11Jul

White Paper Series: Update from the Gambling Commission

11th July 2023 Jessica Wilson 266

On 7 July 2023, Tim Miller, Executive Director of Research and Policy at the Gambling Commission, published an update on the Gambling Commission’s plans for implementing its 24 key actions as detailed in the Government’s White Paper. The update follows the Gambling Commission’s virtual briefing held on 5 July 2023 for operators.

Web content

Miller reiterated that the Gambling Commission has already completed its first deliverable by launching its White Labels Hub, which gives a consolidated guide to White Labels. Please see our blog for further details. Miller confirmed that the Gambling Commission intends to publish web content regarding its approach to vulnerability in July 2023.

Data and evidence

Miller explained that the Gambling Commission is progressing its work to improve evidence and data for gambling in Great Britain, which is a part of its commitment to the Gambling Review. Miller highlighted the publication of the Gambling Commission’s three-year Evidence Gaps and Priorities Review as evidence of its progress.

Consultations

The most anticipated next step is publication of the Gambling Commission’s consultations. Miller confirmed that the Gambling Commission intends to publish six consultations later this month (July 2023), four of which relate to measures detailed in the White Paper. The Gambling Commission expects most of the consultations to last 12 weeks, with closing dates in October.

The consultations relating to the White Paper measures are as follows:

Age-verification in land-based premises: Including test purchasing by small bingo premises, adult gaming centres and betting operators, and updating the ordinary code from Think 21 to Think 25.
Remote game design: Including changes to the Remote Technical Standards and building on the Gambling Commission’s previous work on online slots.
Direct marketing and cross-selling: Including proposals to amend the social responsibility code regarding marketing to enhance consumer protection.
Financial risk and vulnerability checks for remote operators: Including the proposed defined thresholds for financial risk checks, transparency requirements and a timetable for implementation.

The two additional consultations are:

Rules about Personal Management Licences: Proposal to clarify and extend the requirement to hold a PML for certain functions.
Procedures for Regulatory Panels: Proposal on a package of changes in relation to regulatory panels, including amendments to the Statement of Principles.

Miller explained that the second tranche of White Paper consultations will take place before the end of the year, likely in Autumn 2023, including consultations on socially responsible inducements and gambling management tools. Pre-consultation engagement is expected to begin in the coming weeks.

Statutory levy

Miller’s blog highlighted the Gambling Commission’s role regarding the statutory levy, a pillar reform from the White Paper. He confirmed that whilst the Government will lead the creation of the statutory levy, the Gambling Commission’s role will be about administration of the levy, including collection and distribution. Miller explained that, once the levy is introduced, the Gambling Commission’s list of approved organisations for RET payments will likely no longer be relevant or needed. The Gambling Commission also needs to consider the impact of a levy system on the destination of any future regulatory settlements.

Gambling Commission’s role

Miller reiterated that the Gambling Commission continues to support Government with the work on the White Paper and Gambling Review, and that they will continue to monitor the progress of the industry to deliver voluntary commitments.

“Full implementation of the will be a job of several years, especially when you include evaluating the impact of any changes. But that doesn’t mean we don’t want to progress things as quickly as possible. We are determined to make progress at speed”.

We look forward to seeing the next steps of the Gambling Review being put into action. Once the first tranche of consultations is launched in July 2023, we strongly encourage the industry to participate and would be delighted to assist with preparing responses.

03Jul

White Paper Series: Cashless payments – finally bringing the land-based sector into the digital age?

3rd July 2023 Bahar Alaeddini 289

In the year ending March 2021, nearly £910 million was generated from gaming machines in Great Britain (excluding those located in pubs). In total, there were nearly 170,000 gaming machines located in bingo premises (41%), adult gaming centres (35%), betting premises (15%), family entertainment centres (8%) and casinos (4%). In the period April 2020 to March 2021 (during the pandemic), the largest revenues, by a country mile, were generated by gaming machines located in bingo premises (41%) and adult gaming centres (35%), with revenues slowly declining in most sectors. There is no reliable data on the number located in pubs, or associated revenues, but the figure is likely to be in the region of 70,000.

A lifeline in the White Paper is the proposed review of cashless payments on gaming machines with the plan to remove the current legislative prohibition, set out in the Gaming Machine (Circumstances of Use) Regulations 2007 (the “2007 Regulations”), banning cashless payments directly on gaming machines.

The original purpose of the prohibition was to protect players from over-spending as it was assumed players would have more control over their play if they were playing with cash, providing natural interruptions in play by stopping their gambling to obtain more cash. The lack of a break in play is viewed as a lost opportunity for the player to consider whether they wish to continue to play and spend more.

The lifeline offered in the White Paper is hugely positive and could result in the long-overdue modernisation of the land-based sector, bringing it into the digital age.

Cash is dead

Since the 2007 Regulations, especially with the advent of contactless payments and global pandemic, non-cash payments have grown exponentially. Use of cash has declined across society with the expectation that it will not be used by 2035. In 2011, 72% payments in pubs were made by cash and, in 2020, this reduced to only 13%. In 2021, almost a third of all payments in the UK were made using contactless. This societal change has negatively impacted the land-based sector beyond belief, and it has been compounded by pubs no longer giving cashback and ATMs being removed. We now live in a world where hardly anybody uses cash. I – almost exclusively – use Apple Pay and regularly leave the house without cash or a bank card!

The restriction on using debit cards directly on gaming machines (credit cards are banned) has meant the land-based sector has been left behind. Whilst industry has been creative and found ways to make indirect debit card payments and protect players (in collaboration with DCMS and the Gambling Commission), take up has been slow and these are “not a fix-all solution”.

2018 Gambling Commission cashless advice

In March 2018, and in response to significant payment innovations in the retail economy, the Gambling Commission published advice on cashless payments in gambling premises (which remains in force), crystallising its position and key considerations for operators, as follows:

tracking play and collecting better data on player behaviour to make an informed assessment of those at risk of gambling-related harm;
providing tailored safer gambling information to players including transactional information on money spent/withdrawn;
player-led controls to enable better self-management such as a player’s own spend or withdrawal limits; and
the importance of gathering data both before and after the implementation of any measure to demonstrate the impact of control measures.

