24Nov

Gambling Survey of Great Britain: Gambling Commission’s new approach to collecting gambling participation and prevalence data

24th November 2023 Chris Biggs 203

In December 2020, the Gambling Commission launched a consultation on proposals to change the way it collects data about adult gambling participation and problem gambling prevalence. Since then, the Gambling Commission has been developing a “single, gold standard population survey for the whole of Great Britain”, in an effort to improve the quality, robustness and timeliness of its official statistics.

Following two years of pilot surveys, stakeholder engagement, interim findings reports and fieldwork conducted by the National Centre for Social Research (“NatCen”), an independent not-for-profit organisation and registered charity, and the University of Glasgow, on 23 November 2023, the Gambling Commission published the first “experimental” statistics of the Gambling Survey of Great Britain (“GSGB”). Thus begins the roll-out of, as the Gambling Commission’s CEO Andrew Rhodes recently described it in a two-part podcast discussion with The Gambling Files, the “largest survey in the world of its kind, on gambling behaviours, attitudes, participation”.

In this blog, we discuss the background to the GSGB, its current status in light of the recent announcement, and why the GSGB is such an important project for the gambling industry in Great Britain.

What is the GSGB?

Background

Prior to the Gambling Commission’s December 2020 consultation, the GSGB was foreshadowed in the Gambling Commission’s Business plan 2020-2021, where the Gambling Commission stated, in connection with its key strategic priority to prevent gambling harm to consumers and the public, it would “review approach to measuring participation and prevalence and publish conclusions”.

As noted above, the December 2020 consultation on gambling participation and problem gambling prevalence research was subsequently launched, which included proposals to change the Gambling Commission’s research methodology to, amongst other things, consolidate the different surveys the Gambling Commission previously relied upon to understand adult gambling participation and prevalence into one population survey, and improve the frequency and turnaround time of the survey data. The response to the consultation, when it was published, confirmed that respondents largely supported these proposals, with an average of two-thirds of respondents agreeing with the proposals to change the research methodology and only one-fifth of respondents disagreeing.

In the meantime, the Gambling Commission had been conducting quarterly telephone surveys on participation and prevalence of problem gambling (the most recent results of which were published on 11 May 2023). However, it was noted by the Government in the White Paper that the telephone survey was “less robust” than the national health surveys of Great Britain in its tracking of gambling trends, and that there are gaps in the evidence and the Government’s understanding of gambling participation and prevalence of harm. This criticism reflected conclusions we had also reached in our joint blog with Regulus Partners on the topic of in-play betting.

It was thus clear, from an industry, regulatory and Governmental perspective, that there was a need for the Gambling Commission to revamp its methodology for the collection of gambling data. In light of the release of the experimental figures, the Gambling Commission’s continued roll-out of the GSGB will be closely followed by the industry.

How is the GSGB carried out?

NatCen describes the GSGB as a survey that asks individuals for their “views on and experiences of playing different games, lotteries and betting, and the effects that these activities may or may not have on people’s lives.” It explains that the GSGB will provide the Gambling Commission with high-quality information about the gaming, betting and playing habits, attitudes and harms experienced across the adult population in Great Britain.

In terms of the specific methodology, the GSGB will be an annual “push to web” survey of up to two adults per household in Great Britain. The Gambling Commission hopes that the GSGB will collect responses from 20,000 individuals each year.

Procedure

NatCen explains that survey invitation letters have been sent to addresses selected at random from the Postcode Address File. In these invitations, NatCen asks that up to two adults in each household take part in the survey online by either:

scanning one of the QR codes provided in the survey invitation letter; or
visiting the webpage (survey.natcen.ac.uk/GSGB2) and entering one of the unique access codes provided in the survey invitation letter.

Participants will be asked a series of questions that should take approximately 20 minutes to complete. As a reward for taking part, those who complete the GSGB will receive a £10 shopping e-voucher.

Further information about the GSGB and the procedure can be found on NatCen’s website.

Timeline

The Gambling Commission has published a timeline tracking the progress of the GSGB since its December 2020 consultation. This displays the various stages of the Gambling Commission and NatCen’s progress, such as the consultation, stakeholder engagement, pilot testing and interim reporting on the GSGB project.

Release of experimental statistics

What are the findings?

The findings are (in the Gambling Commission’s words) “not yet fully developed and are still under evaluation”. In the Gambling Commission’s blog announcing the update, Helen Bryce, Head of Statistics at the Gambling Commission, explained that the findings are from the “final step in the experimental stage of the project”, and have been published so users (i.e. industry stakeholders) can familiarise themselves with the GSGB’s methods and findings before they become the Gambling Commission’s official statistics.

On our initial review, we note the experimental data was based on a sample group of approximately 4,000 (up to 3,774) respondents and presents some interesting key findings:

50% of respondents (of which 53% were male and 47% female) had gambled in the past 4 weeks, whereas 61% of respondents had gambled in the last 12 months.
The three most popular gambling activities in the past 4 weeks were the National Lottery (32%), charity lotteries (15%) and National lottery scratchcards (13%).
Most gambling respondents indicated they had gambled for the chance of winning big money (84%) and because it is fun (72%).
2.5% of respondents were considered to be problem gamblers, having scored 8 or higher on the Problem Gambling Severity Index (“PGSI”) screen, and a further 3.5% of respondents were considered moderate-risk gamblers (scoring between 3-7 on the PGSI screen).

Ms Bryce explained in the Gambling Commission’s blog, due to the significant changes in its methodology for collecting this data, these results should not be compared to previous figures sourced from its quarterly telephone surveys or NHS health surveys. Generally speaking this is a reasonable point of clarification to make, but it is made in a clear effort to dampen industry outcry to the alarming increase in the problem gambling rates: as at March 2023, the overall headline problem gambling rate (measured by the PGSI screen) was “statistically stable” at 0.3%.

The Gambling Commission has also set out its views on the strengths and limitations of the GSGB methodology. Notably, it has reiterated that although the experimental sample size was approximately 4,000 respondents, the Gambling Commission still expects to gather data from 20,000 respondents annually when it moves to the official statistics phase.

The findings, which are set out in an easily navigated spreadsheet, can be downloaded here. The Gambling Commission is also seeking industry feedback on the GSGB, which can be submitted through its online form.

Current status of the GSGB

The Gambling Commission has recruited Professor Patrick Sturgis, Professor of Quantitative Social Science at the London School of Economics, to undertake an independent review of the GSGB methodology. Professor Sturgis’ findings and recommendations will be published by the Gambling Commission “early next year”, with a view to the GSGB methodology becoming the Gambling Commission’s official statistics “later in 2024”.

The Gambling Commission’s previous update on the GSGB came in a blog from July this year. Having hosted panel workshops with three stakeholder engagement groups (academics, representatives from the gambling industry and individuals with lived experience), the Gambling Commission stated that it intended to publish the first set of quarterly official statistics in Spring 2024, alongside a timeline for future quarterly release dates. With the Gambling Commission seeking an independent review of the GSGB’s methodology, it now appears that the Gambling Commission will not adopt the results of the GSGB as its official statistics until later next year.

Why is the GSGB important?

