Posted by Woods Whur | Gambling

The Chief Executive of the Gambling Commission, Sarah Harrison MBE, addressed ICE Totally Gaming 2017 a couple of weeks ago, some 12 months after she first spoke at the event having taken up the position in October the previous year.

Sarah took the opportunity to look back at the past 12 months and to defend the increasing regulatory scrutiny to which operators have been subject in that time. Ramping up the standards expected of them in customer care, personal data handling, crime prevention and social responsibility has, she said, been “timely. She also signalled a determination on the Commission’s part to assist DCMS in the coming year in tackling perceived issues surrounding gaming machines and gambling advertising.

The speech focussed on three main themes: public policy and market developments, a look back over the last year and a vision of the future.

On policy, Sarah used the speech as another opportunity to champion the consumer, stressing that operators’ fair treatment of their customers is of paramount importance if the sector is to be allowed to thrive. She referred to a recent hardening of public attitudes toward gambling, suggesting that, by comparison with the results of the 2010 British Gambling Prevalence Survey, recent research shows that people have become less tolerant and more concerned about the activities of the gambling industry. The Commission’s 2016 research showed, she said, that 17% of people thought that gambling should be banned altogether, 80% thought that there are too many opportunities for gambling nowadays and 62% thought that gambling was dangerous for family life. Of course, as ever with such statistics, much depends on the precise questions and the way in which they were put, and these results contrast with others that show that 33% of respondents considered that most people who gamble do so responsibly. Sarah did, fairly, concede that direct comparisons cannot be drawn with 2010 due to differing methodologies.

As to market developments, the speech highlighted the growth in the online sector, largely being driven by mobile and app-based gambling. Remote Gross Gambling Yield between April 2015 and March 2016 reached a staggering £13.6 billion and there is no reason to believe that this growth will stutter.

Although rates of problem gambling have remained unchanged since 2012, Sarah pointed to increasing concerns about the prevalence of gambling advertising, with half the population saying they see gambling advertising daily and 60% of 18-24 year olds saying they see it daily online. Against this backdrop, she outlined the continuing work of the Commission in relation to problem gambling, taking as its foundation the new National Responsible Gambling Strategy which is being taken forward by new research being commissioned by GamCare. The most recent figures reported late last year by the Institute of Public Policy Research estimated that problem gambling costs the UK Government between £260m and £1.6b a year. The variance between these two figures is huge, of course – this is largely explained by the difficulties in measuring impacts across the full range of health, welfare, employment, housing and criminal justice topics. Sarah stressed the Commission’s commitment to continuing to work in this area.

Looking back at the Commission’s work over the last 12 months, the speech highlighted the fairness to consumers theme and the ongoing work being undertaken in conjunction with the Competition and Markets Authority. As previously reported here, that work is largely focussing on the betting sector, and specifically on concerns that have been raised surrounding cancelled bets, altering of odds and misleading promotions. The project has recently been extended to cover online betting, and we can expect to see considerable crackdowns in this area. We also anticipate that the Commission will continue, and aim to strengthen, its co-operating and partnership working with other regulators, not merely the CMA, but others such as the Advertising Standards Authority and the Information Commissioner’s Office. The ICO is already undertaking a piece of work looking into spam SMS and Sarah pointed to the gambling sector as being one of the worst offenders, saying:

…my message to [affiliates] is that they need to get their house in order. But far more importantly, my message to operators is there is no ‘fudge’ around this, no equivocation – the affiliates who promote your brand and who drive business to your websites are your responsibility, and it is you who are accountable.

Sarah also pointed to the Commission’s work on social responsibility in the last year, notably by strengthening the relevant provisions of the Licence Conditions and Codes of Practice and the introduction of the requirement upon the biggest operators to produce an Annual Assurance Statement to demonstrate that compliance with the licensing objectives is at the core of their business. She described as “poor” last year’s Statements when it came to operators quantifying the scale of problem gambling in their business but did concede that there are signs of improvement in this field, with some operators using a data-based approach to come up with the answer and some even coming together to better understand drivers and mitigations of problem gambling. Sarah also praised the industry for the progress that has already been achieved through the national self exclusion schemes that now apply across the casino, betting, bingo and arcade sectors and which are due to be extended to the online sector in the coming year.

At the same time, the speech roundly criticised operators who, in Sarah’s view, are continuing to put commercial gain over compliance by, for example, adopting a “wait and see” approach to anti-money laundering measures, ie waiting for the source of funds to be proved to be unlawful before acting. This, she said, is “clearly unacceptable” and she warned the industry that it “must do better”. However she also pointed to the new crime prevention measures introduced by the Commission last autumn and praised Caesars and Rank for showing leadership in this sphere, sharing their learning following adverse enforcement cases at the Commission’s first Raising Standards Conference last November.

Sarah made it plain that, whatever the fate of the 4th Anti-Money Laundering Directive, the Commission will expect operators to continue to intensify Know Your Client activity. Whether the whole or any part of the industry will be exempt from the Directive remains to be seen.

Looking to the future, the speech referred to the Commission’s recent announcement regarding its enforcement powers and reiterated the fact that fines are set to increase, with formal reviews being placed upon an equal footing with voluntary settlements. Sarah made it plain that the Commission are fully committed to tackling unlicensed gambling, particularly to protect children, and that it will not hesitate to use all of the powers available to it and to collaborate with other operators wherever possible, both here and abroad.

Sarah laid down a challenge to the sector, which, she said, if it is to thrive, depends upon building customer trust and confidence and long-term relationships with consumers based upon respect. She invited operators to consider whether some of the vernacular that it uses, such as “price tarts”, “bonus abusers” “grind action” and “whales”, is appropriate, suggesting that it “begs serious questions.

The speech also pointed to an increased focus on data: the use of data by operators to both protect their customers and promote their products, and the use of data by the Commission to evaluate compliance and to inform consumers and policy makers. Sarah stressed the Commission’s commitment to understanding and dealing with consumers better. It is noteworthy that she also pledged to “[invest in our people, our skills and our culture”, saying that “…we know we need to do more in the spirit of continuous improvement.”

The speech also touched briefly upon the lottery sector, in what many who have been anxiously awaiting it might interpret as a hint that the increase in proceeds limits might come about in the next 12 months. Sarah stressed the need to balance protecting the National Lottery and consumers with enabling contributions to good causes to grow.

On gaming machines, the speech confirmed that part of the Commission’s evidence base forming the foundation of its advice to Government on its Gambling Review will be published “very shortly”: machine play over the last 24 months. Sarah made it clear that the Review will not merely focus on stakes, prizes and speeds, but on the wider questions of consumer protection and prevention of gambling-related harm. Curbs on machines will undoubtedly come and it will be interesting to see precisely what form those curbs will take. We will of course continue to keep you informed of these developments and others in the sector.