The guidance places responsibility squarely on operators to consider what measures are most effective and appropriate to their businesses. Further, it acknowledges the lack of evidence to suggest the optimum duration of a break, but sets out the expectation that, wherever possible, players should at least cease gambling and physically leave the gaming machine. Where players can access new gambling funds with only a limited or no physical break from the gaming machine, operators must nevertheless ensure players are otherwise provided a break from, or an interruption in, gambling before those funds can be used. The guidance also states the Gambling Commission “may consider taking regulatory action in individual cases if, for example, an operator was to increase the risk of harm to its customers without providing appropriate mitigations.”

DCMS will work with the Gambling Commission to develop “specific consultation options for cashless payments” (expected Summer 2023). DCMS is clear that any new or additional player protection measures will need to be in place before the legislative prohibition is lifted.

The Gambling Commission’s view is that the onus is on industry to demonstrate cashless payments can be offered without increasing gambling harm or crime. So, what does this mean for industry?

The White Paper has created a staggering volume of work for both DCMS and the Gambling Commission. As such, all proposals will not be treated equally, and a sceptical view is that cashless will not be a priority. As an important lifeline, it will require great effort by industry to keep it high on the agenda for DCMS and the Gambling Commission. One way to achieve this would be through an industry code, backed by evidence wherever possible, and promoting the associated benefits of cashless payments given, for example, low test-purchasing scores for gaming machines in alcohol-licensed premises. The greater the industry support, the more likely it is the proposed reform will be delivered in a timely, sensible and workable way.

Cashless industry code

Two of the challenges of developing an industry code are, firstly, gaming machines are in different types of gambling premises (each with their own unique “person, product, place” considerations), highlighting the difficulty of agreeing standards or codes of practice. By way of example, pubs are not regulated premises by the Gambling Commission. They are automatically entitled to offer gaming machines as part of their alcohol licence granted by the local licensing authority. Pubs and gambling premises will very likely have different baselines and priorities, and industry must inevitably set higher standards. The industry is better placed to do so and both DCMS and the Gambling Commission will expect them rise to the challenge. It is unclear what this means for pubs, particularly given their unsupervised nature, but given the 84% test purchasing fail rate (in 2019), they would be best placed to embrace a cashless industry code through amendment of the Social Responsibility Charter for Gaming Machines in Pubs issued by the British Beer and Pub Association.

Secondly, there are several types of cashless payment technologies each with different functionality. Unless banks facilitate player protection tools (for example, through online banking), physically or virtually presenting a debit card is very different from using a cashless gaming app or eWallet which connects to a gaming machine.

A practical solution would be to develop a cross-sector industry cashless code to reflect best practice and aim to install a minimum set of standards to address issues of risk. The central commitment would be to allow cashless payments whilst minimising the risks of gambling-related harm and protecting players. Standards may include the following:

a meaningful forced delay before the funds can be used (for example, 2 minutes, although in a cross-sector industry code it might be sensible to steer away from prescribing a timeframe);
personalised financial limits (deposit/spend) with clear messaging and calls to action;
personalised time limits with clear messaging and calls to action;
time and money spent totals with clear alerts;
prescribed maximum deposit in a single transaction or day etc.;
time-outs;
transaction history (ideally, searchable by last 24 hours, last week, last month etc.);
self-exclusion;
safer gambling messaging;
tracking player data to provide targeted messaging and/or interventions;
automatic disconnection from the gaming machine after inactivity with credit returned;
digital age verification to prevent underage gambling;
withdrawals must only be made to registered / the same card; and
restricted to one debit card.

Once agreed with DCMS and the Gambling Commission, compliance with the industry code could be incorporated as a licence condition in the Licence conditions and code of practice and/or gaming machine technical standards.

At the appropriate juncture, we will of course be happy to assist clients with their responses to the consultation where that would be helpful.

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

26Jun

White Paper Series: DCMS speaks at IAGA 40th Annual Gaming Summit in Belfast

26th June 2023 Harris Hagan 249

On 21 June 2023, Ben Dean, Director of Sport and Gambling from the Department for Culture, Media and Sport (“DCMS”) participated in the International Association of Gaming Advisors (“IAGA”) 40^th annual International Gaming Summit in Belfast.

Dean delivered a keynote and joined the subsequent panel discussion on the Government’s plan for reform of gambling regulation following the review of the Gambling Act 2005, and its potential impact on the future of the regulated UK gambling industry. This was the first time that DCMS had spoken publicly since the publication on 27 April 2023 of its White Paper: High stakes: gambling reform for the digital age (the “White Paper”).

Keynote – White Paper on Gambling Reform in Britain – Overview and Next Steps

Dean recognised the importance of the gambling industry in Great Britain and that gambling is enjoyed by a large percentage of the population each month, with the majority of gamblers suffering no ill effects. He made clear however that gambling comes with risks and that problem gambling can have a devastating impact, noting it was important that Government put their best efforts into making gambling safer. Dean acknowledged the delay in publishing the White Paper, attributed to the numerous changes in Prime Ministers, and underlined that the many Secretaries of State he had supported during the Gambling Act Review had consistently pointed out that it is not the job of a Conservative Government to tell people how to spend their money.

A key challenge faced during the Gambling Review was finding the balance between freedom and protection. Dean said DCMS believes that the balance is probably right because campaigners complain Government did not go far enough and industry believe it went too far.

Dean highlighted DCMS’ strong desire to keep working with the industry, continuing to hear views on both sides, and recognised the importance of getting the detail right as the 62 measures come into force to protect those most vulnerable without interfering with the freedoms of the majority. He noted that the under-25 cohort was of particular importance and focus for DCMS, and said that the White Paper includes specific protections taking into consideration the continuing brain development of that group.

One encouraging remark by Dean, regarding the proposed frictionless financial risk checks, was that:

“We know how important the frictionless commitment is and have said the measures won’t come into force until they genuinely are frictionless.”

Though they will not of course be frictionless for those customers in respect of whom flags are raised.

Dean said DCMS will launch two of its consultations, including one relating to land-based modernisation measures, before the summer recess (July) and a further consultation immediately following that recess over the Summer. Government aims to implement the majority of key measures by Summer 2024, but Dean acknowledged this will require Government to “keep their feet to the fire” and those requiring primary legislation will likely take longer.

In conclusion, Dean praised submissions in the call for evidence for the White Paper and encouraged stakeholders to engage in the consultations and speak with DCMS directly so as to ensure the successful implementation of the commitments in the White Paper.

