The emergence of ‘new, novel products’ that have hit the UK’s online gambling market in recent years have presented a unique challenge for both regulators and operators.
Speaking to industry stakeholders at last week’s ICE 2022 London expo, UK Gambling Commission (UKGC) Deputy CEO Sarah Gardner outlined ongoing concerns, noting that many of the products and their engagements are a potential cause of gambling-related harm that require deeper monitoring.
The main difficulty with these products according to Gardner, is that they do not fit wholly within the definition of gambling, use language that does not make it clear whether a customer is making a bet or not or do not fall entirely – or should not fall within – the Commission’s remit.
Whilst traditional methods of gambling – sports betting, casino games and slot titles being the key examples – can enable monitoring of harm via losses and deposits, with licenced operators expected to intervene, this is not the case with the novel products being examined by the Commission.
“The patterns we see in some of these novel products do not look like that,” she remarked. ”We see consumers ‘investing’ life changing money on a product which they would not if they understood it to be gambling.
“This is something we need to be aware of. Although the product might look different, the potential to cause harm is still present. Collectively, we need to be watchful, we need to take action where we can. We need to talk to each other and share the lessons we learn.”
Although Gardner did not specify which particular ‘novel products’ she was referring to, the mention of ‘investments’ points to the collapse of Football Index (BetIndex Ltd) – a high-profile incident that saw the UKGC come under widespread criticism from consumers, media and MPs.
Additionally, the rise in popularity of blockchain-based products such as Non-Fungible Tokens (NFTs) and Fan Tokens for sports, that fluctuate in value, will no doubt be on the Commission’s agenda.
Notable incumbents that have announced an intention to launch NFTs offerings include Entain, via its recently launched £100 million-backed Ennovate innovation hub.
Outside of novel products, Gardner also observed that consumers now have access to a wider range of markets, including international ones, whilst also noting that the black market presents a threat to consumers and the regulated sector.
Regarding the black market, she noted: “That is obviously an area of focus for us but we do at least know about it and we are deploying more resources to combat it.”
In order to safeguard customers, both the regulator and industry needs to be ‘more agile in how we respond to the challenges we face as this market continues to evolve at pace’, whilst sharing best practice, leveraging data and gaining a ‘truer picture of consumer behaviour’.
Leveraging of data has been repeatedly reiterated as a key objective of the UKGC and DCMS. Gambling Minister Chris Philp and UKGC CEO Andrew Rhodes have both promoted the development of a Single Customer Viewpoint (SCV) as headline directive safeguarding a new generation of consumers.
“In essence, we are improving the way we collect our most important dataset, to create a single, gold standard survey that covers the whole of Great Britain,” Gardner stated.
“Data is also integral to our work on the Single Customer View – the goal of which is for industry to use their data in a more joined up manner to protect consumers from harm.”
Concluding, the Deputy CEO asserted that the industry and regulator should move forward ‘with confidence and show our collective capability’, but also noted that the UKGC will continue to penalise companies that violate licensing conditions, outlining plans to conduct 130 regulatory investigations throughout 2022/23.
“We have been clear to the operators we regulate that a growing business is not an excuse for growing misconduct, and we will not turn a blind eye to bad practice.”
Investigations and penalisation alone, however, is not enough to combat gambling related harm, she asserted – reiterating the need to ‘keep talking’ and share best practices, leverage data and gain greater knowledge of consumers in order to address the challenges of a rapidly evolving gambling sector.