gambling Harm Inquiry, (b) the House of Commons Public Accounts Committee’s examination of “Gambling regulation: problem gambling and protecting vulnerable people” and (c) the House of Lords Select Committee’s inquiry into the social and economic impact of the gambling industry.
These three highly critical reports were published in the space of a mere twelve working days. It is no wonder that the Betting & Gaming Council is now actively calling on the UK government to delay no longer commencing its review of the Gambling Act 2005. In so doing, the BGC is focusing attention on the House of Lords report. That’s no surprise, given that it is arguably the most considered of the three reports emanating from parliament, despite all three reports basing certain of their conclusions on contentious statistics, factually questionable statements and unsubstantiated opinion.
With other gambling-related inquiries already underway – including one into crime and problem gambling undertaken by the Howard League Commission and another investigating the impact of the COVID-19 lockdown on gamblers, led in partnership by the Universities of Stirling and Glasgow, there is no sign that the topic of gambling – and online gambling in particular – will fade away from media, public or parliamentarian attention any time soon.
What has to be faced up to is the fact that, as matters stand, it is those from the gambling-related harm and anti-gambling lobbies who have so far gained more political ground than the gambling industry has done itself. That is explained in some quarters – even by those traditionally supportive of the industry – by reference to historic examples of the online sector having so comprehensively shot itself in the foot that it is now so mortally wounded that it stands little chance of recovery unless it starts waving a white flag.
I believe that to be too pessimistic a view, although the mounting PR challenge facing the industry as the forthcoming government review gets ever closer will demand superlative lobbying skills to be employed by those able to displace opinion with evidence and substitute fact for fiction. High on its list of priorities should be hard evidence to prove that it will be illegal offshore black-market operators that will stand to benefit most from overly restrictive regulations being imposed on the online sector.
Come what may, it will be hard for the industry to deny that the die is already cast in so many respects. I suspect that recognition of this was behind the decision by RAiG (Responsible Affiliates in Gambling) to conduct a complete about-turn in deciding to support a licensing or registration regime for gambling affiliates.
The current Gambling Commission consultations on high-value customers and online slots game design & reverse withdrawals (running until 14 August and 3 September 2020 respectively) also provide clear examples of the direction in which the regulatory wind is blowing. Don’t expect the proposals in either of those consultations not to be implemented in full.
Experience has shown that whatever the Advisory Board for Safer Gambling recommends in terms of policy development, we can soon expect to hear further from the Gambling Commission upon the very same topic. The regulator’s creation of an interim Experts by Experience Group is the most recent example of this, so – taking into account recommendations contained within the ABSG’s “Progress Report on the National Strategy to Reduce Gambling Harms” published at the end of June – I believe we can expect to see even faster progress now towards a mandatory RET levy, more effective arrangements for commissioning gambling-related harm research and creation of a safer gambling league table.
One of the ABSG’s suggested key baseline metrics from which to set targets and measure progress for the purposes of that safer gambling league table is affordability. Time most certainly does not stand still on that subject, and it’s worth noting the following:
- Since October 2019, UK licensed operators must take into account the Gambling Commission’s customer interaction guidance that advises them to use open-source data to assess affordability for their British customer base in order to improve their risk assessments for such interactions and to better enable early interventions to help those experiencing, or at risk of, gambling-related harm.
- The Commission’s additional interaction guidance, introduced without prior consultation on 12 May 2020, stated that its licensees should ensure they implement into their customer interaction framework affordability assessments for individuals, picked up by potential gambling harm thresholds and triggers.
- Its draft VIP customers guidance, published on 19 June 2020 as part of the Commission’s high-value customers consultation (mentioned above), is more explicit. If, as anticipated, that draft guidance is implemented in its present form, it will state that “licensees are required to apply …. affordability checks …. to all customers”, and that “licensees should be taking steps to ensure that all customers are gambling with money they can afford to lose (lawfully acquired disposable income) and without experiencing harm”.
- That form of wording would explicitly require, for the first time, that the Commission’s licence-holders must apply affordability checks on all customers, something that should be the subject of a consultation exercise in its own right, assuming that it would have to be introduced by way of an LCCP change. So – I suggest you watch this space!
- Additionally, in May, in June and in July the Gambling Commission has flagged up some new emerging money laundering risks, including that a failure to conduct sufficient customer affordability checks offers opportunities for illicit finance to infiltrate licensees’ financial systems. In this respect, it has just reminded its licensees “of the importance of assessing customer affordability when determining risk levels. Disposable income levels must be a starting point for assessing financial benchmark triggers and knowing a customer’s occupation is an important factor in determining income levels and complements businesses ‘KYC’ knowledge”.
So where can crumbs of comfort be found this month?
Still with affordability in mind, the House of Lords Select Committee included within its recommendations the suggestion that “the DCMS and the Gambling Commission should without delay contact the Information Commissioner’s Office and agree a procedure, consistent with the GDPR, allowing operators to share with all other operators the information they derive from affordability checks on individuals”. At first sight, many may think this a good idea. It’s easier said than done, however, and issues of personal privacy are unlikely to be readily overcome. In the meantime, online operators might be interested to read last month’s EGBA “Code of Conduct on Data Protection in Online Gambling”.
Within the same report, the Select Committee recommended that banks should work together with UK Finance to create an industry-wide protocol on blocking gambling payments, with at least a 48-hour cooling off period. As was discussed in the CasinoBeats Malta Digital “Gambling Payments & Self-Governance” panel session that I had the pleasure to moderate on 1 July, many in the gambling sector would welcome greater responsibility being placed on banks to play their part in reducing gambling-related harm. They should be pleased therefore to read the recommendation in research commissioned by GambleAware (entitled “A Blueprint for Bank Card Gambling Blockers”) that the UK Government “needs to create the legal and regulatory conditions to encourage the financial services sector to innovate and develop a range of consumer spending controls”.
Those in the esports sector will have been encouraged by the government’s plan to “help this burgeoning industry deliver on its potential” by means of “a ministerial roundtable with a range of esports stakeholders to discuss the opportunities and barriers to market-driven growth in the UK and how industry is working collectively – or can work in future – to encourage best practice in areas such as player well-being and esports integrity”.
Last, but most certainly not least, subject to one notable exception, land-based gambling operators (in England at least) have been able to re-open for business, no doubt with the Gambling Commission’s FAQs and GamCare’s safer gambling tips ringing in their ears as they did so. But why, oh why, do casinos have to remain closed? Like so much else mentioned in this article, I surely cannot be the only person who suspects politics to be at play here too.
David Clifton – Director – Clifton Davies Consultancy Limited