Panel – The Long-Awaited White Paper on Gambling Reform in Britain

Moderated by Dan Waugh from Regulus Partners, the following panel of experts then discussed next steps in Great Britain following publication of the White Paper:

Andrew Herd, Managing Director, Lancashire Court Capital Ltd
Antony Gevisser, Senior Vice President – Legal & Operational Affairs, Super Group
Ben Dean, Director of Sport and Gambling, DCMS
Helen Rhodes, Director of Major Projects, Gambling Commission
Wes Himes, Executive Director, Betting & Gaming Council

The panel discussion was a lively and engaging debate. The panel agreed that credit should be given when it is due: the White Paper was balanced, proportionate and evidence-based and had generally been well-received by the industry and its stakeholders as a whole. However, the focus now is on implementing the many commitments therein in both a timely and an effective manner.

Rhodes noted that 24 of the 62 measures in the White Paper were in the Gambling Commission’s court, with many not involving consultations and some measures requiring increased resources at the Gambling Commission. Rhodes was “very confident” with the Gambling Commission’s structured consultation programme, which will include pre-consultation briefings and a phased implementation to ease the effect on the industry, and emphasised the Gambling Commission would keep communication lines with the industry open and that it was “absolutely keen to collaborate”. She also confirmed that financial risk checks would be in the first batch of consultations this summer.

It was also interesting to find out that the long overdue response to the Gambling Commission’s consultation on customer interaction guidance (about which we have previously written) would be published before the further White Paper consultations were launched in Summer 2023.

Dean confirmed that the Secretary of State wanted to get the consultations within its remit out as soon as possible and that it would not wait to release the consultations in one batch, preferring instead to keep the ball rolling.

It was noted by the panel that frictionless financial risk checks involved competing interests which need to align prior to the introduction of that requirement – and that it would be important to test the accuracy of the final methods that would be used to determine financial risk. Herd described this as an “existential issue”, and Gevisser emphasised the “need for th industry to survive and thrive”.

Himes stated that one of the biggest challenges is that the technology relating to frictionless checks is still evolving, with the accuracy of such checks needing to be tested. Himes notes that if it can be done right, there will be a positive future.

Rhodes acknowledged that checks could not be frictionless for every customer but considered that, if implemented properly, the introduction of financial risk checks would represent a positive change for the industry as a whole and would affect only c.5% of customers. Rhodes also said that the Gambling Commission is 100% committed to working with the finance sector and the Information Commissioner’s Office to deliver the frictionless checks. It will be for the operator to use the results of those checks to support identified customers and reduce their risk profiles. Dean also recognised that creating and implementing a system for frictionless checks would not be easy, particularly given the importance of proportionality and the risk of driving people to the black market.

All panellists agreed that it would be paramount that the industry continues to engage, and encouraged those present to participate in the various consultations being run by DCMS and the Gambling Commission and also to contribute to any supplementary work undertaken by industry bodies, such as the Betting and Gaming Council’s work on industry codes.

We extend our thanks to DCMS, the Gambling Commission and other panellists for their valuable contributions.

12Jun

Gambling Commission updates AML guidance

12th June 2023 Adam Russell 220

On 7 June 2023, the Gambling Commission published a further revision of the fifth edition of the prevention of money laundering and combating the financing of terrorism guidance (the “AML Guidance”), applicable to both remote and non-remote casino licensees (“Licensees”).

The purpose of the updates to the AML Guidance is to incorporate and address proliferation financing which is defined by the Gambling Commission in the Glossary of terms section (Annex) of the AML Guidance as:

“The act of providing funds or financial services for use (in whole or in part) in the manufacture, acquisition, development, export, trans-shipment, brokering, transport, transfer, stockpiling of, or otherwise in connection with the possession or use of chemical, biological, radiological or nuclear weapons, including the provision of funds or financial services in connection with the means of delivery of such weapons and other Chemical, Biological, Radiological and Nuclear (CBRN)-related goods and technology, in contravention of a relevant financial sanctions obligation.”

The Gambling Commission directs Licensees to review the latest version of the AML Guidance and “to ensure that these changes are incorporated in their risk assessments, policies, procedures and controls, their processes and in their training.”

Updates in the AML Guidance

The updates in the AML Guidance include that Licensees:

conduct a risk assessment to identify and assess the risks of proliferation financing associated with their business, and implement and maintain policies, procedures and controls to mitigate and manage those risks. Licensees will therefore need to review and update their money laundering (“ML”) and terrorist financing (“TF”) risk assessment and their policies, procedures and controls immediately;
implement staff training in relation to proliferation financing, in addition to ML and TF training. Licensees must therefore ensure staff training is updated and implemented accordingly;
ensure their nominated officer is involved in establishing the basis on which a risk-based approach to the prevention of ML, TF and proliferation financing is put into practice;
ensure that anyone working for them to whom information or other matter comes in the course of business as a result of which they know or suspect, or have reasonable grounds for knowing or suspecting, that a person is engaged in ML, TF or proliferation financing, makes an internal report to their nominated officer; and
manage and mitigate the risks in any business relationship with a customer situated in a high-risk third country or, where Licensees are required to apply customer due diligence measures, where either of the parties to the transaction is a resident in a high-risk third country. This should form part of Licensees’ review of their ML and TF risk assessment and their policies and procedures.

Next steps

Licensees should review and make the required changes immediately. Please get in touch with us if you would like assistance with the required changes, or with any other compliance matters.

17May

White Paper Series: The End of the Beginning VIXIO Webinar

17th May 2023 Harris Hagan 281

On 16 May 2023, Bahar Alaeddini appeared as a panellist on a VIXIO GamblingCompliance webinar titled “The End of the Beginning” together with Dan Waugh from Regulus Partners, in which they discussed some of the key proposals of the White Paper, where we go from here and the impact:

16May

Reporting of Deaths by Suicide: consequence and practical implementation

16th May 2023 David Whyte 234

The Gambling Commission’s consultation on three changes it proposes to make to its Licence Conditions and Codes of Practice (the “Consultation”) is due to close on 23 May 2023 and there is one issue to which licensees should pay careful attention: the proposal to add a specific reporting requirement to Licence Condition 15.2.2 requiring licensees to notify the Gambling Commission when they become aware that a person who has gambled with them has died by suicide.

The Gambling Commission’s proposed wording is:

“The licensee must notify the Commission, as soon as reasonably practical, if it knows or has reasonable cause to suspect that a person who has gambled with it has died by suicide, whether or not such suicide is known or suspected to be associated with gambling. Such notification must include the person’s name and date of birth, and a summary of their gambling activity, if that information is available to the licensee”.

