David Clifton: Licensing Expert – Pointing to the next stage in the fight against gambling-related harm

 

David Clifton

Last month I wrote about the latest effort by the UK Government to “drive action” across online gambling, gambling advertising, research, education and treatment of problem gambling and, more widely, the public health agenda with regard to gambling.

Perhaps the industry’s most immediate major reaction to this has been the announcement by William Hill of a new corporate objective “Nobody harmed by Gambling” that seeks to “eradicate problem gambling within the UK”.

Accompanying the launch of this objective, William Hill’s Group Chief Executive Phillip Bowcock issued an open letter in which he said: Every type of gambling product has the potential to cause harm to our customers. That is something we have to recognise and that harm is something we need to face into”.  

The cynical have regarded this as a belated “hands-up” for the harms attributed to FOBTs over the last 16 years now that it has been announced by the Government that their maximum stake is to be reduced to £2. However, let’s focus on the positive. In taking a lead on the Gambling Commission’s call for safer and responsible gambling, William Hill has effectively put its neck on the block, inviting the regulatory axe to fall if it fails to meet its self-imposed objective. Indeed, if it does fall, it will do so with added momentum bearing in mind the £6.2 million penalty package imposed by the Commission on William Hill earlier this year for “systemic” AML and social responsibility failings.

In his open letter, Philip Bowcock went on: “We want gambling to be a fun part of people’s spare time, which adds to the excitement of the sports they love. Gambling is meant to be a leisure activity, not a source of human misery. That’s why we must recognise the hidden side of gambling and get much better at helping our customers stay safe, in shops and online, in the UK and around the world. Society expects it, our customers need it and a sustainable future for William Hill depends on it”.

The proof of this particular pudding will clearly be in the eating. Indeed, as previously reported by SBC News, Lyndsay Wright, William Hill Group Director of Strategy & Sustainability has acknowledged that “this isn’t going to be a smooth ride. There will be bumps along the road. We will be criticised and some of that criticism will be fair. But we believe that it’s only by setting out with a bold ambition that we’ll start to see that change we want – and to have a positive impact on people’s lives.”

Without a doubt, William Hill’s announcement will have been welcomed by the Gambling Commission. In its Annual Report published just days before that announcement, the Commission’s Chairman Bill Moyes described the regulator’s objective as higher priority being given to the prevention of harm, adding that achievement of that objective “requires the industry to understand better how gambling that is initially entertainment can become a major problem for individuals and thus for families and for the country”.

Echoing comments made previously by the Commission, he added that “companies also need to use the extensive data they hold to understand how to identify players who are developing gambling behaviour that is likely to become problematic, and how to help them change before their problem becomes unmanageable. This includes the designers of gambling products as well as the operators”.

Responsible operators within the industry who have been awaiting an acknowledgement from the Commission of their own efforts to raise regulatory standards will hopefully have spotted Bill Moyes’ additional comment that “the information we get from the assurance statements suggests that these issues are rapidly moving up the agenda of company boards and senior managers. We welcome that. We will continue to develop the assurance statements in ways that will improve the focus of the boards and senior leadership teams of gambling businesses on the delivery of the licensing objectives”.

Now in the final year of a three-year pilot Annual Assurance Statement (“AAS”) scheme, the Commission has very recently published its template for the third AAS for completion by 39 of the largest operators (in terms of gross gambling yield) by 14 December 2018.

Although completion of an AAS is not yet a requirement for all operating licence-holders, my recommendation is that all operators licensed by the Commission (both B2C and B2B) should acquaint themselves with the questions posed in the AAS because answering the questions posed should:

  • provide the most senior level assurance that compliance with all of the licensing objectives is at the core of their businesses’ control systems, risk assessments and risk management, governance, evaluation and culture and
  • help them to achieve greater effectiveness in relation to the licensing objectives by enabling them to consider risks, how those risks are managed and how progress is evaluated.

It is to be hoped that more gambling operators will now follow the lead taken by William Hill and, before it, Sky Betting & Gaming, whose CEO, Richard Flint spoke at ICE in February of the need to promote means for all customers to control their gambling behaviours; we need to interact more with our customers; we must intervene more effectively with those customers who find it difficult to control their own spend; and we will need greater regulation of the signs to look for and interventions expected of operators to ensure that this happens across the whole industry”. At that time, it was presumably known that a substantial penalty package (subsequently fixed at £1million) was to be imposed on Sky Betting & Gaming for failing to protect vulnerable consumers.

In following the lead of William Hill and Sky Betting & Gaming, operators can expect to find a willingness on the part of the Gambling Commission to collaborate (which was the key theme of my “Licensing Expert” article for SBC News last month). This was confirmed, for example, by the Commission’s Executive Director Tim Miller in his speech at the World Gaming Executive Summit 2018 in Barcelona on 3 July, when he said that the: “Commission will continue to both challenge and support industry to work with each other for this greater good and will be starting a series of co-creation workshops later this year where consumers, operators, and the regulator can come together to build solutions in partnership”.

All of which brings me to publication by the Gambling Commission on 28 June of its first ever report into enforcement action that it has taken against operators over the past year, in which it highlights its following current major regulatory concerns:

  1. Anti-money laundering
  2. Customer interaction
  3. Self-exclusion
  4. Unfair terms and practices
  5. Marketing and advertising
  6. Illegal gambling

In relation to the first five of the above items, the Commission’s report helpfully contains a series of questions (that you can access on the Clifton Davies website) that all operators licensed by the Commission should ask themselves with a view to avoiding the investigations, enforcement action and increasingly heavy financial penalties of the type detailed on the Commission’s Lessons learnt – compliance failings webpage.

Commenting on the publication of the enforcement report, Neil McArthur, the Commission’s Chief Executive, said:

  • “We want operators to pay attention to the lessons set out in this report. We want them to focus on ways to make gambling fairer and safer for consumers in Great Britain.
  • “We also want gambling businesses to collaborate and to invest the same amount of resources into data, technology and research into building better protections for consumers, as they do to creating new products, or advertising and marketing campaigns.

 His additional following comment can now be interpreted as a call to other gambling industry leaders to follow the initiatives of Richard Flint at Sky Betting & Gaming and Phillip Bowcock at William Hill, namely: “This is a call to action to the leaders of operators to set the tone from the top, to lead a culture of compliance that puts doing the right thing for your customers first, and to strive to continuously raise standards for consumers.”

Completely eradicating problem gambling might well be an overly ambitious aim but, with:

  • increasingly high financial penalties being imposed by the Gambling Commission for regulatory breaches (most recently the £2million penalty package imposed on 32Red and with others understood to be in the pipeline) and
  • a precedent now set in Italy (with effect from 1 January 2019) for a blanket ban on all forms of gambling advertising, marketing, promotions and sponsorship,

Gambling operators licensed in the UK certainly do now have a real incentive to ensure they all play their part in the fight against gambling-related harm.

__________________

David Clifton – Director – ‎Clifton Davies Consultancy Limited

The Betting industry’s regulatory agenda and current context will be discussed at the upcoming ‘Betting on Sports Conference’ (#boscon2018 – Olympia London-18-20 September 2018). Click on the below banner for more information…

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