The Gambling Commission has a duty to advise the Secretary of State on: (a) the incidence of gambling; (b) the manner in which gambling is carried on; (c) the effects of gambling; and (d) the regulation of gambling (see section 26(1) of the Gambling Act 2005).

NatCen explains that the information collected by the GSGB will help the Gambling Commission to fulfil this duty by being “written up in reports for policy makers to use in their decision-making process” so it may be used to “inform policy changes in the gaming, betting and playing industry”.

Furthermore, in its Evidence gaps and priorities 2023 to 2026, published on 23 May 2023, the Gambling Commission confirmed it would be using the GSGB to:

improve its understanding of gambling participation at a national level and in sub-groups of interest;
produce robust statistics on who is experiencing gambling-relating harms, and how; and
develop its understanding of how people commit crime or are a victim of crime as a dimension of gambling-related harm.

The quarterly statistics from the GSGB will thus underpin the Gambling Commission’s future decisions about how it can better protect consumers and carry out its regulatory duties.

Of note for online B2Cs, problem gambling prevalence statistics are also referenced in the Gambling Commission’s new remote customer interaction guidance (about which we have written previously). This guidance addresses, among other things, how remote licensees can comply with the requirement under social responsibility code provision 3.4.3(14) of the Licence Conditions and Codes of Practice to “take account of problem gambling rates for the relevant gambling activity as published by the Commission, in order to check whether the number of customer interactions is, at a minimum, in line with this level”, which came into effect from 12 September 2022.

Licensees should familiarise themselves with the experimental findings, as the Gambling Commission intends. It is, in effect, a warning: Licensees should understand how to interpret the findings of the GSGB and carefully consider these results for when they become the Gambling Commission’s official statistics. Licensees should use this data to inform the minimum levels of customer interactions they are making with customers – or risk enforcement action by the Gambling Commission for not complying with a condition of their operating licence.

Summary

Following criticism of its prior methods for collecting industry statistics, the Gambling Commission appears to be building a robust research methodology to ensure the GSGB will produce its gold standard population survey for the whole of Great Britain. The latest problem gambling rates collected by the GSGB (albeit ‘experimental’) have indeed attracted further scrutiny from the industry – some may argue that the Gambling Commission anticipated such scrutiny and pre-emptively commissioned Professor Sturgis’ independent review of the GSGB. Either way, we fully expect the Gambling Commission, in its future regulatory decisions, to place significant weight on the evidence drawn from the GSGB when it becomes the Gambling Commission’s official statistics.

With new customer interaction requirements for remote operators in Great Britain in effect, we recommend all licensees (and especially online B2Cs) review the experimental findings, stay apprised of the GSGB’s further progress and closely analyse the problem gambling data that is released in light of the number of interactions they are carrying out with customers, in preparation for the GSGB becoming the Gambling Commission’s official statistics next year. After all, we know the Gambling Commission will be doing the same in future compliance assessments.

Please get in touch with us if you have any questions about the GSGB and how its results should be used to inform your remote customer interaction policies and procedures.

In “push to web” surveys, respondents are recruited offline (such as via another survey, or through the post), and then encouraged to go online and complete a web questionnaire.

07Nov

Personal management licensee: What do you need to know?

7th November 2023 Chris Biggs 228

Individuals who hold a personal management licence (“PML”) issued by the Gambling Commission undoubtedly play the most important role in ensuring business decisions are underpinned by the licensing objectives, building a strong foundation of compliance and raising standards. Ultimately, they are personally accountable and responsible for compliance failings. As personal licensees, PMLs can face enforcement action by the Gambling Commission. We expect to see more enforcement action taken against PMLs on the basis that people make decisions, not businesses.

The White Paper included a proposal to extend the requirement to hold a PML, set out in licence condition 1.2.1 of the Licence conditions and codes of practice (“LCCP”), with the goal to drive “personal accountability and responsibility”, allowing the Gambling Commission to “take necessary action against individual (personal) licensees when failures are found”. In our previous blog, we discussed who (currently) needs to hold a PML, how PMLs drive corporate culture, the Gambling Commission’s proposed changes to PML requirements following the White Paper and the reasons for those potential changes.

With the spotlight on PMLs, in this blog we provide an overview of PML requirements and our top pointers for staying compliant.

PML requirements

One of the key challenges for PMLs is that, unlike many other regulated professions, there are no standards of: (a) conduct, performance and ethics; or (b) competence, which set out the minimum requirements. Instead, the PML regime is based on broad principles as detailed below. It is worth noting that if the Gambling Commission commences a licence review against a PML, it will be based on the PML’s failure to comply with the following licence conditions and/or expectations:

Licence conditions

There are three licence conditions attached to PMLs, set out in Part 3 of the LCCP, summarised as follows:

Licence condition 1: PMLs “must take all reasonable steps” when carrying out their responsibilities in relation to licensed activities to ensure they do not place their employer’s operating or premises licence in breach of their licence conditions. This is evidently broadly drafted and widely interpreted by the Gambling Commission.
Licence condition 2: PMLs must keep themselves informed of “developments in gambling legislation, codes of practice and any Commission guidance … relevant to their role”.
Licence condition 3: PMLs must report key events (see below) within 10 working days of becoming aware of the event’s occurrence.

“Expectations”

Additionally, section 4.3 of the Gambling Commission’s Statement of principles for licensing and regulation sets out the expectations of individuals occupying senior positions, whether or not they hold PMLs, to (amongst other things):

uphold the licensing objectives and ensure compliance of operations with the LCCP;
organise and control their affairs responsibly and effectively;
have adequate systems and controls to keep gambling fair and safe;
conduct their business with integrity;
act with due care, skill and diligence;
manage conflicts of interest fairly;
work with the Gambling Commission in an open and cooperative way;
disclose to the Gambling Commission anything which it would reasonably expect to know; and
comply with both the letter and spirit of their licence, the licence of their operator and associated Gambling Commission regulations.

PML key events

As set out in licence condition 3, PMLs are required to notify the Gambling Commission of the occurrence of certain key events, “within 10 working days after the licensee becomes aware of the event’s occurrence”. These are:

a change in name (for example, following marriage);
a change in address;
any current or pending investigation by a professional, statutory, regulatory or government body in Great Britain or abroad, and the imposition of any sanction or penalty against them following such an investigation (this would include another gambling regulator);
being subject to (a) any criminal investigation, or (b) conviction of any offence, listed under Schedule 7 – Relevant Offences of the Gambling Act 2005;
the imposition of a disciplinary sanction against them, including dismissal, for gross misconduct;
resignation from a position for which a PML is required following commencement of disciplinary proceedings in respect of gross misconduct;
disqualification from acting as a company director; and
the presentation of a petition for their bankruptcy or sequestration or their entering into an individual voluntary agreement.

Further guidance to PMLs about personal key events can be found here.

Online service and contact details

PMLs must ensure their registered contact details are accurate. In addition to this being a licence condition, it will ensure critical correspondence is not missed, including relating to any revocation (generally, for failure to undergo PML maintenance) or licence review.