There is no question of licensees not wishing to prevent suicide and ostensibly, the arguments in favour of this proposed requirement are logical and reasonable. However, this is an incredibly sensitive issue about which stakeholders will have opposing views. Indeed, we have some concerns ourselves: that a gambler commits suicide does not necessarily mean that the gambling is a contributory factor, nor is the Gambling Commission qualified to make such a judgement. It is therefore questionable whether it is appropriate for the Gambling Commission to require the provision of information of this nature.

As has been the case on many occasions in the past, the Gambling Commission is likely to proceed with imposing this requirement, irrespective of the responses it receives to the Consultation. Consequently, rather than explore the basis of the proposed requirement, this article considers its wording and impact, which as presently drafted potentially exposes licensees to a risk of regulatory bias, imposes a disproportionate burden upon them and is likely to be interpreted inconsistently.

Intention and consequence

The Gambling Commission explains in the Consultation that, in the past, some licensees have notified it when they have become aware that a customer has died by suicide; likely under ordinary code provision 1.1.1 which suggests that, as a matter of good practice licensees should inform the Gambling Commission “of any matters that the Commission would reasonably need to be aware of in exercising its regulatory functions”. However, to enable it to “assess the licensee’s compliance with conditions of its licence” and to help “inform ongoing consideration of policy” the Gambling Commission has determined it necessary to make this notification a licence condition, the breach of which would enable it to commence enforcement action and if appropriate impose a regulatory sanction.

The Gambling Commission also states in the Consultation that, to avoid placing a burden on licensees to determine which deaths by suicide they should notify it about, it proposes that “licensees are required to notify us where a person who has gambled with them has died by suicide irrespective of whether any link between the person’s death and gambling has been established or suggested” and that “the death should be notified to the Commission irrespective of the period of time that has elapsed between the death and the most recent gambling activity.”

The Gambling Commission, many of its key stakeholders, and indeed many of its critics, have made it abundantly clear that gambling related suicide must be a key focus, and rightly so. However, suicide is almost invariably the result of a complex array of factors, and it cannot be the case that irrespective of the time that has lapsed between an individual’s gambling and their suicide, gambling will necessarily have been a contributory factor. An investigation is therefore inevitable, and care needs to be taken by the Gambling Commission when conducting that investigation to ensure that there is no internal regulatory bias on its part: its focus should be on licensee’s adherence to their regulatory requirements and not to the tragic circumstances that have led to the notification being submitted.

A regulatory bias in relation to gambling related suicide, or at least an indication of it, is evident in the Gambling Commission’s consultation Customer Interaction – Guidance for remote operators, where the Gambling Commission tells licensees that their staff “need to be trained on the skills and techniques they need to help them carry out customer interactions, including what to do if a customer becomes distressed or there is a risk of suicide”. Wording such as this suggests that, in the Gambling Commission’s view, it is the responsibility of licensees or their employees to identify the risk of suicide, and to act upon it. As we have set out in a previous article, this cannot be right: it is the responsibility of qualified professionals to identify that risk, not licensees, and it is dangerous on multiple levels, including in relation to the wellbeing of licensees’ employees, to suggest otherwise. Further, this risks suggesting there is a duty of care at law on the part of licensed gambling operators to prevent suicide, which is a dangerous precedent.

Whether or not licensees are expected to investigate, the Gambling Commission will be doing so. The extent of that investigation is likely to extend beyond the licensee who has submitted the notification: how else will the Gambling Commission ensure that all licensees are adhering to the licence condition and/or that the individual concerned has not gambled elsewhere? Having been identified it is therefore inevitable that the Gambling Commission will have to request information from other licensees; the burden on licensees potentially extending considerably and a consistent and proportionate response difficult to maintain. If gambling is a contributory factor, we suggest it is more likely than not the individual will have gambled with many operators.

As most licensees who have been through a burdensome compliance or enforcement investigation process with the Gambling Commission have experienced, the Gambling Commission can be very unforgiving in its approach, 20/20 hindsight is applied and it is rare that such a process leaves a licensee unscathed. Many licensees have found themselves subject to criticism, and in some cases may have agreed a regulatory settlement, in cases where theirs and the Gambling Commission’s view about some failings identified are not perfectly aligned. Following a notification under this proposed requirement, licensees might be forgiven for being concerned about how any Gambling Commission investigation will be conducted and any consequences of that investigation, particularly given the risk of unintentional bias and the imbalance of power between the regulator and its licensees.

Practical implementation: expectation versus reality

The Gambling Commission states in the Consultation that:

its “current view is that licensees should notify when they become aware that a person who has gambled with them has died by suicide”;
it proposes a specific reporting requirement that “would impose a requirement on gambling licensees to notify the Commission if they become aware that a person who has gambled with them has died by suicide”;
that licensees “would only be able to notify us that a person who has gambled with them has died by suicide if they themselves are aware of this, either through direct contact or other means, such as media reports”; and
it “would not expect licensees to actively investigate or verify the information in order to make such disclosures – rather, would expect licensees to notify the Commission if they become aware of a death by suicide of any person who has gambled with them (for example, through media reports or notification from relatives of the deceased).”

However, the draft wording of the proposed license condition is ambiguous and goes further than the Gambling Commission’s stated intention in the Consultation. It not only refers to actual knowledge but also to a much broader “reasonable cause to suspect”. This risks imposing a disproportionate regulatory burden on licensees. What amounts to reasonable suspicion will almost certainly be interpreted differently and will ultimately be determined by the Gambling Commission subjectively and in hindsight. Further, the breach of a licence condition amounts to a criminal offence under the 2005 Act, and can lead to various regulatory sanctions, including revocation and the imposition of a financial penalty. Licensees are therefore likely to take a precautionary approach when considering whether a notification is required.

Unlike actual knowledge, which is precise and unambiguous, a licensee’s reasonable cause to suspect that a customer who has gambled with it has died by suicide could be considered to arise in various ways, for example: (1) if they are informed by a customer that they are having suicidal thoughts following which all customer contact ceases without any known explanation or reason; (2) if public information about an individual who has died by suicide exists; or (3) if a licensee is informed that a customer who has self-excluded with them has died, but the cause of death is unknown. To avoid criticism in hindsight from the Gambling Commission about what amounted to reasonable cause to suspect, licensees will inevitably carry out an active investigation or verification exercise. The draft provision therefore appears to conflict with the Gambling Commission’s stated position in the Consultation that an active investigation is not required and this imposes a disproportionate burden on licensees.

