Regulatory returns are under the microscope – but will the key issue be missed?
The Gambling Commission’s Director of Research and Statistics, Ben Haden, posted a blog on 6 October 2023, entitled Making better use of operator data.
In the blog, Haden explains that, following industry discussions at the Setting the Evidence Agenda Conference on 9 March 2023, and as hinted at in the Gambling Commission’s Evidence gaps and priorities 2023 to 2026 publication in May this year, the Gambling Commission is introducing two new measures over the next six months that are intended to enable it to gather more detailed operator data.
Measure 1: “Sharpening” the data currently received from licensees in regulatory returns by “removing a significant number of items which are out of date or not useful”; increasing the frequency of reporting requirements for many licensees, from annual to quarterly; and aligning reporting dates.
Measure 2: Commencing a pilot to receive a more detailed “daily aggregated consumer data” from operators (meaning aggregated transaction data over the course of a day – not on a per transaction basis).
According to Haden, Measure 1 will be subject to public consultation in November.
In this article, we discuss Measure 1 and consider its effectiveness in the absence of improvements being made to the current regulatory returns system.
In our recent blog on regulatory returns, we highlighted that the Gambling Commission is taking a tougher approach to regulatory returns and, in particular, will escalate to its Enforcement team any operator which fails to submit its regulatory returns on time. As a reminder, it is a licence condition for all licensees to submit regulatory returns on time (15.3.1 of the Licence Conditions and Codes of Practice). Separately, we understand that the Gambling Commission has established a working group which is seeking feedback on the questions raised in the regulatory return form.
Regulatory returns are clearly therefore under the microscope internally at the Gambling Commission – but what is going to change?
Proposed changes to regulatory returns
As mentioned above, Measure 1 will be subject to public consultation in November 2023. For now, therefore, we have only a generic outline of the proposed changes.
Proposal 1: Certain (out of date and/or not useful) questions to be removed.
We agree that less is more, but will the Gambling Commission also take the opportunity to review the remaining questions and related guidance, to ensure it elicits the correct responses from licensees?
Proposal 2: Frequency of reporting to increase for many licensees.
This change would only apply to licensees that are currently required to submit annual returns, which include (but are not limited to) the following licences:
- Adult gaming centre
- Betting (limited) (non-remote)
- Betting (standard) (non-remote and if less than 50 premises)
- Betting intermediary (non-remote)
- Bingo (non-remote)
- Gambling software (ancillary, non-remote, remote and linked)
- Pool betting (non-remote and remote)
The full list of licences and the current frequency of reporting can be found here.
Proposal 3: Regulatory returns reporting dates to be aligned.
We expect the Gambling Commission will require all licensees to submit regulatory returns at the same time, rather than in line with (for example) their own financial reporting periods.
These proposals follow the Gambling Commission’s previous efforts, in 2014, to align regulatory returns (for all licensees) to a periodic reporting frequency from 1 October, the original date the point of consumption licensing regime was due to be implemented. The rationale of these proposals was explained in the Gambling Commission’s Review of remote casino, betting and bingo (‘RCBB’) regulatory return and gambling software regulatory return consultation response, in August 2014. The proposals were abandoned following the judicial review that delayed the implementation of the new regime.
Technology is only as good as the data put into it. Doesn’t the same apply to the Gambling Commission?
Haden opens the blog by stating:
“Operator data is a rich resource in terms of ensuring how we understand how the market is developing, appreciate how interventions we make are (or aren’t) having an impact and at a fundamental level ensure we charge the right fees and can forecast and manage income and finances.”
and concludes it by asserting that:
“better evidence driven by better data, will lead to better regulation.”
Whatever the Gambling Commission’s aims, its intention to collect better industry data is laudable; we cannot argue that better evidence and data should lead to better regulation. However, as we have discussed previously, the current regulatory returns system is imperfect and lacks detail. This lack of clarity has, in our experience, sometimes resulted in incorrect data being provided with the regulatory returns, or being provided under the wrong licensable activity.
This is of course a serious concern from the licensee’s perspective, as it is an offence under section 342 of the Gambling Act 2005 for a licensee to misrepresent or provide false information to the Gambling Commission without reasonable excuse. However, it also raises concerns regarding the quality of data being collected by the Gambling Commission – and thus the reliability of the conclusions drawn therefrom.
The Gambling Commission is right to acknowledge that operator data is a potentially rich resource, but the quality (or otherwise) of the data collected will be key to ensuring that it can be relied upon by the Gambling Commission. Whether data is to be used to calculate correct fees, to manage income and finances, or to identify and evaluate market change does not matter. If the data provided to the Gambling Commission by licensees is incomplete or inaccurate, it will cast doubt on decisions taken by the regulator and may lead to the wrong regulatory outcomes.
When it consults on Measure 1, we hope the Gambling Commission will at the same time propose (and consult on) changes to:
- the remaining questions that are posed in regulatory returns; and
- the associated guidance,
to ensure there is little to no ambiguity between licensees as to what data should, and should not, be provided.
By taking the time to get the regulatory returns process right now, the Gambling Commission could make significant gains in the future, by ensuring that the datasets it collects going forward are as accurate, and therefore useful, as possible.
Licensees should look out for the Gambling Commission’s consultation on Measure 1, which is due to be published in November 2023. Once the consultation is open, we recommend licensees to respond and use the consultation as a platform to raise other concerns about the regulatory returns system, even if they are not specifically raised by the Gambling Commission. In the meantime, licensees can also contact the Gambling Commission about the regulatory returns process by completing its online contact form.
Please get in touch if you have any questions regarding the regulatory returns process or if you would like our assistance preparing a regulatory return.
With credit and sincere thanks to Gemma Boore for her invaluable co-authorship.