Last week the Information Commissioner’s Office (ICO) granted the Gambling Commission its phase-1 sandbox approval to proceed with its Single Customer View (SCV) project. Despite its GDPR greenlight, Regulus Partners outlines the foreseeable challenges the Commission will face in turning its headline project into reality.
Meanwhile, in Manchester, Regulus observes another think-tank ‘echo chamber’ debate on gambling’s regulatory future take place at the Conservative Party 2021 Conference…
The Gambling Commission may be under new management but its taste for controversy remains undimmed with plans announced this week to press ahead on a ‘Single Customer View’ (‘SCV’) for gambling. Since November last year, the Commission has been working with the Information Commissioner’s Office, working out some of the legal ramifications of permitting data sharing across online operators for the purposes of harm prevention.
This week, the ICO announced the conclusion of this ‘Regulatory Sandbox’ project – opining that there may be legal grounds to permit sharing of account information in order to allow operators to better assess risk of gambling harm. While the ICO report is suitably nuanced, cautious and limited, the Commission’s response is to kick on.
The idea of a SCV is logical within a narrow context – it is difficult after all to make a detailed assessment of the risks and sustainability of a person’s gambling if one is only looking at a fraction of it. As usual, the devil lurks in the detail. The first issue is that consumers may not wish for operators to be able to see their account histories in aggregate (in much the same way as a pub-goer may be reluctant to share his or her drinking habits with the local landlord). Indeed, GDPR rules (which the ICO oversees) are particularly tight on health-related issues, which disordered gambling clearly fits into. Partly because of the sensitivity of health-related data, this argument is one that is likely to cut more ice with the ICO than with the Gambling Commission.
Gone are the days (under former CEO, Sarah Harrison) when operators were exhorted to ‘put the customer at the heart’ of decision making and service, in the context of the vast majority of customers being responsible adults. As last year’s call for evidence on remote interactions (‘affordability’) revealed, the Commission has determined that most if not all gambling consumers are ‘vulnerable’. The conception of the gambler as a hapless victim-in-waiting, bereft of agency – allows for his or her interests and rights to be marginalised and dismissed. No longer considered a rational consumer, the gambler may be subjected to arbitrary state-imposed spending caps and deep intrusion into his or her personal life.
Unsurprisingly given this context, the ICO report is careful in its wording, flagging for example that:
- only a conceptual model was discussed with no practical structure for the ICO to opine on, making the advice high-level at best
- GDPR restrictions on ‘special category’ data only ‘may’ potentially be over-ridden using the ‘substantial public interest’ argument, but this would have to be investigated in much greater depth
- affordability data was out of scope for the opinion, only behavioural and direct expenditure data was considered
- the aggregated behavioural SVC would only be used to create a potential risk score with limited scope for spotting indicative health issues
The ICO opinion therefore does not necessarily take us very far. That there may be a public health reason to share data is self-evident: without the detail of exactly what and how data will be shared, the ICO could hardly say anything else. There is therefore already a danger that ‘SVC’ becomes the new ‘affordability’: a dangerous bureaucratic short-hand that can mean different things to different people and tie everybody in knots while definitions remain vague.
Referring the specifics back to the ICO will be key, but this runs against the Commission and the minister’s exhortations simply to ‘get on with it’. We do not have an answer for an SVC yet because nobody has asked a precise enough question, but a trap has now been laid for the industry to be blamed for not providing a solution ‘quickly’. Perhaps most tellingly, both the Commission the ICO flagged the likely need for a change in the law to cover a breach of GDPR: the industry can hardly be blamed for lacking the legal basis to provide the systems that politicians and regulators want. Maybe Britain needs a legislative review of gambling to join all of this up….
There are also likely to be a number of valid ‘slippery slope’ concerns. First, the SCV will not in fact provide a holistic view of an individual’s wagering unless it is extended to include landbased operators as well. The Gambling Commission has made no secret of its desire to institute mandatory tracked play in casinos, bingo clubs and arcades – something that might well signal the end for many such venues. There is also the fear that a SCV will facilitate ever-greater erosion of consumer privacy.
Last year, Iain Duncan Smith’s Centre for Social Justice proposed the creation of an extensive system of state surveillance that would permit scrutiny of every citizen’s bank account, gambling behaviour and geographical location. The CSJ’s proposal for a ‘Gambling Stasi’ was supported by a high-profile Labour Party MP and a senior figure in the NHS. Others have called for state access to bank accounts to be made a condition of participation in online gambling. The ICO report is at least valuable in this context for demonstrating that such diktats need legislation, not just the whim of ‘lawmakers’ forced upon existing structures designed to prevent them from doing just that.