This complication is most likely caused by ambiguous drafting, rather than by a malicious desire by the Gambling Commission to extend the reach of the draft provision. However, to ensure clarity of understanding, mitigate the risk of inconsistent interpretation by the Gambling Commission, and prevent the unreasonable or disproportionate use of the draft provision in the future, the Gambling Commission should be encouraged to address this ambiguity. Clarity could easily be achieved either by including additional wording in the draft provision that expressly states that active investigation or verification by licensees is not required, or by amending the draft provision entirely. Alternative and more appropriate wording that will retain the Gambling Commission’s desired objective might be:

“The licensee must notify the Commission, as soon as reasonably practicable, if it knows that a person who has gambled with it has died, and knows or has reasonable cause to suspect that the person has died by suicide.”

Please get in touch with us if you would like assistance with any compliance or enforcement matters.

21Mar

The Gambling Commission’s consultation on proposed changes to the Licence Conditions and Codes of Practice

21st March 2023 Adam Russell 286

On 28 February 2023, the Gambling Commission launched a consultation proposing three changes to the LCCP (the “Consultation”), in relation to: (1) the scope of the requirement for gambling operators to participate in GAMSTOP; (2) events explicitly listed by the Gambling Commission as “reportable” in the LCCP; and (3) the technical wording of an LCCP provision in relation to payment method services.

The Consultation is open to all stakeholders, including gambling operators, to share their views on the proposals. The Consultation opened on 28 February 2023 and will last 12 weeks, closing on 23 May 2023. We outline below the three topics on which the Consultation focuses, and the practical considerations for licensees who wish to submit responses as part of the Consultation.

Proposed changes to the LCCP

1. Extending the multi-operator self-exclusion scheme to additional categories of betting licensee

Since 31 March 2020, the Gambling Commission has required all remote gambling operators to participate in GAMSTOP, which is an online multi-operator self-exclusion scheme.

The Commission is “consulting on changes to social responsibility code provision 3.5.5 to “extend the requirement to participate in the GAMSTOP scheme to all licensees that make and accept bets by telephone and email.”

2. Reporting deaths by suicide to the Gambling Commission

Licence condition 15.2.2 outlines a range of events which licensees must report to the Gambling Commission via their eServices account.

The Gambling Commission is “consulting on adding a requirement to Licence Condition 15.2.2 that would require all licensees to inform when they become aware that a person who has gambled with them has died by suicide.”

3. Payment services – technical update

Licence condition 5.1.2 prescribes the method by which certain operating licence holders accept payment from customers using their gambling facilities in Great Britain.

The Gambling Commission proposes to amend the text of licence condition 5.1.2 to “ensure that the condition reflects the current legislative provisions”. In particular, the Gambling Commission wishes to ensure that it mirrors any “future legislative amendments to the Payment Services Regulations”.

Responding to the Consultation

There are practical steps and considerations which licensees should consider should they wish to respond to the Consultation. Whilst it is not intended to be exhaustive, a list of key factors is provided below:

The Gambling Commission will consider all responses submitted, whether or not all the questions in a given survey have been answered.

Licensees can respond to the Consultation using the online survey. Alternatively, responses can be submitted by post to: Policy Team, Gambling Commission, 4^th Floor, Victoria Square House, Birmingham, B2 4BP.

When responding to the Consultation, the Gambling Commission will request your consent to publish your name (if responding in a personal capacity), or the name of your company (if responding on behalf of your organisation) on their website. The publication of such details would indicate that you responded to the Consultation exercises.

We encourage licensees to respond to the Consultation, which closes on 23 May 2023, to express their views on the proposed changes.

Please get in touch with us if you would like assistance on any licensing matters.

28Feb

ICE World Regulatory Briefing 2023: Speeches from Gambling Commission senior executives

28th February 2023 Adam Russell 248

This blog will discuss the speeches delivered by senior executives from the Gambling Commission at the ICE World Regulatory Briefing (“WrB”).

Tim Miller, an Executive Director at the Gambling Commission, delivered a speech at WrB on 6 February 2023. Mr Miller considered the challenges facing the international gambling industry, and the Commission’s intention to further collaborate with other regulators to address these issues. Subsequently, on 8 February 2023, Andrew Rhodes, the current Chief Executive Officer at the Gambling Commission, delivered a speech. In particular, Mr Rhodes considered the controversial issue of affordability checks, and reflected on the Gambling Commission’s ambitions to deliver “better research and better outcomes”.

Part One: Tim Miller’s speech at the ICE Briefing

1. Illegal online gambling

Mr Miller highlighted that illegal online gambling is a key issue facing the gambling industry. In particular, the Gambling Commission is concerned about online gambling sites which fail to participate in GamStop, a multi-operator self-exclusion scheme which players can voluntarily subscribe to. Since March 2020, the Gambling Commission has required all online operators to subscribe to GamStop as a method to combat problem gambling. There are also “insidious” websites and affiliates which promote gambling operators that are “not on GamStop” in order to “target people who have sought to self-exclude from gambling”.

Over the last year, the Gambling Commission has “directed more resource” towards combatting non-compliant websites. However, there is a continued prevalence of both illegal gambling operators not subscribed to GamStop, as well as websites which promote this illegal activity.

Mr Miller states “efforts will increasingly be further upstream to disrupt these illegal sites and to work with regulators around the world”. Additionally, he emphasised that gambling operators should refrain from exaggerating the issue of online illegal gambling to justify “lower, less fair or less safe standards” in the regulated gambling sector.

2. Innovative products

Mr Miller also addressed the issue of innovative products in his speech. Innovative products, such as “non-fungible tokens (or NFTs), ‘synthetic shares’ crypto currency” are becoming “increasingly widespread”. Consequently, “the boundaries between products which can be defined and regulated as gambling are becoming increasingly blurred”. The Gambling Commission will be “vigilant” and “likely have questions” for any licensed operator which uses innovative products. However, Mr Miller highlighted that “many of these products are not gambling as defined by law”, and therefore such products would be outside the Gambling Commission’s regulatory scope.

