Winning Post – Industry finds its cost of virtue

Industry strategic consultancy Regulus Partners reviews a week of industry ‘virtue signalling’, as debate on the need of a ‘safer gambling levy’ is now finely balanced…

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UK: Regulation – GVC learns that there’s no pleasing some folk.

Mirror, mirror on the wall, who is the most virtuous one of all?

Could it be Kenny, could it be Phil?
Or could it be ol’ Commissioner Bill?
 
Perhaps it was the Easter spirit, but piety and self-sacrifice were in plentiful supply this week in Britain’s gambling industry as operators took a few steps further down the long road to redemption. 

On Thursday morning, GVC announced its intention to make a substantial increase in funding for problem gambling treatment along with research and harm prevention measures. The group’s commitment to raise contributions (in addition to internal spending on safer gambling initiatives) to 1% of UK revenue creates the prospect of a much-needed expansion of counselling and treatment services.

A number of other major licensees have been thinking along the same lines and are likely to join the owner of the Ladbrokes, Coral and Gala brands in stepping up to a greater quantum of contributions. In addition, the decision to join Kindred, Gamesys and Stars (Sky B&G) in making Gamban blocking software freely available suggests that the industry may be learning how to resolve rather than resist regulatory concerns.

All of this ought to have been welcome news to the Gambling Commission’s chairman, Bill Moyes. In unveiling the new National Harm Reduction Strategy, Moyes indicated that funding for treatment (as well as research and harm prevention measures) would need to rise over time to at least £70m. The GVC commitment represents a big step towards this target, yet this was not mentioned (possibly due to his licensee’s announcement occurring on the same day as the speech). Looking backwards (rather than forwards as his CEO, Neil McArthur had urged) the chairman of the regulator focussed on the issue of funding being “nowhere near enough” and that a levy was now needed to replace the traditional voluntary mechanism.

Few people would dispute the fact that there is a need for a significant expansion in treatment, counselling and support services for those affected by gambling disorder; but the fact is that industry funding has been broadly in line with the budgets set within the National Responsible Gambling Strategy and way above what is required under the regulator’s Licence Conditions and Codes of Practice. If funding has been insufficient (and so far, no detailed budgets on what is required have been published) then this is as much the result of poor guidance from above as it is corporate parsimony.

Indeed, industry funding for treatment – both voluntary and coerced via regulatory settlements – has never been greater. Given the GVC announcement and the assumption that the Commission is still working its way through a glut of enforcement actions, it seems likely that in the near-term funding will continue to grow via both mechanisms. What is missing (for now) is a clear plan for how these funds should be expended, what governance measures need to be put in place and how the effects should be evaluated.

The Sports Minister Mims Davies has so far shown in her ministerial career a refreshing willingness to recognise the positive as well as to criticise the negative. Davies believes that a voluntary system can work – and the fact that major operators are increasing funding of their own volition suggests that she could be proved right. Her endorsement of the GVC announcement is likely to have a positive influence on other major operators and she deserves the opportunity to make her plan work.

The debate over the need for a safer gambling levy is finely balanced. It would – as the Gambling Commission contends – provide a level of independence and sustainability to funding arrangements (regulatory sanctions, after all, cannot be considered a sufficiently predictable source) and give them a semblance of equitability. However, levies can also tend toward the bureaucratic, costly to run and subject to undue political influence (interestingly, a number of treatment providers are fairly lukewarm about the idea of a levy precisely because they fear it may result in politically-motivated decisions about where the money goes). Also, while there are entirely valid concerns about direct industry funding of research (which informs policy), the same is not true of treatment (where there is a general view that operators should pay).

Perhaps the greatest argument against a levy came in the speech given by Professor Tim Kendall, the NHS England’s national clinical director for mental health. His claim (based upon little more than parliamentary hearsay) that one-in-ten suicides in Britain may be linked to gambling will give very little confidence that his organisation is fit to make sound decisions about the distribution of funds for treatment. As we have written before, sound policy is unlikely to arise from lazy interpretation or misapplication of research findings.

There was a modicum of frustration amongst peers that GVC acted independently rather than waiting for a more comprehensive and collaborative plan to address harm. Such angst is understandable – but given that the industry has a track record of dithering in such matters it is easy to see why GVC decided on swift and decisive action.

There is a sense that a growing body of stakeholders wishes to resolve the issues surrounding Britain’s gambling industry. The meeting between the Culture Secretary, Jeremy Wright and a number of leading industry CEOs on Wednesday night was a constructive affair, according to Mims Davies. Meanwhile, the National Harm Reduction Strategy has been repositioned as a far more collaborative and positive exercise than had been feared – and the Gambling Commission should take credit for many of the operator-driven reforms that have emerged in recent years.  While it may be morally satisfying to knock lumps out of the gambling industry and government policy, now is the time to focus on effective solutions rather than continuing to wallow in the problems.
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Content provided by Regulus Partners

 

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