Industry strategic consultancy Regulus Partners kicks off the week by breaking down the Social Market Foundation’s pre-review report on the Gambling Act 2005.
UK: regulation – Justified and Ancient? SMF is gonna rock you
The publication this week of the Social Market Foundation (SMF) pre-review report conducted on the 2005 Gambling Act brought some things old, some things new, some things borrowed and some things radical to the public policy debate.
That the report should in some respects follow a well-trodden path – the development of online game licensing categories; a review of ‘white label’ agreements; a review of ‘point of consumption’ taxation; and the institution of a new gambling ombudsman – was no great surprise.
The SMF report’s lead author, Dr James Noyes was handmaiden to these ideas in his former role as policy adviser to the Labour Party’s review of gambling and health.
New ideas included the expansion of the personal licensing regime for online gambling (a logical attempt to put more personal skin in the game on customer protection) and an end to the arbitrary and opaque nature of Gambling Commission enforcement actions, also inherently logical and long overdue.
The proposal to introduce a new kitemark for licensed and socially responsible online operators was borrowed from the Budd Report of 2001 – although greater thought is required to prevent counterfeiting. The SMF’s attempt to encourage greater onshoring of the industry is also borrowed from Budd who suggested that an ‘onshore footprint’ should be enforced as a licensee requisite.
The new twist here is to propose that the system of tax incentives be reversed to encourage onshoring rather than offshoring. These are also sensible but thought will need to be given to how counterfeiting of kitemarks might be enforced.
Concerns are likely to arise in response to the more radical proposals. The first of these is that a new inter-departmental regulatory structure be put in place with the Ministry of Justice, the Department of Health and Social Care, the Department of Business, Energy and Industrial Strategy and the Department for Culture, Media taking responsibility for different aspects of gambling governance.
There are a number of reasons to consider this recommendation with caution – not least the dysfunctional nature of ministerial relations exposed so clearly by the recent challenges of Brexit and Covid-19. The proposed abolition of the tripartite arrangement (UKGC, ABSG and GambleAware) is likely to be popular given the undignified way that these organisations have deported themselves in recent years – but it is easy to tear things down and much more difficult to build up effective new bodies.
The requirement is that consumers should be restricted to £23 a week in online deposits (a global limit capturing all of their expenditure) prior to some affordability check is typical of the deeply paternalistic approach toward gambling evinced by many in the regulatory-political firmament these days.
The founding father of modern gambling studies, Professor Bill Eadington once observed that the “second-class status of gambling as a commodity – and of gamblers whose demands are not fully respected in the public policy formulation process – has created a volatile political environment for gambling“.
These dynamics can be clearly seen in the current debate on affordability. As we have written before, orthodox thinking has been inverted so that the eradication of affordable gambling is no longer the goal of harm prevention programmes but instead a discrete attempt to control how adults live their lives. We are in danger of creating a very worrying precedent in our society that may also in time apply to the food that we eat, the drinks we consume and our general shopping habits.
The SMF’s report is light on evidentiary analysis, basing many of its proposals on opinion or political theory rather than deep exploration of the facts. It does at least make no pretence to empiricism…refreshing in itself after the wilful mendacity of some contemporaneous reports.
The net result is a collection of interesting ideas that should be taken seriously. This is an important contribution to the pre-review debate – constructive engagement will help to draw out matters of complexity and practicality.