3. Collaboration with other regulators

A central theme of Mr Miller’s speech is the Gambling Commission’s plans to collaborate with regulators in other jurisdictions to address issues facing the international gambling industry (including online illegal gambling and innovative products). He highlighed that international collaboration will help to achieve “better results for consumers and compliant operators”. He highlighted a common “appetite” amongst regulators for improved “sharing of intel” as well as “more feedback on operators”. As such, he noted that the Gambling Commission shall “continue” to share information and experiences with other regulators, as well as identify “areas where can work together to call out concerning practice or products”.

Part Two: Andrew Rhodes’ speech at the ICE Briefing

4. Affordability checks

After reflecting on post Covid-19 statistics and competitiveness in the gambling sector, Mr Rhodes discussed the vexed topic of ‘affordability checks’ in the context of the ongoing review of the Gambling Act 2005. He noted the rationale for such checks – that historically the Gambling Commission “has found too many examples of unacceptable levels of gambling being allowed” by operators.

However, Mr Rhodes clarified that the Gambling Commission does not wish to make “a moral judgment” about customer spend, but rather to “eradicate” extreme/objectively unacceptable instances of excessive gambling. The Gambling Commission currently “expect operators to consider a range of factors” when assessing the risk profile of a customer, taking into account various factors. Mr Rhodes expresses that it is feasible for operators to “balance protecting people from harmful or unfair outcomes with freedom of choice”, but that the Government plays a “big role” in helping operators to understand “where that balance should be sought”.

5. Improving gambling research and data

After reflecting on various research data gathered by the Gambling Commission (namely that problem gambling rates appear to be reducing), Mr Rhodes reflected on the Gambling Commission’s plans to facilitate further and higher quality gambling research/data. He highlighted that doing so will assist them to “understand what motivates and drives consumers”, thus shaping policies which improve “outcomes for consumers”. He proposed that later this year the Gambling Commission will launch “a new Participation and Prevalence methodology” that focuses on gambling harm statistics. Mr Rhodes also highlightd that the Gambling Commission has “invested in consumer research for the next three years”, and noted the role that the Gambling Act Review will play in plans for improved research processes and data.

19Jan

The time for reflection?

19th January 2023 David Whyte 273

Harris Hagan and Regulus Partners have set out over the course of four articles our concerns about the Gambling Commission’s (the “Commission”) consultation (the “Consultation”) on the proposed Customer Interaction – Guidance for remote operators (the “Guidance”). Of these many concerns, the principal one is that the Guidance is so obviously bad regulation. It may have been inspired by noble intentions, but a combination of loose drafting, weak evidence, legislative incompatibility and a failure to fully and adequately consider the consequences threatens to result in a costly, ineffective and incoherent regime. All of these issues can relatively easily be avoided if the Commission revisits the Guidance in the light of responses to the Consultation.

Drafting

Putting aside the fact that it is inappropriate, and arguably ultra vires, for the Commission to introduce formal requirements through guidance, the drafting of the Guidance is hopelessly ambiguous; key terms are either undefined or so highly generalised as to be meaningless. This creates scope for subjectivity, wildly divergent interpretation, market distortion and confusion about what constitutes compliance. Licensees are required, for example, to consider both “young adults” and “older adults” as vulnerable, but without any explanation as to when one stops being ‘young’, or starts being ‘older’. A customer using “multiple products” is said to be displaying an “indicator of harm or potential harm”, but the Guidance is silent on what a ‘product’ is, or what timeframe should be considered; is someone whose only gambling consists of annual punts on the Grand National and the FA Cup Final really exhibiting potentially harmful behaviour?

There is a lack of clarity as to what the Commission considers to be a “strong indicator of harm” in the Guidance. In the Consultation the Commission acknowledges previous concerns raised about this, and states that it “does not consider it appropriate at this time to set requirements which would remove the discretion or ability on the part of operators to tailor processes to their businesses and customers”. There is no easy way of prescribing precisely what may be a “strong indicator of harm”, however, if the Commission wishes to permit discretion, it could assist licensees by explaining to them how it will determine, during compliance assessments or enforcement action, what amounts to a “strong indicator of harm” so that they are appropriately informed when applying that discretion.

The Guidance appears to conflate “indicators of harm” with actual harm – requiring licensees to take action to correct customer behaviours regardless of whether they are in fact harmful. There is a clear distinction between “identifying harm or potential harm” and identifying customers “that may be at risk of harm”. In consequence, licensees are required to demonstrate impacts on behaviour, even where the customer is gambling without issues. This risks unjustifiably trampling on consumer autonomy, a dangerous precedent in regulation. It also makes it almost impossible for licensees to justify not conducting a safer gambling interaction based on either “indicators of harm”, “vulnerability” or both: a combination of the “indicators” applying to anyone who gambles.

Process

The second big problem is one of process. Whereas the Gambling Act 2005 recognises vulnerability as an exceptional state applicable to people unable to make properly informed or adult decisions, the Guidance conceives vulnerability to harm as being universal, with consumers divided between the victims and the vulnerable. The Commission’s revisionism has enormous implications for the functioning of the market and the interests of consumers as well as parliamentary sovereignty. It is not the Commission’s role to twist the law in order to accommodate moral inclination and the Consultation itself raises questions of process with certain aspects of the Guidance seemingly inviolate.

Neither the Consultation, nor the Guidance takes account of the practicability of the measures required, the cost implications, or the potential for negative unintended consequences.

The Guidance offers few clues as to what specific actions licensees should take in response to “indicators” and proposes a distinction between what operators ‘should’ do and what they ‘must’ do: a distinction that is likely to elude most compliance officers, as well as the Commission’s own enforcement officials.

Evidence

Very little evidence is presented by the Commission to explain the basis for selection of the “indicators”, and much of what is provided is highly selective and in some cases misleading: the classification of in-play betting as an “indicator” is an obvious example of this. The effect is that the regime appears arbitrary and deprives licensees who attempt to understand it of important context: understanding the specific basis for classifying something as an “indicator” would mean licensees are better placed to respond appropriately and to the benefit of consumers.

The Commission appears to have undertaken no research into consumer support for the measures that are being mandated or how they might react to them. One of the more alarming aspects is the characterisation of vulnerability in the Guidance based on broad generalisations about age (‘young’ as well as ‘older’ adults), disability (‘poor physical or mental health’) or educational attainment (‘poor literacy or numeracy skills’ and ‘knowledge’). This, along with the suggestion in the Guidance that licensees should harvest medical information about their customers, could be interpreted as unfairly discriminatory and introduces issues of privacy and data protection, with licensees encouraged to harvest and store highly sensitive information about a customer’s health or personal life. There is no demonstration within the Consultation that the Commission has considered the ethical or legal dimensions of this requirement, the extent to which licensees possess the requisite expertise to interpret such information, or whether this is even possible.