Among consumers, concerns have been expressed that the SCV may lead to greater account restrictions with operators better able to identify – and therefore limit – successful punters. Contrary to the wisdom of Twitter, a meaningful proportion of online sports bettors come out ahead (as the University of Liverpool’s ‘Patterns of Play’ report from earlier this year demonstrated). Customers who would be inclined to avoid the snooping are far less likely to advertise such thoughts on Twitter, but we can reasonably assume that this is an even bigger group.
While the SCV is online-only, there are two obvious ways in which a customer can avoid this level of personal intrusion. The first is to move to the black market, which c. 5% of more engaged customers already use according to a robust survey carried out by PwC. These customers are likely to be responsible for c. 50% of UK online gambling revenue (a Pareto Curve not dissimilar to income tax), so the ‘flight risk’ is acute. The second is to go (back) to land-based environments where the checks do not apply. Both of these workarounds are relatively easy, which is likely to lead to significant market distortion in the quest to ‘protect’ people who do not want to be protected.
The level of distortion caused then brings a practical question of proportionality to the ethical one. If gambling customers do not want to be snooped upon and have credible means to avoid the snooping while carrying on gambling, then how can the invasion of privacy be considered a good idea? There may be some merit, and far fewer data protection issues, in making the system voluntary. However, a voluntary system is unlikely to appeal to those who prefer to control the lives of others.
There is a more dangerous displacement risk to the ratcheting up of intrusion and pariah status of the legal, regulated leisure pastime of gambling – people might start to find their kicks elsewhere. In the UK, the Football Index scandal highlights the dangers of people getting involved with products they do not fully understand. In the US, which is still largely starved of legal sports betting, day-trading can take its place, with potentially very harmful results. In the world of mobile social gaming, hiring psychologists to ensure that games are as ‘addictive’ as possible in terms of dwell time and spending triggers is quite normal. There is little point in banning cake while burgers remain freely available.
This issue also raises important questions of efficacy and proportionality. Gambling is uniquely regulated and even has a unique combination of characteristics (cash stake + risk + cash prize), but the relationship between consumption and harm is not disproportionate to the consumption of food, alcohol, investing, computer gaming or even shopping. There is no logic to stopping at gambling and therefore policymakers should either stop before monitoring gambling on the basis that it is not a proportional response to personal freedom vs. potential harm, or explain which other personal activities need full state monitoring.
Fortunately, the Information Commissioner’s Office is above the politics of gambling and does still put the consumer first. We must assume therefore that ICO will seek to balance the legitimate needs of gambling harm prevention against the right of citizens to privacy as more detail emerges. Its opinion certainly suggests it is aware of the delicate nature of that balance and does not in fact give the green light to an SCV, instead simply noting that there may be legal grounds to permit one conceptually. On the other hand, the Gambling Commission doesn’t really do circumspection these days and has ordered remote licensees (via the BGC) to “move swiftly” to test and evaluate its SCV solution.
Given the remote sector’s technological know-how and ingenuity, a system that provides greater protection for the (genuinely) vulnerable while preserving the freedoms of consumers at large may be within grasp – but it is unlikely to be straight-forward. The term ‘sandbox’ is an Americanism that refers to innovation (derived from child’s play in a sandbox’) – but is also a synonym for litter tray. Those digging around in this particular sandbox should exercise great care.
UK: Out of Parliament – Think Tanks Run Empty on Gambling Reform
This week it was the turn of the Conservative Party to discuss matters of gambling at the fringes of its Party Conference in Manchester. The capricious gods of event scheduling contrived a diary clash on Monday between the Institute of Economic Affairs and the Social Market Foundation.
The so-called ‘think tanks’ assembled parliamentary panels to discuss (we must assume as we were not there) much the same subject at much the same time but in different places. Here was the so-called gambling debate in microcosm – not in fact a debate at all but a series of echo chambers full of sound and fury signifying little that is coherent.
On the face of it, the two events showcased two poles of the increasingly bad-tempered tug-o-war on the future of regulated gambling in Great Britain. In one corner of this “rumble in the jungle” (as one politico rather optimistically labelled it; “squabble in the bubble” might be closer to the mark) were those who think that consumers are the best judges of their own interests; in the other were those who think that they in fact know best what is right for everyone else.
Conference delegates interested in matters of gambling regulation were thus offered the choice between those who advocate freedom to punt, drink and smoke and those who prefer fire, brimstone and moral indignation. The choice should not however be one of the extremes. There is a large expanse of middle ground – a zone where one is likely to find the overwhelming majority of consumers – if only there is a will to explore it.
Featured article edited by SBC from ‘Winning Post’ Sunday 10 October 2021 (click on the below logo to access a full unedited version)