Andrew Rhodes’ speech at the CEO Briefing 2022: Turning over a new leaf?
The current Chief Executive Officer (“CEO”) of the Gambling Commission, Andrew Rhodes, delivered a 12-page speech at the CEO Briefing 2022 on 25 November 2022. This blog, whilst not intended to be a comprehensive overview, will outline key themes from Mr Rhodes’ speech. Part One will summarise key issues facing the gambling industry, and Part Two will summarise Mr Rhodes’ vision for the Gambling Commission.
Part One: Key issues facing the gambling industry
Online illegal gambling
Mr Rhodes addressed the issue of online illegal gambling in his speech. He recognised that “[t]here is an inherent danger in consumers turning to illegal sites where they will have little or no protection or recourse”. Although Mr Rhodes acknowledged that the “so called black market” poses various problems, he believes that the associated “risks” are “overstated”. He insinuated that gambling operators should not attempt to exaggerate the issue of online illegal gambling to distract the Gambling Commission from their “bad practice in the legitimate market”. Mr Rhodes, however, assured operators that the Gambling Commission’s efforts “will increasingly be further upstream to seek to disrupt these illegal sites as much as possible”. He reminded operators that avoiding “extreme” and “totally avoidable” breaches would unlock greater resources for the Gambling Commission to address online illegal gambling websites.
Additionally, Mr Rhodes addressed the issue of innovative products in his speech. Innovative products, such as “non-fungible tokens – or NFTs – ‘synthetic shares’ and crypto currency”, are becoming “increasingly widespread” due to competitiveness in the gambling sector. As a result, the classification of products is becoming “increasingly blurred”. Although the Gambling Commission is “watching” and will “have questions of any operator who is taking risks in this space”, in many instances the matters will be “beyond the Gambling Commission’s remit”.
Part Two: Mr Rhodes’ vision for the Gambling Commission
A more collaborative approach with operators and regulators
Mr Rhodes pledged that the Gambling Commission will increase their collaboration and engagement with operators and other regulators. Their “strategy will be to secure compliance at the earliest possible opportunity” to mitigate the need for “formal action” against operators. More broadly, he emphasised the need for the Gambling Commission and industry to collaborate to deliver “better research, better data focussed on better outcomes for consumers”. For example, he mentioned that preparations have commenced for a one-day Conference scheduled to take place on 9 March 2023. It will be designed to bring key stakeholders together (such as operators and researchers) to improve how the Gambling Commission conducts research and synthesises research data to “improve the evidence base”. Mr Rhodes also proposed the (re)introduction of “an account management approach for the largest operators”, discussions with senior management teams at gambling operators and “sector-based and GGY-based round-table discussions”. Furthermore, Mr Rhodes noted the continued importance of “international working with other regulators to try to bring further consistency to regulation”.
Continue to avoid a prescriptive approach towards regulation
Mr Rhodes highlighted that the Gambling Commission’s outcomes-focused approach mirrors the UK’s flexible legislative regime. The Gambling Act 2005, a liberal legislative framework, gives the Gambling Commission autonomy in its approach towards regulation. Mr Rhodes contrasted the UK gambling regime to other jurisdictions which grapple with “unintended consequences and a lack of flexibility” due to their “highly prescriptive legislation”. As such, the Gambling Commission is reticent to “specify precise intervention points and actions” because every operator is uniquely structured and therefore should have “the ability to set processes that suit [their] customer types and [their] risks”. In light of requests from operators to increase the rigidity of the Gambling Commission’s approach, Mr Rhodes warned operators to “[b]e careful what [they] wish for.” It therefore appeared that in the absence of fundamental legislative change, the Gambling Commission’s resistance towards a prescriptive approach is set to continue, which is welcomed news to us.
In his speech, Rhodes’ appeared to take a notable shift from the approach adopted by his predecessor, Neil McArthur. Most markedly, Rhodes acknowledged it is not the Gambling Commission’s role to make “moral judgement on how much money is spent on gambling” and, secondly, he recognised the Gambling Commission is not liked and is not perfect, which, he noted, was “perhaps something everyone will actually agree on”. There is much to unpick from Rhodes’ speech and the true test will be when the White Paper is finally published. However, at a surface level, it appears to be an attempt by the Gambling Commission to turn over a new leaf with the industry through engagement, which we very much hope flows throughout 2023 and beyond.