When granted, we strongly encourage PMLs to register for the Gambling Commission’s Manage your personal licence online service for PMLs. This service allows PMLs to update contact details, submit key events and submit maintenance checks (see below).

PMLs:

must – personally – keep their registered email address up to date; and
should ensure the Gambling Commission’s email domain is trusted, to avoid emails going to junk or spam folders.

PML maintenance

PMLs are indefinite in duration, meaning that the licence does not renew or lapse.

PMLs are subject to a mandatory maintenance check every five years. This is an automatic process (not an application, as the Gambling Commission incorrectly describes it), the purpose of which is solely the provision of updated information about the PML, such as current address and position, and payment of the fee. It is for the Gambling Commission simply to check and record the information. As we have written previously, the Gambling Commission is not legally empowered to delay or put on hold PML maintenance on the misconceived ground that enforcement action is ongoing or imminent.

The Gambling Commission will contact PMLs by email to advise of the upcoming PML maintenance. We recommend that PMLs and any supporting compliance/licensing teams separately diarise the five-year anniversary. A failure to submit the PML maintenance check will result in the PML being revoked.

To complete the check, PMLs need to sign into the online service. PMLs cannot submit the maintenance check before the PML anniversary date, and have only 30 days from the anniversary date to submit the check. Upon submission, a fee of £370 needs to be paid.

At the time of writing, if a check is not submitted within 30 days, the Gambling Commission will send a notice of revocation by email, providing a further 28 days from this notice to complete the maintenance check, otherwise the PML will be revoked.

Tips for PMLs

Keep contact details up to date;
Ensure the “gamblingcommission.gov.uk” email domain is whitelisted;
Register for the online service;
Understand the meaning of a key event, including changes of name or address and criminal investigations (without charges);
Understand the PML licence conditions and expectations;
Document structured and unstructured training; and
Diarise the five-year maintenance check.

Tips for employers

Remind PMLs to provide personal contact details (i.e. not a work email address) to the Gambling Commission upon or shortly before departure from the business;
Provide or arrange for annual refresher training to be provided for PMLs on PML licence conditions and expectations (we can help with this!);
Keep a record of internal and external training provided to PMLs;
Diarise each PML’s five-year maintenance check for both the business and the PML;
If a PML leaves or changes roles within the business and they held a specified management office, the business needs to notify the Gambling Commission as soon as reasonably practicable, and in any event within five working days of the PML’s departure under the operating licence condition 15.2.1(4); and
Remind the PML to notify the Gambling Commission of their departure if they leave the business and update their contact details, if required.

Please get in touch if you have any questions or would like to discuss your training needs.

01Nov

Gambling Commission appoints new Commissioners

1st November 2023 Adam Russell 216

On 31 October 2023, the Department for Digital, Culture, Media and Sport (“DCMS”) announced the Secretary of State had appointed seven new independent Commissioners to the Gambling Commission, taking effect from 11 September 2023. Charles Counsell, Helen Dodds, Sheree Howard and Claudia Mortimore have been appointed for terms of five years. Lloydette Bai-Marrow, Helen Phillips and David Rossington have been appointed for terms of four years. Together with the existing Commissioners and Chair, Marcus Boyle, they form the Gambling Commission’s Board of Commissioners (the “Board”).

Appointment process

Earlier this year, DCMS advertised to fill six Commissioner vacancies, to include three appointees with expert experience in one of: consumer protection and insight; data science and digital innovation; and law enforcement. In the end, seven Commissioners were appointed rather than the advertised six.

The Gambling Commission’s job advert made clear that the Commissioners will have responsibility for:

Ensuring that the Gambling Commission fulfils its statutory objectives and duties;
Ensuring that any statutory or administrative requirements for the use of public funds are complied with;
Setting the overarching strategy for the organisation and making strategically significant decisions;
Setting organisational risk appetite and ensuring a framework for effective identification and mitigation of top risks;
Ensuring that the Board receives and reviews regular information and data concerning the management of the Gambling Commission;
Setting the overarching stakeholder engagement strategy;
Demonstrating high standards of corporate governance at all times.

Meanwhile, the job advert outlined the following essential criteria:

An understanding of the policy and/or legislative environment within which a regulator such as the Gambling Commission operates;
Evidence of working as part of a team towards a shared goal, including ability to make a strong personal contribution;
The ability to analyse complex material and take well-reasoned decisions;
A commitment to improving opportunities for people throughout the UK and access to people from a diverse range of backgrounds.

Various desirable criteria were also set out, including corporate experience in a regulated sector, regulatory experience and experience supporting organisational change (amongst others).

Seven new Commissioners

Both DCMS and the Gambling Commission have published biographies for the new Commissioners and we welcome the strong focus on equality, diversity and inclusion in addition to other relevant experience. We also welcome the appointments, particularly the diverse backgrounds including in commerce and other regulated industries (including law!), and hope that the Commissioners will support and build on the Gambling Commission’s recent efforts to improve relations with industry, acknowledging that better relationships lead to better and quicker regulatory outcomes.

Whilst not intended to be an exhaustive summary, an overview of each Commissioner’s biography is detailed below:

Lloydette Bai-Marrow is an anti-corruption expert and economic crime lawyer. She is the Founding Partner of Parametric Global Consulting, the Chair of the Board of Spotlight on Corruption and sits on the Legal Panel for Whistleblowers UK. She is also a trustee for the Unite Foundation, and a Member of the Conduct Committee of the Institute of Chartered Accountants in England and Wales. Lloydette is also a Co-Founder and Director of the Black Women in Leadership Network.
Charles Counsell OBE was the Chief Executive Officer of The Pensions Regulator from April 2019 to March 2023. Before this, he was the Chief Executive Officer of the Money Advice Service and Executive Director of Automatic Enrolment at The Pensions Regulator.
Helen Dodds OStJ is an international lawyer, consultant and board member. She is currently a board member of the Human Tissue Authority, a director and trustee of the St John’s Eye Hospital Group, a director of LegalUK, and an Honorary Senior Fellow of the British Institute of International and Comparative Law. Previously, she was a board member of the London Court of International Arbitration.
Sheree Howard has over 25 years’ experience of the UK financial services industry with knowledge of the process of regulation and a focus on risk management, audit and controls. She is currently the Executive Director of Risk and Compliance at the Financial Conduct Authority, and is a Fellow of the Institute and Faculty of Actuaries. She has also held senior positions in banking in areas of risk and compliance including at the Royal Bank of Scotland and Direct Line Group.
Claudia Mortimore has over 25 years’ experience of criminal law and regulation. After accumulating 10 years of experience as a barrister, she prosecuted drugs, tax and money-laundering offences for the Revenue and Customs Prosecutions Office and fraudulent trading offences for the Department of Business. She has also held senior positions in the Enforcement Division of the Financial Reporting Council.
Helen Phillips is an experienced executive and non-executive, with a career underpinning the public, private and not-for-profit sectors. Helen is currently appointed in a non-executive capacity as the Chair of NHS Professionals Ltd and Chair of the Chartered Insurance Institute. She is also concluding a nine-year term as Chair of Chesterfield Royal Hospital NHS Foundation Trust. Helen has also held various other positions within social work, education and environmental organisations.
David Rossington CB is a former senior civil expert. He has worked for the Department for Culture, Media and Sport as Finance Director and acting Director General. He has also worked for other Government departments including what is now the Department for Levelling Up, Housing and Communities.

