On 1 April 2020 the Gambling Commission published its annual business plan for 2020-2021. Inevitably this was drafted prior to the onset of the Coronavirus crisis and the ensuing shutdown of all land-based gaming in the UK, although the Gambling Commission has said that it will review the plan at the end of the first quarter, and publish a revised plan if considered appropriate.
In our blog last week I expressed disappointment at the Gambling Commission’s response to the current crisis and suggested a number of measures that complete shutdown of all venues, mass furloughing, redundancies, coupled with continuing costs and zero revenue. Aside from arcane activities such as Russian table tennis there is no mainstream sport on which to offer bets, so the online industry is also affected to a considerable extent.
No such measures have been adopted by the Gambling Commission. Instead, there has been a series of warnings issued to the industry, including a message from Neil McArthur, the CEO, on 25 March 2020. Whilst recognising the impact on the industry of the crisis and referring to a planned assessment of that by the Gambling Commission, in common with his foreword to the business plan, Neil McArthur refers to evidence of an increase in online slots, poker, casino gaming and virtual sports. This is followed by a warning which in effect summarises operators’ obligations under the law and regulations, following the phrase “I want to make the Commission’s expectations absolutely clear”. As regulator, it is perhaps timely to remind operators of their responsibilities. However, while the negative inference here is that there is an increase in gambling overall, the reality is more likely that there is a spike in those products which remain available online, which is more than matched by the disappearance entirely of many others, and the closure of land-based venues.
Similarly, in his foreword to the business plan, Neil McArthur states: “gambling related harm must be drastically reduced”. It is well known that the levels have been static for many years; in fact, they have slightly reduced over the past 10 years. Of course, in an ideal world, no-one would be harmed by gambling. The numbers should be reduced, which is, on any view a laudable aspiration, given we are talking about 400,000 people. Unfortunately, the suggestion that gambling harm must be “drastically” reduced is not only also probably unrealistic, it suggests that it is out of control, which it is not. Once again, this statement risks harming the reputation of the industry and the level of public confidence in it, at a time when the future of certain sectors is in doubt.
The foreword continues with a statement that if operators cannot protect customers from harm the Gambling Commission will suspend and revoke licences. This is standard fayre, but once again the Gambling Commission has expressed its intention to “get even tougher”. This is an indication of an even stricter approach to enforcement. We believe that this may mean even higher financial penalties, fewer regulatory settlements, with more referrals to regulatory panel and possibly more licence revocations in the most serious cases. Most importantly, licensees should be prepared for many more suspensions of licences at the beginning of the enforcement process.
There is a good news story to note. Following collaboration between three industry working groups, the Gambling Commission and the Betting and Gaming Council (the “BGC”), the UK industry has agreed to a series of safer gambling measures, including:
- to ensure that VIP players are over 25 and subjected to spending, safer gambling and enhanced due diligence checks;
- to set a minimum 2.5-second spin speed on all slots by September 2020 and remove addictive features, such as slam stops and turbo buttons, as well as split-screen features; and
- to improve its use of customer data to target advertisements on social media away from vulnerable groups, rather than towards potential customers, as well as creating media only primarily attractive to those over the age of 25.
In their announcement of this development, reported in more detail in our blog yesterday, the Gambling Commission have welcomed the progress made by collaboration with industry, with encouraging and positive remarks about significant progress. There is always more to do, as indeed the BGC acknowledge.
However, the Gambling Commission has accompanied their announcement with comments from Neil McArthur which has in effect downgraded the good news aspect and undermined the good work done by the industry and the new BGC by stating that: “the proposals do not go far enough and we will now consider what additional measures we should impose on operators.” So instead of accepting that this first collaboration has been successful, the industry is pilloried yet again. This further encourages public opprobrium and demonstrates the degree of responsibility that lies with the regulator for the public perception of gambling. It is then followed by another unnecessary threat that risks reputational harm: “Ultimately actions speak louder than words and any operator that does not put consumer safety first will find itself a target for enforcement action.” These remarks dominate and destroy the positives, calling into question whether in such attempted collaboration the Gambling Commission can be regarded as a trusted partner.
This is profoundly disappointing. When even a good news story is translated into further criticism of the industry and threat of enforcement action in relation to new agreed measures not yet even in force, one has to question whether the Gambling Commission has joined the ranks of the anti-gambling lobby. Of course, it should encourage further collaboration with a view to having a well-regulated industry that protects its consumers and the wider public, and take a firm line against those who do not comply with their obligations. But it is not the job of any regulator to wage a publicity campaign against an entire industry. Indeed, to do so, particularly in the midst of a crisis, and as a result continually erode public confidence in the industry, is not only improper, it is likely to raise questions about confidence in the Gambling Commission as regulator.
The Gambling Commission’s own Statement of principles for licensing and regulation requires the Gambling Commission to regulate gambling in accordance with the Regulators’ code “in a supportive, straightforward, risk-based and transparent manner”. In the current crisis, in its recent actions and publications there is little evidence of it being supportive or straightforward. Those on the receiving end of its enforcement action may also question its transparency. It is certainly taking a novel approach to the “need to maintain public confidence in the gambling industry”, as it is obliged to do.
For regulation to be effective it requires a healthy and collaborative working relationship between regulator and those whom it regulates. Playing to the gallery, the press and those who would abolish gambling risks creating an atmosphere of mistrust and suspicion. The Gambling Commission justifiably wants to make gambling fair and safe for all to enjoy. Progress can be made more effectively and speedily by developing the sort of measures just announced in working together with the industry and those who represent it. If, however the industry cannot trust the Gambling Commission to approach such cooperation in good faith, then the future is bleak.
A more detailed blog on the Gambling Commission’s new business plan will follow next week.