Timing

The Social Responsibility Code (which obliges licensees to take into account the Guidance) will be implemented in full from 12 February 2023, less than three weeks after the Consultation closes. This is an indecently short period for the Commission to weigh opinion and evidence and leaves licensees with little time to align safer gambling systems to the new rules. To date, it appears that very little, if any, effort has been made to understand the views of gambling consumers, or to consider the negative unintended consequences that seem almost certain to arise for them.

As the Commission has itself recently noted, many operators are “moving in the right direction and are looking to move their customers away from behaviours that present a higher risk to licensing objectives.” Whilst the Commission is admirably seeking to ensure that customers are not harmed from gambling, it is vitally important that its expectations are clear and evidence based if that positive progress is to continue. In its current form, the Guidance does not deliver in those areas: this is not only unfair on licensees, it is dangerous from a consumer protection perspective. In recent times the Commission’s actions have indicated a willingness to improve its engagement with licensees. This is a very positive change. Rather than rush to implement the Guidance, the Commission would be best served to consider all consultation responses, and revisit the Guidance, even if this means a delay.

Conclusion

There is common sense at the heart of the Guidance; but common sense tends to be context dependent and often resists codification. The Commission’s approach reflects a philosophy of market regulation by rules alone; something that is guaranteed to result in bad regulation and negative outcomes for consumers. Now is the time for reflection.

With thanks to Dan Waugh from Regulus Partners for his invaluable co-authorship.

17Jan

Is in-play betting really an ‘indicator of harm’?

17th January 2023 David Whyte 293

The Gambling Commission (the “Commission”) is currently consulting (the “Consultation”) on the proposed Customer Interaction – Guidance for remote operators (the “Guidance”). While this exercise has not yet attracted the same attention as its 2020 predecessor consultation and call for evidence on remote customer interaction requirements and affordability checks (on remote customer interaction and affordability checks) it is potentially every bit as significant for licensees and consumers. In this, the fourth in a series of articles, Regulus Partners and Harris Hagan examine one specific detail of the Guidance – its classification of in-play betting as an “indicator of harm” – and consider what insights it holds for the Commission’s approach to evidence-based policy-making.

The decision to single out in-play betting participation, from all the other forms of online gambling, as a behaviour that might be an “indicator of harm” should strike even the most casual reader of the Guidance as odd. The seemingly arbitrary nature of the classification is reinforced by an absence of supporting evidence. Instead, we are offered a rather banal explanation that: “people who bet in-play may place a higher number of bets in a shorter time period than people who bet in other ways, as in-play betting offers more opportunities to bet”. It adds that: “some studies have shown that placing a high number of in-play bets can be an indication that a customer is at an increased risk of harm from gambling”; but the studies themselves are not cited.

In search of enlightenment, Regulus Partners submitted a request under the Freedom of Information Act in order to obtain the missing evidence. This turned out to constitute one blog article, one journal paper and a selection of results from the Commission’s 2016 Telephone Survey. An examination of these sources raises various questions about the Commission’s capacity for critical analysis. Most importantly, however, the evidence cited does not support the classification of in-play betting as an “indicator of harm”.

In-play betting

Before we delve into the detail, it is worth explaining what an in-play bet is, because the image of turning sports into a slot machine is somewhat misleading. To bet in-play is to place a wager on an event which has already started, but before the result is known; that sounds simple but here are some practical examples. Placing a bet on the final score of a football match during half-time counts as in-play, but during the 100 minutes or so that a typical football match lasts, there are typically ten domestic horse races, even more international and dogs races, and as many virtual betting opportunities that a customer can hope to find. Equally, a tennis match typically lasts 90 minutes and can go on for hours; in Australia in-play betting is not permitted on the internet, so in tennis it is the game rather than the match which is considered to be the unit of play; therefore most ‘in play’ bets on a standard definition become ‘pre-match’ in Australia by applying a common sense workaround. Basketball can be similarly divided up: a two and a half hour match comprises four twelve-minute periods and a lot of stoppage time. Perhaps the most obvious ‘in play’ definition trap is a three-day test match in cricket, substantially all of the betting is necessarily ’in play’ but hardly ever fast-paced. The frequency at which a gambler bets is clearly an important potential marker for harm, but whether or not a bet is in-play is typically a definitional red-herring based upon the length and game-structure of the sport rather than the customers’ betting frequency on a given sport.

The blog

In April 2013, Professor Mark Griffiths of Nottingham Trent University published a blog The ‘In’ Crowd: Is there a relationship between ‘in-play’ betting and problem gambling?’. The article contained no analysis of betting data or harm. It was instead a conjectural piece that considered whether an ability to place football bets more frequently (through in-play) heightened risk of disordered gambling. It argued that the ability to place successive wagers on successive matches, combined with an expansion in television coverage of live football, might increase risk of harm for some people compared with the days when most games kicked off at 3pm on a Saturday afternoon and were not televised live. If anything, the blog appears to suggest that the dispersal of matches across the week (and at different times of the day), which reduced the intervals between football betting days, was the bigger issue.

The blog concluded that: “in-play betting is something that many of us in the problem gambling field are keeping an eye on because it’s taken something that has traditionally been a non-problem form of gambling to something that is more akin to betting on horse racing.” This is significant for two reasons. First, the speculative nature of the commentary is emphasised by Professor Griffiths’ intention to “keep an eye on” in-play betting. His concerns stemmed not from any actual data or observations of in-play betting, but from what some people might theoretically do given the chance to place bets throughout the duration of a football match. Moreover, Professor Griffiths noted the relationship between bet frequency and event frequency needs further empirical investigation and conceded that “ntil more research is forthcoming a definitive answer is currently not available.” Second, he compared in-play betting on football with horserace betting – an activity with consistently low rates of “problem gambling” reported via official prevalence surveys. In short, Professor Griffiths did not suggest that in-play betting was especially risky.

The journal

The second piece of Commission evidence is a study published in the Journal of Gambling Studies in 2015, Demographic, Behavioural and Normative Risk Factors for Gambling Problems Amongst Sports Bettors (Hing et al.). The study features results from an online survey of sports bettors in Australia in 2012. It concluded that: “risk of problem gambling was also found to increase with greater frequency and expenditure on sports betting, greater diversity of gambling involvement, and with more impulsive responses to betting opportunities, including in-play live action betting.”