Remuneration and Governance Code

The DCMS’ website confirms that Commissioners are remunerated at £14,160 per year (£295 per day) plus expenses, and that the seven appointments were duly made in accordance with the Cabinet Office’s Governance Code on Public Appointments (“the Governance Code”). The Governance Code requires the declaration of any significant political activity undertaken by an appointee in the last five years (e.g. holding office, public speaking, making a recordable donation or candidature for election); none of the appointees declared any significant political activity.

27Oct

Regulatory returns update: Gambling Commission conducting user research sessions

27th October 2023 Chris Biggs 213

In its fortnightly E-bulletin released earlier this week, the Gambling Commission called for licensees to sign up to its User research programme for the purpose of participating in upcoming regulatory returns user research sessions.

As we previously discussed, the Gambling Commission has recently signalled its intention to “sharpen” the dataset currently received from licensees in regulatory returns, increase the frequency of the reporting requirements and aligning licensees’ reporting dates (see its Making better use of operator data blog), which are proposals we very much welcome. The Gambling Commission also indicated that there would be a consultation on the frequency of regulatory returns in November.

User research programme

The user research programme, which is an initiative we welcome, has been introduced to help the Gambling Commission “test new services, websites and features with people who use them” and sessions can take place face-to-face, over the phone or remotely.

Getting involved may include:

responding to questionnaires: 5-10 minutes;
telephone or video call session: 60 minutes;
face-to-face session: 60 minutes; or
workshop: half a day.

You can register as a participant of the Gambling Commission’s user research programme here.

Registration takes approximately two minutes, whereby you will be required to provide your full name and answer general questions pertaining to your involvement in the gambling industry and use of the Gambling Commission’s services. This information will be used to select suitable participants for the regulatory returns sessions, as well as other research sessions.

Regulatory returns user research sessions

The regulatory returns user research sessions will, as the Gambling Commission states, help it “improve the data, while reducing the burden for operators”. The Gambling Commission has asked that a diverse range of licensees from all sectors sign up to the programme, as it will be hosting a series of workshops on the topic with the aim of producing “a more focused dataset”.

The Gambling Commission has not given further details about the regulatory returns user research sessions, nor an indication of when these sessions will be held. We expect that these sessions will take place very soon to inform the Gambling Commission’s consultation on regulatory returns, which we expect in November 2023.

Why participate?

As we discussed previously, in looking to update the regulatory returns system, the Gambling Commission has the opportunity to refocus its dataset and provide clarity and further guidance on the system. Doing so will ensure the evidence it collects from licensees is accurate and therefore useful. It is equally important to ensure the system is fit for purpose and there is consistency in the responses provided.

We encourage licensees and other relevant industry stakeholders to sign up and participate in the regulatory returns user research sessions, and to provide feedback to the Gambling Commission.

Please get in contact with us if you have any questions about the regulatory returns process.

22Sep

Gambling Commission establishes Industry Forum

22nd September 2023 Bahar Alaeddini 214

On 14 September 2023, the Gambling Commission announced the establishment of an Industry Forum, to be made up of representatives from the British gambling industry, with the role “to provide further insight into the views of operators… share industry views on areas such as account management, consultations and the Commission’s data programme.”

There will be approximately 10 cross-industry members.

The recruitment of a Chair will begin in September 2023, when the Gambling Commission will be inviting expressions of interest from industry to become a member. Details will be published on the Gambling Commission website.

We welcome this announcement. We also very much welcome that the Gambling Commission has listened with increased industry engagement, recognising that better relationships with industry leads to better outcomes. However, we make two important observations:

Why is the Industry Forum only being created now? It is: (a) nearly three years since the Gambling Act Review kicked off and the Lived Experience Advisory Panel was formed; (b) nearly six months since the publication of the White Paper; and (c) critically, the most important Gambling Commission consultations have already been published.

Cynically, it is titled a “forum”, which suggests the possibility (however remote) it may not be viewed with much value within the Gambling Commission itself. Why is the Industry Forum not placed on an equal footing to the Lived Experience Advisory Panel, Digital Advisory Panel and Advisory Board for Safer Gambling? The Lived Experience Advisory Panel is described by the Gambling Commission as “provid expert independent advice based on its members personal lived experience of gambling harms”. Putting aside the issue with this description and lack of members with positive experience (which I have written about previously and was raised by the DCMS Committee on 5 September 2023) why is the new forum not an “Industry Panel” providing “advice” to the Gambling Commission? Plainly, advice is just that and it can be ignored.

Further, as industry lawyers, we have not had any structured engagement with the Gambling Commission for two years since the last Industry Lawyers’ Group meeting in September 2021 (which used to meet once or twice a year) and even that had fairly limited value when the questions raised were not answered for six months.

Whilst we acknowledge, as Andrew Rhodes explained before the DCMS Committee on 5 September 2023, that the Gambling Commission has held more stakeholder engagements in the last year (220 to be precise), it appears to have been selective. In particular, it has excluded certain parts of the British gambling industry, including longstanding, experienced and balanced stakeholders and advisers, including us!

Industry lawyers are an important buffer between the Gambling Commission and applicants/licensees. This is perhaps most obvious in our immersion in compliance and enforcement. The Gambling Commission (in its current form) seems to confuse lawyers being unhelpful with lawyers acting on their clients’ instructions. Nowadays, the latter tends to require us to hold the Gambling Commission to account to comply with its own policies and procedures and the law. We very much hope the establishment of the Industry Forum will prompt the Gambling Commission to take a more strategic and holistic approach, and perhaps create, like other regulators, a framework for stakeholder engagement.

Whilst we are encouraged by the establishment of an Industry Forum, we are disappointed by its delay and remain keen to hear what other plans the Gambling Commission and its leaders have to engage with the industry and its stakeholders.

01Sep

Gambling Commission sets its sights on late regulatory returns and incorrect fee categories

1st September 2023 Gemma Boore 217

In its latest E-Bulletin, the Gambling Commission has reminded operators that it is a licence condition (15.3.1 of the Licence Conditions and Codes of Practice) to submit regulatory returns on time.

The update goes on to note that the Gambling Commission is aware that some regulatory returns have been overdue since 1 April 2023, and advises operators to bring these up to date “immediately”.

“Operators who fail to submit returns on time will be escalated to our Enforcement team to consider regulatory action and may result in a financial penalty under section 121 of the Gambling Act 2005.”

This is an important reminder from the Gambling Commission, which should not be taken lightly, and it is clear a tougher approach is now being taken.

Background

Gambling licence holders in Great Britain are required to submit a regulatory return for each type of activity for which they hold a licence.

Depending on licence type, regulatory returns must be submitted on a quarterly or annual basis. Quarterly returns must be submitted within 28 days of the end of each quarterly reporting period. Annual returns must be submitted within 42 days of the end of each annual reporting period.

All returns must be submitted via the online regulatory returns system within the Gambling Commission’s eServices Hub.

