David Clifton: Licensing Expert – Last chance saloon

David Clifton

In all my 35 years advising the UK’s gambling industry I can think of no time when it has been so besieged with adverse criticism from the Government, the Parliamentary Opposition, regulators, the media and the general public alike. 

Clearly opinions on gambling (whether justified, exaggerated or prejudiced) expressed in the media heavily influence public opinion. The opinions expressed by the public carry considerable weight with both the Gambling Commission and MPs. The views of the Commission and of MPs have direct bearing on Government policy.

As matters now stand, the need for all sectors of the industry to press the “pause” button and take serious stock before a bad situation becomes disastrous has never been more critical.

The warnings have been clear.

In October, responsible gambling research commissioned by the Industry Group for Responsible Gambling was described by GambleAware as “a loud wake-up call for the gambling industry”, claiming that it:

  • Showed gambling operators, across the industry, are poor at giving staff suitable training on how to promote safe gambling amongst customers, and
  • Revealed that customers feel existing responsible gambling messages are often confusing and unclear.

A similar sentiment was expressed at last month’s Gambling Commission “Raising Standards” conference by:

  • Its chairman Bill Moyes: “I don’t think the industry gets the importance of being seen to take problem gambling seriously and to take a leading part in tackling problem gambling effectively” and
  • Its CEO Sarah Harrison: “the bar has been set too low by operators in relation to treating customers fairly”, warning the industry that: “we are at a tipping point, and …. those who do not deliver for the consumer will find themselves in an uncomfortable position, with their future in this industry increasingly in peril”.

On the same issue of fairness, the CMA has announced that it is due to decide this month whether to proceed with court action against online gambling operators for breaches of consumer law. This was immediately followed by a Commission warning to online gambling operators to review their terms and conditions before regulatory action is stepped up in the New Year to ensure that consumers are treated fairly, adding that too often it is finding that operators’ “terms and conditions have been complicated, one-sided and difficult to understand”. Such a warning is wholly in line with the Commission’s recently published strategy for the next three years that proposes tougher and broader sanctions on operators who fail to treat customers fairly and to make gambling safe”.

Examples of tougher sanctions in the last month for such failures have included:

  • Gala Interactive (Gibraltar) Limited being required to pay a total of £2.3 million for failing to effectively interact with two high-spending VIP customers, who were displaying problem gambling behaviour whilst playing Gala’s online games and, in the process, gambling away approximately £1.3 million of stolen money, and
  • Broadway Gaming having to pay a penalty package of £100,000 for failing to include significant terms linked to promotional advertisements found on five of its gambling websites.

However, the most hard-hitting warnings were reserved for GambleAware’s annual Harm Minimisation conference on December 6, when it’s Chair Kate Lampard opened the event in the following unequivocal terms: 

“I must say that it seems to me that current public opinion represents a serious existential threat to the future success of the gambling industry in Britain.. my experience of the industry thus far is that it is not wholly undeserving of the flak that it gets”. Referring to the outcome of the DCMS gaming machine review (on which I commented in my SBC News “Death knell sounded for FOBTs” article last month), she added: “I was completely unsurprised by the proposals in the government’s policy review. An industry that has devoted its energies to aggressively fighting amongst itself, served only to accelerate the rapidly falling reputation it has, and to secure essentially none of the changes to regulations each sector sought”.

On the same subject, Gambling Commission Executive Director Tim Miller didn’t hold his punches, warning delegates: “If you are a trade body, industry representative or an operator: stop battling each other and start tackling harm; stop looking over the fence and start looking at your own back yard; stop acting in a spirit of frustration and start acting in a spirit of collaboration. Use the passion that has been so evident during the gambling review and turn it into a relentless mission to make gambling safer.”

Subsequent publication of the Commission’s “Young people and gambling 2017” report, leading to media headlines such as the Guardian’s 25,000 children in Britain are problem gamblers, report finds, have served only to underline the extent of the challenge the gambling industry is facing in satisfactorily concluding that mission.

DCMS Minister Tracey Crouch rounded off the opening session of the GambleAware conference by urging gambling operators to contribute at least the recommended voluntary donation of 0.1% of their GGY to GambleAware to fund research, education and treatment of problem gambling, saying: “We want everyone to work together to improve the voluntary system and make sure it provides the support needed, but if it doesn’t we won’t hesitate to explore alternative avenues including a statutory levy. So this, folks, is really the last chance saloon on this”.

Within a week, the RGA has endorsed introduction of a statutory levy, saying that it will ensure the right funds are raised in a fair and open process and, crucially, that they are allocated in a way that is transparent, independent, and achieves measurable benefits.”

So how else can the industry meet the challenge?

The Gambling Commission’s strategy for the next 3 years contains expectations that:

  • With the aim of further protecting the interests of consumers, operators will intervene more “to make play safe and to protect consumers at risk” (backed up by the RGSB wanting to see evidence of evaluations of player protection interventions being widely carried out with greater focus on impact as opposed to process on the basis that “without evidence of what does, or does not, work, it will prove difficult to demonstrate that progress is really being made to reduce gambling-related harm”),
  • With the aim of preventing harm to consumers and the public, operators will provide consumers with more information about gambling (and its risks) and better controls to manage their gambling, and
  • With the aim of raising standards in the gambling markets, more effective and independent arrangements will be in place to resolve consumer complaints and disputes.

Its chairman clearly wants all sectors of the gambling industry to “be seen as a responsible part of the entertainment industry, which acknowledges that it has the capacity to cause harm and demonstrates a real willingness to invest in improvement, in prevention and in treatment”. He is backed up by the DCMS who “want to see industry, regulator and charities continue to drive the social responsibility agenda, to ensure all is being done to protect players without the need for further Government intervention, and that those in trouble can access the treatment and support they need.”

The CMA has made very clear its expectations that the following key consumer law concerns must be addressed by all online gambling operators immediately:

  • Lack of transparency of significant promotion restrictions
  • Restrictions on withdrawing deposit winnings
  • Restrictions on withdrawing unspent deposit funds
  • Fairness and transparency of play restrictions
  • Withdrawing free bets or reducing their value and
  • Compulsory publicity

And it has explained how its expectations can be achieved in a speech given by its Project Director George Lusty last month, available on the gov.uk website.

It is anticipated that the forthcoming Gambling Commission consultation on LCCP changes linked to the “ensuring gambling is fair and open” licensing objective (expected to run from January to April next year) will focus on similar issues.

In the meantime, operators should take note that the Broadway Gaming public statement invites them to pose themselves the following questions:

  • Have you ensured marketing communications include significant limitations and qualifications which consumers should be aware of?
  • Have you ensured marketing communications are compliant with LCCP provisions and CAP and BCAP rules?
  • Have you used the free and paid for copy advice service provided by the ASA and CAP?
  • Have you ensured contractual terms and conditions with affiliates are robust?
  • Have you ensured that affiliates are clear of their requirements regarding advertising standards and the consequences of compliance failings?
  • Are you conducting regular audits of your affiliates’ activity against your compliance policy?
  • Are you auditing new affiliates’ websites, in addition to the creative and copy used, before accepting them onto your affiliate programme?

So, to borrow Tracey Crouch’s phrase, all indications are that the British gambling industry has arrived at “the last chance saloon” and, unless improvements occur, Sarah Harrison may not be the only person leaving involvement with gambling when she leaves office at the end of February.

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