It would be wrong, however, to read this conclusion as vindication of the Commission’s targeting of in-play betting. First, the study was based on data from Australia, where in-play betting is only permitted by telephone or in person and where on-line in-play bets may therefore only be placed with unlicensed operators. Second, it is based on a relatively small sample of sports bettors (n=639) and the use of an online survey vehicle that “deliberately oversampled to optimise recruitment of adequate numbers of problem and at-risk gamblers”. Third, the data was gathered via a self-report survey rather than actual observation of betting behaviour. It relied on respondent recollections, from the previous 12 months, of the proportion of bets that they placed by different channels, at different times (i.e. the day before the event, the day of the event, during the event) and on different outcome classifications (i.e. final outcome of event, key events such as ‘first goal’ and micro-bets such as ‘next point’ in tennis). The classification by respondents of betting activity in this way for an entire 12-month period would have involved fairly heroic feats of recall.

Most importantly however, the journal paper’s findings do not support the Commission’s categorisation of in-play betting as an “indicator of harm“. The researchers did find an association between the percentage of an individual’s bets placed “during the match” and their Problem Gambling Severity Index (“PGSI”) score – but they also identified a similar association for traditional bets placed within the hour prior to kick-off. Perhaps more significantly, they found that betting in-play on the final outcome of the match was associated with lower PGSI scores than final outcome bets placed before kick-off. Associations between the percentage of bets on “key events” and PGSI score was similar whether the bets were placed before or during the match. It did indicate that regular betting on “micro events” (which can only be made in-play) are associated with higher PGSI scores: but to suggest that this proves the inherent riskiness (or harmfulness) of all forms of in-play betting is at best a profound misreading of the research.

The survey

The final item of evidence is a set of results from the Commission’s Quarterly Telephone Survey in 2016 (the “2016 Survey”). The Commission reported that “27.4% of online gamblers who bet in-play were classified as problem gamblers, compared to 10.9% of all online gamblers and 5.4% of online gamblers who do not bet in-play. 44.1% of online gamblers who bet in-play were classified as at risk of problem gambling compared to 40.4% of all online gamblers and 26.4% of online gamblers who do not bet in-play.”

On the face of it, these findings appear to support the classification of in-play betting as an “indicator of harm”. This however overlooks important considerations of survey methodology and interpretation.

The 2016 Survey typically samples around 4,000 people a year. While this is a reasonable sample size for estimating overall participation in gambling, findings are likely to be less robust when considering specific activities. For example, we calculate that the number of online football bettors in the sample in 2016 was around 160; the number of tennis bettors just 14. The ‘problem gambling’ rates for online gambling cited by the Commission (using the short-form PGSI rather than the full nine-item instrument) were three times higher than those found in the ‘gold-standard’ NHS Health Survey for the same year, something that raises obvious questions about sample bias. Upon original publication of the results in 2016, the Commission noted with suitable circumspection that “due to small base sizes the data presented here should be considered as indicative, and be treated with caution.“

Issues of survey reliability aside, there are a number of issues of interpretation. The Commission appears not to have considered that people who typically bet in-play may, for other reasons, be considered higher risk. For example, young men (a higher risk demographic group) are likely to be over-represented amongst in-play bettors. It seems plausible that a majority of in-play bettors will also bet traditionally; in which case they may be assumed to have broader wagering repertoires than people who only place bets before the start of the event (because they do both). Finally, the analysis is limited to a comparison of “problem gambling” rates between two different types of online sports betting. It provides no comparison between in-play betting and other forms of gambling, which would be necessary to classify it as a uniquely risky product.

Conclusion

The Commission’s decision to classify in-play betting as an “indicator of harm” is, according to its Freedom of Information Act disclosure, based entirely on an assessment carried out in 2016, which stated: “on the balance of the evidence we have reviewed and considered, we have concluded that the current regulatory regime in place for in-play betting is sufficient and further controls are not needed at this time.” It is unclear therefore why a review of precisely the same evidence base in 2022 should arrive at such a different view.

The Commission is correct to point out that short gaps between bets or high-staking after a big win may be risk indicators for some people, but if so, this is true of many other activities and not just in-play betting. Indeed, in-play betting does not appear to be particularly high-risk viewed solely through a lens of bet frequency or rapidity.

Official prevalence surveys have consistently shown that participation in online sports betting is associated with low rates of PGSI and DSM-IV “problem gambling”. As we pointed out in our third article, this is particularly the case where bettors have not participated in other forms of online gambling. We know from Commission data that around one-quarter of online gamblers, and therefore a much higher proportion of online sports bettors, participate in in-play betting. It is not a difficult jump to realise that it is implausible that problem gambling rates could be so low for remote sports betting in total if in-play betting on its own was a significant “indicator of harm”.

There is no inherent logic to consider in-play betting as especially risky. After all, ‘in-play’ simply denotes the fact that the wager is placed after the event has commenced. A final outcome result bet placed five minutes into a match is really no different to the same bet placed five minutes before kick-off. If anything, the bettor has more information on which to make his or her decision. Some bet types, in particular ‘micro-bets’, may indicate elevated risk; but specific bet-choices may be indicative of risk in all forms of gambling: this is not unique to in-play.

Our analysis indicates that the Gambling Commission’s decision to categorise in-play betting as an “indicator of harm” is based on a mis-reading of a very thin and selectively assessed evidence base. Indeed, we would go further, the Commission’s claims are in fact contradicted by the only peer-reviewed study presented as evidence. The Griffiths blog is a cogent article, however it proves nothing and in any case does not support the Commission’s classification, whilst results from the 2016 Survey appear to be at odds with the ‘gold-standard’ Health Survey for that year (and all other years) and are presented without context and in a way that does not allow further checking or analysis. In this article, we have examined, and found wanting, the evidence presented by the Commission in support of just one of the vast number of “indicators of harm” or “vulnerability” that feature in the Guidance. This may in itself be an indicator of a particular vulnerability within the Commission: a susceptibility to believe the worst about the market it is required by law to oversee. It is certainly an indicator that evaluation is difficult and may be subjective, something that would benefit from introspection in any final version of the Guidance.

With thanks to Dan Waugh from Regulus Partners for his invaluable co-authorship.