MP Meg Hillier (Isabel Infantes / EMPICS Entertainment.)

Parliamentary report brands Gambling Commission as ‘toothless’

The UK Gambling Commission has come in for extreme criticism from a group of MPs reporting on how gambling regulation is protecting vulnerable people. The regulator is described as ‘toothless’ and in need of a ‘radical overhaul’.

In a report published this morning, the House of Commons Public Accounts Committee also branded the Department for Digital, Culture, Media & Sport (DCMS) as ‘complacent’ .

Unlike some of the more recent in-depth studies into gambling by Parliamentary bodies, the report is based on just one evidence session with DCMS Permanent Secretary Sarah Healey and Gambling Commission Chief Executive Neil McArthur and 17 written submissions, but still makes some sweeping recommendations.

These include:

  • Proactive measures for consumer care, such as league tables
  • A ‘radical’ improvement on the data collected 
  • Strengthening of consumer rights

Meg Hillier MP, Chair of the Committee, said: “What has emerged in evidence is a picture of a torpid, toothless regulator that doesn’t seem terribly interested in either the harms it exists to reduce or the means it might use to achieve that. The Commission needs a radical overhaul: it must be quicker at responding to problems, update company licence conditions to protect vulnerable consumers and beef up those consumers’ rights to redress when it fails.”

One of the interesting conclusions of the report is that the Gambling Commission is failing to measure its own effectiveness. The lack of KPIs for the regulator could be seen as quite embarrassing given the pressure it puts on the gambling industry for their own KPIs.

The report reads: “The Commission has clear overall objectives to ensure that gambling is fair and safe but does not have meaningful indicators to measure whether it is being effective, and therefore to be held to account. The Commission also has limited understanding of the impact of its actions to improve outcomes for consumers.

“For example, it increased the value of the financial penalties it enforced from £1.4 million in 2014-15 to £19.6 million in 2018-19, but it does not know whether this increase has strengthened the deterrent on operators to break rules. The Commission acknowledges it can do more to improve how it evaluates its impact and is planning work to strengthen its evaluation framework.”

The reports also serves notice that the funding of the regulator may be changing very soon, with the industry likely to be picking up the bill.

It said: “Under the current regime, consolidation within the industry results in a reduction in the Gambling Commission’s budget regardless of the impact on the gambling yield. The Gambling Commission told the Committee that a recent merger could result in a reduction of £400,000 in the Commission’s budget. In contrast to the Commission’s £19m a year, the gambling industry has agreed to spend £60m to treat problem gamblers. 

“The government has approached other public health issues on the basis that prevention is better than cure. However, the Department was unwilling to accept the premise that increasing the Commission’s budget to prevent harm would be preferable to spending on treating problem gamblers. 

“The Commission and the Department are currently looking at how to improve the regulatory funding model. The Department recognises that it can change licence fees through secondary legislation, but argues that some aspects would require primary legislation, particularly if the Commission needed additional powers.”

One of the more unclear recommendations is that the Commission should ‘urgently investigate the impact of fixed odds betting that falls under “lottery” legislation and is accessible by 16 and 17-year-olds’. 

Given the evidence sessions brought up instant win games using similar ‘fixed odds’ terminology, it seems likely to refer to the scratchcards that the National Lottery and society lotteries are allowed to offer. Given that there is already a consultation about making these games over 18 only, it is something that is seemingly already in process.

Hillier added: “The issue of gambling harm is not high up enough the Government’s agenda. The review of the Gambling Act is long overdue and an opportunity to see a step change in how problem gambling is treated. The Department must not keep dragging its feet, we need to see urgent moves on the badly needed overhaul of the system.

“Regulatory failure this comprehensive needs a quick pincer movement to expose the miscreants and strengthen those they harm.”

On publication of the report, the Betting and Gaming Council said: “The industry is working hard to raise standards to help problem gamblers and those at risk, though we note that both the Regulator and the Government have made it clear that there is no evidence that problem gambling has increased.

“Our industry is already heavily regulated. We mustn’t drive customers to offshore, black market, illegal operators that don’t have any of our safeguards, and we do want to see more action taken against the unregulated industry. 

“We are committed to making more voluntary changes and driving up safer gambling standards. We will work with the Gambling Commission and the Government to achieve this, particularly on the forthcoming Review of the Gambling Act.”

 

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