The Gambling Commission uses the information to publish bi-annual industry statistics and to inform its understanding of its licensees and the wider gambling industry. The information also helps the Gambling Commission ensure licensees are within the correct fee category for their licensed activities.

An imperfect system

The Gambling Commission publishes information on when and how to submit regulatory returns in its Regulatory Returns Guidance, which is split by licence type.

However, the guidance is simple, and a repetition of what is asked within the regulatory return forms. There is no additional detail as to the type of information that should be captured in the form, and where. The lack of clarity, in our experience, has sometimes resulted in incorrect data being provided with the regulatory returns, or being provided under the wrong licensable activity.

In our experience, licensees often require assistance with the following:

Non-GB revenues – they should only be reported if taking place in reliance on the Gambling Commission operating licence;

B2B online casino revenues that are not revenue shares – the form only allows for GGY (revenue share) to be reported, and not fixed fee revenues, although the Gambling Commission is now aware of this issue from us.

It is important that information provided in regulatory returns is accurate. If a licensee misrepresents or fails to reveal information that it is asked to provide, unless it has a reasonable excuse it will commit an offence under section 342 of the Gambling Act 2005.

Beware exceeding your fee category

Regulatory returns go hand in hand with ensuring a licensee is in the correct fee category and, recently, we have noticed an increase in the Gambling Commission using regulatory returns to identify and contact licensees that it believes have exceeded the upper threshold of their fee categories.

Fee categories are a licence condition, included on the face of an operating licence. Therefore, an application to vary the fee category must be submitted before the upper threshold has been exceeded and it is a licensee’s responsibility to proactively monitor its fee category to ensure the upper threshold is not exceeded.

We urge licensees to routinely consider whether they are approaching the maximum limit of their fee category and whether a change of fee category is warranted. Licensees should be aware that the fee category licence condition follows the licence year, and will not necessarily align with the regulatory returns reporting period.

The process for submitting an application to vary is relatively simple. The applications can be completed through the eServices portal and carry a fee of £40. It is important to note that:

fee category increases by one level do not require any supporting documentation;
fee category increases by two levels or more must be supported by:
- new or updated financial projections;
- new or updated business plan;
- evidence of how the expansion of the business is funded;
decreases in fee categories must be supported by a full explanation.

Gambling Commission working group

In order to address some of the issues with the regulatory returns system, the Gambling Commission has established a working group and is seeking feedback from licensees on the questions currently posed in regulatory returns.

The last time the regulatory returns process was reviewed was in 2020 when, following a Consultation on changes to information requirements in the LCCP, regulatory returns, official statistics, and related matters, the Gambling Commission simplified the regulatory returns processes. In its consultation response, the Gambling Commission also committed: (1) to publish guidance for regulatory returns (which went live on 4 May 2021); and (2) to improve the usability, accessibility and availability of the regulatory returns system.

Three years on, the system is under review again – but it appears there will be no consultation and, consequently, fewer licensees will be aware there is an opportunity to help shape forthcoming improvements.

Next steps

We strongly recommend licensees use the online contact form to tell the Gambling Commission about their concerns with the regulatory returns process, forms and guidance as soon as possible, so they can be improved.

We hope that the working group will use this, as well as our recent feedback on the Gambling Commission’s guidance, to improve the current system.

In the meantime, licensees should also:

submit any outstanding regulatory returns as soon as possible;

endeavour to submit complete and accurate regulatory returns within the timeframes set by the Gambling Commission. The Gambling Commission is taking a much tougher approach and late and/or inaccurate regulatory returns will be referred to the Enforcement Team; and

routinely review whether they are in the correct fee category and, if necessary, submit an application to vary before exceeding the upper threshold of a fee category.

Please get in touch if you have any questions regarding the regulatory returns process and/or if you would like our assistance preparing a regulatory return or changing your fee category.

With credit and sincere thanks to Jessica Wilson for her invaluable co-authorship.

27Jul

Source of funding: A glimmer of hope on the horizon?

27th July 2023 Jessica Wilson 232

It is no secret that source of funding has been an area of uncertainty and, often intense, frustration in recent years. Whilst source of funding is a mandatory aspect of the licensing lifecycle, there continues to be a distinct lack of clarity from the Gambling Commission as to what is expected from applicants, licensees, and their investors. In our view, this breaches the Regulators’ Code which requires the Gambling Commission to have clear information, guidance and advice to help those they regulate meet their responsibilities to comply. Without such guidance, insurmountable regulatory and commercial risks are attached to the British market, potentially rendering it unviable and unattractive for new entrants and their investors, particularly where they are financial institutions. In view of the importance of this issue to our clients and the industry generally, we submitted a freedom of information request to the Gambling Commission in March 2023. Coincidentally or otherwise, there is now a glimmer of hope on the horizon as the Gambling Commission plans to publish source of funding guidance this Summer.

What is source of funding?

Source of funding involves establishing the legitimacy of the source of the capital and revenue finance used in the licensee’s operation.

Disclosure is required to ensure (1) that the first licensing objective has not been compromised (preventing gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime), and (2) that the licensee or applicant is suitable to hold a licence (as detailed in the Gambling Commission’s Licensing compliance and enforcement policy statement), which includes “the resources likely to be available to carry out the licensed activities and the legitimacy of the source of the capital and revenue finance of the operation.”

When is disclosure needed?

The common touchpoints for disclosure to the Gambling Commission are:

operating licence applications – where “there is a positive obligation on applicants to show that they are able to satisfy the licensing objectives” and the Gambling Commission “will also wish to be satisfied as to the sources of the applicant’s finance to satisfy itself that such funds are not associated with crime or disorder.”
key event notifications following the taking of new loans / funding, or the disclosure of new shareholders; and
changes of corporate control.

Under section 122 of the Gambling Act 2005, the Gambling Commission may also request source of funding disclosure for the purpose of determining the suitability of a licensee to carry on the licensed activities.

The current requirements

Currently, there is no formal or detailed source of funding guidance setting out the Gambling Commission’s requirements and each case is considered on its merits.

From our extensive experience, we know that applicants and licensees are required, using a risk-based approach based on their knowledge of the investor and the size of the investment, to:

Follow the “breadcrumb trail” of money and provide documents (i.e. bank statements) to evidence the flow of funds from the original source, to the ultimate investment in the licensee / applicant.
Provide documentary evidence for the source of funding. This depends widely on the specific circumstances but, by way of example, if an investment was funded by:

a) a share sale, the SPA could be provided along with a bank statement showing receipt of the funds from the sale; or

b) personal savings, the Gambling Commission would wish to understand and see evidence as to how these savings had accrued and over what time period.

The onus is always on the gambling business, which can be challenging when the Gambling Commission rejects incomplete applications and the majority of the information can only be obtained from third parties; however, it is vital that they have used their reasonable endeavours to secure the necessary information.

Challenges and moving goalposts

Source of funding is a complex area, particularly if money has been raised through an investment fund with underlying limited partner (passive) investors, where often there are complex confidentiality agreements in place. It has also been known for gambling businesses to encounter investors who simply refuse to disclose their personal documents or are only willing to provide documents that are heavily redacted.

