Jenny Williams: the regulatory challenge of getting things in proportion

jennywilliamsAfter 10 years as the first CEO of the UK Gambling Commission, Jenny Williams talks to SBC News as she steps down from the role.

The gambling legislation regarding online has pivoted from permissive to restrictive during your time in office – how much did this trigger a reappraisal of the regulator’s approach to its work?

Not sure that I recognise the description of pivoting from permissive to restrictive. Clearly there were practical limits to what we could do when we only regulated less than 15% of the market and imposing conditions on that 15% would simply give a competitive advantage to those licence elsewhere or unlicensed. However the basic objectives, making sure that the gambling facilities were only provided in a manner reasonably consistent with the licensing objectives has always been at the heart of what we have done.

Of course over the last decade we’ve all learnt a great deal more about what should be done to keep crime out of gambling (AML), making it fair and open (the way in which free bets and bonuses for example have developed has needed checking and changing), the importance of affiliates and below the line advertising/marketing and the use of digital/social media/currency/marketing and so regulation has evolved to counter the adverse impact of those but I wouldn’t describe that as pivoting from permissive to restrictive so much as responding to emerging issues.

If this is a reference to the introduction of ‘restrictions’ requiring those selling into GB to hold a GC licence (as a result of POC) that and the introduction of software licensing are pretty all encompassing but not at all restrictive in terms of products or who can be licensed – our regulated market remains one of if not the most open (and permissive) in that anyone can apply and they face a clear and open licensing process. We have no restrictions on the products that can be offered by licensees (which is important to an efficiently functioning licensed market) and our approach is risk based and pro competition so we consider the burdens and barriers to entry we impose very carefully.

What changes have you seen in the industry during your time as its regulator? Which of those do you think you shaped?

I think that the Commission has played a part in getting the key executives and boards of the larger companies to pay a great deal more attention to preventing underage gambling and other key aspects of the licensing objectives and to start to recognise that they need to do far more than just support GamCare and Gordon Moody house, important though that is, if they are to be allowed to innovate and grow.

It’s worth mentioning here the assurance statements that we introduced last year. This short account – that businesses can be held to – of how, at the most senior levels of the business, operators ensure that their provision of gambling is in line with the licensing objectives.

And I think we’ve been reasonably successful in heading off unwanted changes such as a growth in the black market/illegal provision by, for example, working with the payment service providers and media platforms such as Google and Facebook or the development of gambling style TV game shows designed to promote remote betting on the outcome.

But I don’t think we can claim any part in the major structural moves towards remote gambling or within that the move to mobile gambling, use of social media and other below the line advertising or the move to in play betting. Nor has the Commission shaped the huge growth in the Far East betting market.

What was the most frustrating aspect of the last ten years?

The almost four-year delay before DCMS got a slot in the legislative programme for the remote gambling legislation and the slow progress in building up the funding for and programme of research education and treatment.

I am pleased we are making some advances now in this area and getting the industry to recognise its responsibilities.

Do you think the GC has received enough recognition for the way it has kept down its running costs since its introduction?

We don’t expect thanks or recognition – we are very conscious that our running costs are an overhead for those competing to stay in business and have continued to bear down on the costs we would otherwise have to recover from the industry. Indeed the fee levels introduced in 2012 reflected a 16% real cut over the period 2009 to 2015. We have also just negotiated a lease extension which represents a considerable saving on the overall costs of moving to alternative accommodation even assuming a significantly lower rent elsewhere.

But we also have to be prepared to invest in the Commission if we are keep our regulatory approach up to date, responsive and cost effective – cutting costs can be overdone and opportunities missed.

For example we have invested in a range of e-services which both reduce our operating costs and those of licensees. Operators can now apply to vary their licences, make their regulatory returns and report key events via Commission portals online. We are putting a lot of effort into reducing duplication with overseas regulators eg over test results.

We have helped to develop, and introduced, the multijurisdictional application form for operators which, in a world moving towards point of consumption regulation should reduce operator and regulator costs in licence applications and keeping them up-to-date.

We’re also getting called to do more in certain areas. Some people want us to take up the running and operation of the self-exclusion database but if so this would need to be funded via the licence fee or a levy.

The number of smaller retail operators has dwindled considerably since the introduction of the Gambling Act. Should a regulator have a role in stimulating small businesses or should it be left to market forces?

Our role is to permit gambling subject to reasonable consistency with the licensing objectives; it is for the Department of Culture Media and Sport, and government more generally, to decide whether small businesses should be stimulated.

In deciding whether a particular regulatory measure is proportionate to the risk it is addressing, we are acutely aware of the burden that regulation can be for small businesses and the danger of unduly stifling innovation.

There are provisions in this area, small scale operators don’t need to have personal licences for example, but equally we cannot exempt small businesses from the basic requirements for consumer protection and prevention of underage gambling – even if this makes them unprofitable.

The GC is currently looking at a new approach for its licensing fees – does this mean the original structure was flawed or is it a natural process of change?

No not so much flawed as based on limited information –we had to make all sorts of heroic assumptions. We have been improving and developing our approach as we received better information and understanding but are now taking the opportunity of the step change in the market and extension of our remit to cover overseas operators selling into Britain to do a stock take and see if we should make any revisions- move to GGY for premises based fees is one proposed change. But we also wanted to explain more fully our approach and open it up to challenge.

GC is planning a raft of other consultations – consultation overload?

Well the list of forthcoming consultations is available on our website.

We are constantly trying to balance the trade off between providing stability and certainty for operators and users and refining the regulatory regime to respond to changes or to feedback that improvements could be made.

We were one of the first regulators set up using the Hampton principles of good governance and this includes regular consultation with the industry on major changes. We recognise that it can be a burden on both companies and trade associations, which is why we try to group changes – social responsibility /player protection ones last year, crime related ones this year, technical standards the next.

And these are important processes that do bring up vital points which otherwise might not have been considered and allowed us to avoid potentially negative unintended consequences. I’m sure the industry would much rather have their opinion heard and taken into account rather than have things imposed on them.

How is the Commission viewed overseas?

Internationally the UK Gambling Commission, and the industry itself, has a great reputation and we are constantly speaking to other jurisdictions and would-be jurisdictions about our experiences. We have more or less a constant stream of people coming to visit us to see how we operate. We are seen as a very modern and proportionate regulator with a mandate to work with the industry but also to hold them to account.

What now for Jenny Williams?

What indeed? I need a holiday and am supporting my successor until end November but then I hope to find some new challenges. I have had one or two interesting approaches already which might come to something. I may be able to share some of our experience with other jurisdictions or regulators facing similar challenges but I will be lucky if the next 10 years proves as endlessly fascinating as the last.

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