Winning Post: Swedish regulator pushes back on ‘Storebror’ approach to deposit limits

Industry strategic consultancy Regulus Partners starts the week by analysing the regulatory landscape in Sweden, and the APPG’s open letter to the UKGC on stake and prize limits.

UK: in Parliament – Come in No3; your time is up

There was a whiff of singed cotton about the politics of gambling this week as the Welsh firebrand, Carolyn Harris (Lab, Swansea East) held the Gambling Commission’s feet to the fire on the subjects of online gambling restrictions and advertising.

As chair of the Gambling-related Harm All-Party Parliamentary Group, Harris had earlier this year extracted (under conditions of moderate duress) a pledge from Gambling Commission chief executive Neil McArthur to carry out a review of online stakes and prizes and advertising freedoms and to report back to the APPG.

At the time, the Commission tried to shrug off the concessions as nothing new (and we are sure that someone, somewhere probably bought this). However, McArthur’s time is now up and Harris and her fellow parliamentarians demand satisfaction.

The letter, sent on Monday (and published on twitter) stated that, “you will recall that at our meeting you reported to us that the Gambling Commission was focussed on looking at online stake and prize limits and said that you expected to respond with the Commission’s view ‘within the next six months’. This six month period has now passed and we are writing to ask for the Commission’s view and for an update of your work on stake and prize limits online and on how you have looked to ‘resolve’ this issue, which you said you were intending to.”

While there is something a little unsettling about an APPG attempting to direct the activities of a state-appointed regulator, Harris is on firm ground in asking McArthur to come good on his pledge (even if parliamentarians are hardly renowned themselves for such fidelity to commitment), although these have not been a normal six months for anyone (a valid excuse, though perhaps not if only deployed at the end of the time period).

The letter highlighted the fact a review of online structural characteristics includes prizes as well as stakes. The risk is that prize restrictions are set in effect by reference to land based stake limits. Thus a £5 stake limit might imply a cap on progressive jackpots of £20,000; while a £2 limit would suggest a prize maximum of just £500. – risible figures compared to current practices and what would be relatively easily found in a black market environment.

Attempts to shoe-horn remote gambling into the same licensing structures as landbased is based upon a number of fallacies: first, that land based restrictions are based upon anything more scientific than a wet finger on a breezy day; second, that the issues around online gambling and land based gambling are the same (or even similar) and require identical solutions, and; three, that the efficacy and/or the effects of regulation are uniform across all sectors.

Greater controls are likely needed to regulate online products – but the challenge is not straight-forward and needs to be addressed as part of a proper, scientific Government-led review rather than rushed politicised hyperbole. The alternative is backdoor legislation via a regulator perpetually harried by parliamentary backbenchers and unelected peers.

The Gambling Commission owes Carolyn Harris a response; but that response should not be a craven attempt to ‘look tough’ in front of elements within parliament while essentially ceding complex policy decisions to knee-jerk, assumption and dangerous lack of scrutiny.

Sweden: regulation – Knowing Me, Knowing You – Swedish regulator pushes back on ‘Storebror’ approach to deposit limits

Sweden delivered a lesson in the perils of ‘Something Must be Done’ regulation this week as the country’s Gaming Inspectorate appeared to pour cold water on proposals for a central register to control online gambling expenditure.

The mandatory deposit limit of 5,000 SEK (c.£474) per week was introduced in July as an emergency response to fears about the impacts on mental health of population lockdown. The measure applies at the level of the licensee so the cap is likely to be only moderately effective at regulating expenditure at the level of the individual (who may access multiple accounts). Thus while the cap is likely to have a moderating effect, vulnerable consumers may be most likely to circumvent its intention – while recreational gamblers are most likely to experience unnecessary inconvenience (the inverse of good regulation).

The Swedish Equality Commission has therefore proposed a central register to monitor and control expenditure; but the response from the Gaming Inspectorate has been lukewarm, reflecting concerns that such a move may infringe upon the rights of citizens. Curiously, for an organisation interested in promoting equality, the Equality Commission appears not to have proposed a central register of consumption for e-commerce more generally. As we have observed before, it is becoming increasingly acceptable to deny to those adults who enjoy a flutter the rights to privacy, to autonomy, to diversity of opinion and to freedom of choice championed so vigorously elsewhere.

The episode also raises the question of why it would be considered appropriate (particularly in these straitened times) to spend money on creating a central register and a system of oversight for something that was only supposed to be a temporary measure. History tells us that crises may be used to impose restrictions on civil liberties (sometimes justifiably, sometimes not), which somehow fail to get unwound afterwards.

The developing European appetite for imposing blanket consumption caps on gambling appears highly illiberal; but we should not forget that such moves tend to reflect a failure of industry to address concerns through more targeted (and robustly evaluated) measures. Knee-jerk state intervention is rarely the right answer – but sometimes authorities are left in positions where quite understandably they feel that they have no choice but to “do something”; even if something turns out to be the ‘wrong’ thing.

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