Ultimately, as set out in the Licensing compliance and enforcement policy statement, the Gambling Commission must “assess the likelihood of risk presented by and the potential impact that the risk if realised will have upon the licensing objectives.” In our view, this does not mean pursue a risk-free approach by testing every £.

Nowadays, the Gambling Commission’s expectations for source of funding are burdensome and follow a novel and unpublished approach (generally led by Forensics), often exceeding those of financial or other gambling regulators around the globe. In extreme circumstances, this creates tension between the gambling business and its investors, and the Gambling Commission and the gambling business (including us!). Published guidance is critical to ensure consistency and provide certainty to gambling businesses and their investors.

Glimmer of hope on the horizon

Turning to the positive, we understand that the Gambling Commission will be publishing guidance on its website regarding its source of funding requirements to “provide better information to applicants”. It is expected that the guidance will be published by the end of July 2023.

At this stage, we understand that the guidance will be non-exhaustive, but will include example scenarios, including those relating to investment funds.

We further understand that the guidance will explain how the Gambling Commission divides investors into two groups when determining its source of funding requirements:

a) Regulated – meaning entities that are regulated by any form of financial service regulator, including the Financial Conduct Authority and Securities Exchange Commission.

b) Unregulated.

For each group, the Gambling Commission will take either a percentage of the total value of the investment / transaction, or an investment amount (e.g. £50,000) and consider source of funding for investors that cross that threshold. Where investors do not fall within either category, the Gambling Commission will look to take a dip sample, which reflects our recent client work. We further understand that the Gambling Commission will want investors identified so it can carry out open source and online checks before deciding if further source of funding information is required for particular investors.

Of course, the exact detail of the guidance will not be known until it is published. We are hopeful that it will provide some clarity on the Gambling Commission’s requirements and explain the basis for such requirements.

How we can help

Harris Hagan can navigate you through your engagement with the Gambling Commission on source of funding, minimising disclosure for you and your investors wherever possible, as well as offer source of funding training, tailored to the specific needs of your business. If you would like to discuss further, please do get in touch.

27Jul

White Paper Series: Cryptoassets

27th July 2023 Hilary Stewart-Jones 229

Adopting the term cryptoassets as opposed to cryptocurrencies, the White Paper devotes little time to the fast growing consumer demand in the online gambling sector. The Department for Culture, Media and Sport (“DCMS”) acknowledges that there are no specific laws which preclude a customer’s use of cryptoassets to fund gambling, but indicates that it has thus far relied upon the Gambling Commission taking a “rigorous stance” against their use to date where: (i) they are used by end users as a means of depositing into online gambling accounts; (ii) the operator accepting the cryptoasset payment has raised funds via the issue of cryptoassets; or (iii) the business owners’ source of funds includes ownership and trading of cryptoassets. The net result, unsurprisingly, has been that currently the Government does not feel the need to intervene further with legislative changes, because there already exists a de facto ban for gambling usage. Sadly, this was a missed opportunity to oversee and probe the Gambling Commission’s application of its discretion, all the more so given that cryptoassets will be fully financially regulated in Great Britain in the not-too-distant future, and where their burgeoning use in offshore gambling will be another deterrent for end users in Great Britain to only wager with Gambling Commission licensees.

Plainly, the discretion afforded to the Gambling Commission on licence applications can give it a multitude of reasons to decline licence grant, only one of which may be a business plan/funding which includes cryptoassets. To that point, the Gambling Commission states in its Blockchain technology and cryptoassets guidance that its approach to assessing a licence applicant’s source of funds is to be sure that the business is not being funded by proceeds of crime and it needs the same level of assurance for all licence applications. The Gambling Commission further emphasises its position in this guidance:

“If you are considering using to fund a gambling business, we recommend that unless you are able to provide a full and complete history of with your application, do not submit as we will not consider Operating Licence applications with a crypto funding element without this evidence provided in full at application stage”

For existing licensees, the Gambling Commission’s controls are set out in licence conditions (“LCs”). LC 5.1.1 requires that:

“Licensees, as part of their internal controls and financial accounting systems, must implement appropriate policies and procedures concerning the usage of cash and cash equivalents (e.g. digital currencies) by customers, designed to minimise the risk of crimes such as money laundering, …”
“Licensees must ensure that such policies and procedures are implemented effectively, kept under review, and revised appropriately to ensure that they remain effective, and take into account any applicable learning or guidelines published by the Gambling Commission from time to time”.

In addition, licensees are required by LC 15.2.1(8) to notify the Gambling Commission as soon as reasonably practicable, and in any event within five working days, in circumstances where there is: “ny change in the licensee’s arrangements as to the methods by which, and/or the payment processor through which, the licensee accepts payments from customers using their gambling facilities…”. This is a notification, and not a clearance requirement, albeit there is no doubt that the Gambling Commission would investigate notifications that relate to licensees’ acceptance of cryptoassets. The DCMS assert that on data provided by the Gambling Commission that there have been “no instances” of licensed operators making a key event filing regarding cryptoassets. This is hardly surprising when the known response would be negative.

The implication suggested by DCMS/the Gambling Commission in the White Paper that licensees may have no desire to accept cryptoassets because of inherent volatility/bet closing values and transparency issues, is unlikely to be the root cause of this reluctance. It is far more likely to be due to their concerns about the negative attention they would attract from their regulator and potential for licence review. In this regard, most licensees remain painfully aware of a fine meted out to one operator in circumstances where it did not accept cryptoassets as payment but allowed a customer with a regulated (as a financial service) digital wallet to deposit with fiat, in which wallet there was a risk that cryptoassets may have been (but not necessarily had been) deposited. The Gambling Commission justified the censure as a demonstrable lack of AML due diligence by the operator on the payment service provider, merely because it allowed deposits in fiat and cryptoassets, in circumstances where the wallet was, as stressed, regulated and there was nothing to preclude its commercial offering of the product. If that comprises a gambling regulatory benchmark, then on a broad application surely it should also preclude a relationship with any number of banks/payment service providers, many of whom offer cryptoasset trading services? One has to ask, the funding and suitability issues aside (of which more below), what is the real concern? Most gambling operators who accept cryptoassets do not do so anonymously as all require a form of KYC/CDD/EDD to open an account. The larger operators also tend to only accept stable coins, and do not allow any form of trading exchange within the gambling ecosystem i.e. USDT in, USDT out. In short, a very limited scope for anonymous money laundering.

The Gambling Commission’s antipathy seems to be primarily rooted in cryptoassets’ opaque nature, having stated “the anonymity afforded by some , along with any weaknesses in the process of obtaining them, have consistently caused problems for applicants….”. However, this suggests that the cryptoasset itself can be tainted by a previous illegal use, despite the fact that the current cryptoasset owner would be fully disclosed to the operator and by extension (if requested) the Gambling Commission. Meanwhile, back in the real world, none of us can account for prior uses of all money in our bank accounts since the creation of that currency. For proceeds of crime/AML purposes one can understand that fiat monies can taint other fiat monies in a single account (where they cannot be separately identified) but not cryptoassets where each unit is separately reported in the blockchain. In addition, as can be inferred from Europol’s December 2021 report, the early adoption by criminals for payment in non-private cryptoassets for illegal activities (e.g. human trafficking and money laundering) through such transactions is actually on the wane. The report observes that unlike private coins where the ledger is obfuscated, there is with most types of reputable cryptoassets a public blockchain ledger, so that all trades are recorded: the detail retained therefore leaves a trail that cash could not. Indeed, as Europol emphasises, that ledger was key to unlocking the source of funds in several prosecutions, demonstrating that the prior users were neither truly anonymous nor untraceable. In any event in its conclusion, it points out: “….., the use of cryptocurrencies for illicit activities seems to comprise only a small part of the overall cryptocurrency economy, and it appears to be comparatively smaller than the amount of illicit funds involved in traditional finance.”

Both the DCMS and the Gambling Commission also allude to cryptoasset volatility and that such issues would impact gambling because of the problems of establishing financial limits and affordable gambling. However, again the criticism does not seem to be well thought through. A customer who has bought cryptoassets has presumably had the wherewithal to do so, affordability issues aside. If they then gamble with an element of the cryptoasset that goes up in value after the deposit but before any wager, then any safer gambling (“SG”) limits pegged to fiat (which could be easily imposed as a LC) would still snag before the sums were wagered, as the exchange rate could take place before play. If the volatility is in the licensee’s favour on pay-out (and it could go either way) the customer has still not lost any more than the SG limit set, which is entirely in line with the current loss limit philosophy that underpins the White Paper’s approach to consumer protection. In any event, the Gambling Commission should not ignore that cryptoassets are fast becoming a real and critical part of the world’s economy, and certainly the case for continued objection to licensees accepting deposits in fiat, where the known source is cryptoassets or there had been a digital wallet intermingling cryptoassets traded via a licensed exchange, seems antiquated. Meanwhile other regulators appreciate the need to accommodate change. The Markets in Cryptoassets (“MiCA”) regulation was passed by the European Union (“EU”) in May 2023. MiCA has four objectives:

to provide a legal framework to regulate cryptoassets;
to support innovation and fair competition;
to protect consumers, investors and market integrity; and
to guard against the financial uncertainty

These regulations will sit alongside the existing cryptoasset travel rule which requires entities enabling the exchange , transfer, sale or related financial services and safeguarding (the so called “VASP” services) to let the sender and recipient of cryptoassets have personal identifiable information of the other (legal name, address and account number) for all transactions over USD 1,000, or as determined by each Financial Action Task Force (“FATF”) member state (by way of example, the current U.S. rule is USD 3,000).

Whilst Great Britain is no longer part of the European Union, it is expected that it will ultimately pass legislation which will address the high risk nature of cryptoassets, to reach parity with high risk investment services (e.g. those requiring a consumer cooling off period) and to attach criminal offences to non-compliance (currently British-based firms providing cryptoasset services are obliged to register with the Financial Conduct Authority (“FCA”) and to comply with existing money laundering regulations and obligations). It is also notable other gambling regulators already have well advanced regimes for the acceptance of cryptoassets for gambling, albeit that the majority of the operators accepting cryptoassets have tended to cluster in traditional grey-market licensing hubs.

Despite this, and the moves for financial services regulation of cryptoassets already in motion, the Treasury Committee’s report Regulating Crypto, published on 10 May 2023 (the “Fifteenth Report”), instead called for cryptoassets to be regulated as gambling, emphasising that:

“… their price volatility exposes consumers to the potential for substantial gains or losses, while serving no useful purpose. These characteristics more closely resemble gambling than a financial service…”

Whilst one can understand there being a false sense of security for a volatile, albeit financially regulated asset (the so called “halo” effect) this proposal would put Great Britain out of step with the vast majority of other jurisdictions. Moreover, it would be the ultimate irony were the Gambling Commission be called upon to regulate an industry for which it plainly has the greatest mistrust Mercifully, the proposal does not have the support of Government and on the 19 July 2023, it made its response to the recommendations contained in the Fifteenth Report clear; cryptoassets would remain financially services regulated:

“Such an approach would run completely counter to globally agreed recommendations from international organisations and standard-setting bodies… …These recommendations are grounded in the principle of ‘same activity, same risk, same regulatory outcome’, meaning that any cryptoasset activity that performs a similar function, and poses similar risks, to those in the traditional financial system (for example, operating a trading platform or providing custody services) are subject to regulation that ensures equivalent outcomes.
The Committee’s proposed approach would therefore risk creating misalignment with international standards and approaches from other major jurisdictions including the EU, and potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission.”

In conclusion, the dithering over cryptoassets and gambling needs to stop. Again, time has been lost with the distraction over the Fifteenth Report. Some online casinos accepting cryptoassets have reported gross gambling revenue of USD 2.6 billion for 12 months trading alone, so the product is clearly of appeal. One cannot simply assume that all or a majority of those end users have nefarious intentions. Given the ongoing profits of fiat-only operators too, one must also assume they are reaching an as yet untapped gambling demographic. The Treasury Committee report noted that in Great Britain alone 10% of adults hold or have held cryptoassets, with the majority of those concluding that it was a “fun” asset and where the transaction costs were considerably less than with fiat transfers. Given this is no longer: (a) a niche pastime; or (b) the preserve of criminals only, the Gambling Commission would be advised to give priority to what would comprise adequate safeguarding for cryptoasset usage in gambling rather than de facto fettering its discretion and imposing an outright ban. In addition, the longer the wait the less likely it is for governments and regulators to adequately anticipate/safeguard against the next wave of technology advancements in the cryptoasset space. The sooner the dialogue and the desire to find middle ground starts, the better.

With thanks to David Whyte and Gemma Boore from Harris Hagan for their invaluable co-authorship.

See paragraph 135 on page 68 of the White Paper.

See the Gambling Commission’s Blockchain technology and cryptoassets guidance note.

In this regard DCMS is using the terminology also used by the Gambling Commission, which had in turn adopted that used by the Treasury Committee (see its Twenty-Second Report of Session 2017-19 published September 2018).

26Jul

White Paper Series: DCMS and the Gambling Commission launch public consultations

26th July 2023 Adam Russell 205

On 26 July 2023, the Gambling Commission and DCMS both launched the first three public consultations concerning proposals contained in the White Paper.

DCMS

DCMS have launched two consultations, which will focus on the following areas:

Proposals for a maximum stake limit for online slot games. This consultation will last for 8 weeks and closes at 11:55pm on 20 September 2023.
Proposals for measures to adjust outdated regulatory restrictions applying to the land-based gambling sector. This consultation will last for 10 weeks and closes at 11:55pm on 4 October 2023.

The Gambling Commission

The Gambling Commission’s consultation will consider various proposals relating to the following areas:

Improving consumer choice on direct marketing.
Strengthening age verification in premises.
Remote game design.
Remote gambling: financial vulnerability and financial risk.
Extending Personal Management Licences requirements.
Changes to Regulatory Panels.

The Gambling Commission’s consultation will last for 12 weeks and closes on 18 October 2023.

Next steps

We strongly encourage all licensees and stakeholders to review and respond to the consultations and will be publishing further articles when we have considered fully the content and proposals contained therein. Please get in touch with us if you would like to discuss this matter further or require our assistance preparing responses.

21Jun

Evidence gaps and priorities 2023 to 2026

21st June 2023 Ting Fung 210

Alongside the Government’s anticipated work on evidence gaps identified in Public Health England’s review, the Gambling Commission unveiled its Evidence Gaps and Priorities (the “Document”) last month on 23 May 2023. The publication duly follows the topic of research, education and treatment (“RET”) set out in the White Paper (Chapter 3: The Gambling Commission’s powers and resources) and the aim for the Gambling Commission to “build on the expansion of datasets it collects from operators for regulatory purposes to develop a rich resource that will strengthen the evidence base on gambling and inform data-led regulatory action”; inclusive of an exploration on how anonymised regulatory data can be shared with researchers.

Nevertheless, Tim Miller (Executive Director of Research and Policy) underlines in his introduction, that the Document is “not only about the Commission and what we need to do… about highlighting the challenges ahead and asking the questions that need answering. Answering those questions is something we can all play a part in.”

The Document sets out six existing areas or “evidence themes” that the Gambling Commission will prioritise in making a concerted effort in to strengthen the evidence base. We set out below a summary of and links to each.

1. Early gambling experiences and gateway products

About: understanding early gambling experiences and journeys of those aged 24 and under, otherwise vulnerable and generally, including engagement with and the influence of new non-gambling products that share similarities with gambling.

Gambling Commission on what is needed: increased research with “a longitudinal aspect” and linked operator data with a focus on younger gamblers for the exploration of patterns in remote, regulated gambling (although the Gambling Commission does not specify from whom).

Gambling Commission example research questions:What prompts different people to start gambling? How does gambling behaviour change over time as children become young people and young adults? What is the impact of major betting events, such as the World Cup or Grand National, on new gamblers?

Gambling Commission focus: continuing research with children and young people, with an expansion to cover 17-year-olds; building on research to explore the gambling journeys of young people to further develop understanding of how consumers are introduced to products and activities that are new to them.

2. The range and variability of gambling experiences

About: further exploration of customer journeys including, gambling habits and behavioural changes over time; the wider context of the individual customer, their life and how gambling overlaps with other behaviours and experiences.

Gambling Commission on what is needed: a mixture of data sources to explore them, with qualitative research; access to a wide range of anonymised datasets.

Gambling Commission example research questions: What do we know about the spectrum of gambling activity and what constitutes ‘safe’ gambling? How does gambling fit into a gambler’s wider online activity or life? How and why do people’s gambling habits and behaviours change over time?

Gambling Commission focus: use of the new Gambling Survey for Great Britain to improve understanding of gambling participation at a national level and in sub-groups of interest; building on the key parts of the Path to Play framework to add depth and insight; developing strong foundations for future research, for example establishing recontact samples for longitudinal research.

About: gaining a better understanding of the different ways that consumers can experience harms; an ability to identify consumers who may be more vulnerable or at risk of experiencing harms.

Gambling Commission on what is needed: “significant resources to investigate many of these sub-topics is likely to require a blend of evidence from longitudinal, co-produced research with people with lived experience of gambling-related harms, account data and in-depth qualitative sources to gain a better understanding.”

Gambling Commission example research questions: Which individual circumstances (situations or demographics) increase vulnerability to gambling-related harms? What’s the relationship between gambling-related harms and different co-morbidities? What is the impact on ‘affected others’ (adults and children) of gambling-related harms? What interventions are effective in reducing gambling-related harms?

Gambling Commission focus: using the Gambling Survey for Great Britain to produce robust statistics on who is experiencing gambling-related harms; qualitative research with consumers with experience of gambling-related harm; using Gambling Commission datasets and wider evidence to identify groups that may be at greater risk of harm.

4. The impact of operator practices

About: understanding the influence of common operator practices on consumer behaviour; assessing the effectiveness of interventions designed to detect and reduce gambling harms.

Gambling Commission on what is needed: various sources of data including operator-held account-level data suitable for detailed analysis, qualitative data, and potentially longitudinal data.

5. Gambling Commission example research questions: How can marketing and safer gambling practices be incorporated effectively together as part of a seamless player experience? How well do consumers understand information (for example, about offers or products) provided to them by operators? How effective are harm detection algorithms used by online operators? What are the factors that drive and influence consumer’s perception of whether gambling is fair and can be trusted?

Gambling Commission focus: gaining greater access to operator-held account-level data to further explore the impact of operator practices.

6. Product characteristics and risk

About: improving understanding of which products and behaviours carry greater risk of harm, for whom, and why; gaining a deeper understanding of how consumers interact with different products and links to gambling harms; identifying areas of new or emerging risk and building a strong understanding of changes in the market.

Gambling Commission on what is needed: Research that identifies markers of harm and increased risk, with examples including examining real-time account activity data, opportunities created through data linkage, or robustly evaluated product trials in live environments.

Gambling Commission example research questions: Are certain product characteristics associated with gambling-related harms? Do some product characteristics disproportionately affect certain types of gamblers? How can gambling products be designed to mitigate the riskiness of game characteristics without compromising enjoyment? How do people’s patterns of play vary between products?

Gambling Commission focus: gaining greater access to operator-held account-level data to further explore patterns of play; using secondary analyses of existing datasets to further our understanding of product risk.

7. Illegal gambling and crime

About: understanding links between gambling and criminal activity; understanding crime as a dimension of gambling-related harm; improving knowledge of the extent and impact of the unregulated market.

Gambling Commission on what is needed: Given the secretive nature of criminal activity, a requirement for more specialised and focused research methods, with greater reliance upon new and existing partner organisations and new tracking techniques identified within the gambling landscape section.

Gambling Commission example research questions: What is the extent of criminal activity to fund gambling activities? What is the size of the illegal market, and what’s the impact on British consumers? What is motivating consumers to gamble on the illegal market? How easy is it for consumers to tell that they are using an unregulated operator?

Gambling Commission focus: research into consumers’ understanding and use of unlicensed illegal gambling operators; using the Gambling Survey for Great Britain to develop understanding of the commission of and victims of crime as a dimension of gambling-related harm.

In order for this projected work to be impactful, it will be important for the Gambling Commission to emphasise effort on the aspects for which it has been criticised. It has acknowledged this in part through acknowledgment of the need for more qualitative data, including increased longitudinal research. However, this needs to be more than just lip service and as the Document already recognises, these efforts must work in conjunction with other areas of evidential weaknesses highlighted in the White Paper in respect of gambling research. These include: making full use of the UK Research and Innovation (UKRI) funding to increase the number of studies on gambling behaviour, with the aim of attracting wider interest from academic and research institutions in order to generate more high quality and peer-reviewed research.

In addition, it could be inferred from the White Paper that Government views the Gambling Commission’s main strength in relation to RET to be its access to datasets it collects from operators. Therefore, it will be interesting to see the development of the Gambling Commission’s focus in this area (as highlighted in sections 4 and 5 above) not only in terms of scope and methodology but also its exploration on how anonymised regulatory data can be shared with researchers.

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