David Clifton: Licensing Expert – UK stakeholders point towards ‘Safety First’ approach on player protections

Last week, I chaired an excellent gambling conference on the subject of “Player Protection”. The event was attended by a broad cross-section of stakeholders – licensed B2C operators (both land-based and remote and from different sectors of the industry), B2B gambling software and age/identity verification providers, gambling industry lawyers and consultants, gambling-related harm treatment providers, experts in gambling blocking and self-exclusion software and a (if not “the”) UK’s leading university professor of gambling studies.

Coupled with the following day’s “Player Protection Workshop”, it provided a perfect example of all such parties coming together in collaboration to address the burning issue of responsible – or, as the Gambling Commission would now term it, safer – gambling. To explain this difference, the Commission’s CEO, Neil McArthur, has said: “Responsible gambling suggests that the individual customer is principally in charge of keeping themselves safe. By focusing on safer gambling, we want to emphasise that there is a clear onus on gambling operators to protect their customers.”

It is a very great shame that no-one from the Gambling Commission attended this conference to witness the commitment to raising standards of player protection on the part of all those present, particularly so given that it took place very shortly after the UK’s gambling regulator had published its new National Strategy to Reduce Gambling Harms that, in its own words, will “drive and co-ordinate work to bring a lasting impact on reducing gambling harms” over the next three years. Publication of the new strategy was accompanied by the launch of a new website – www.reducinggamblingharms.org – where all information on the priorities identified in the strategy can be accessed and progress tracked.

I have to admit that I did have an initial concern whether it was either desirable or a proper exercise of the Gambling Commission’s functions for it to take over primary responsibility for the new strategy from the Responsible Gambling Strategy Board (now re-named the “Advisory Board for Safer Gambling”). I wondered whether this might present a potential conflict with the exercise of its statutory role as the regulator of the commercial gambling industry.

However, I now hope those concerns will prove to have been unfounded because the bringing together of all stakeholders is the logical and sensible extension of the Commission’s now familiar call for greater collaboration in tackling gambling-related harm.

In this respect, the Commission states in the new strategy that: “working collaboratively in a coordinated manner to focus efforts and share more widely what does and does not work, will achieve greater impact than more isolated efforts”. In a rare nod in the direction of the industry, the Commission also acknowledges that: “the gambling industry is increasingly collaborating on activities to promote safer gambling”, adding that “even more can be achieved through active targeting, direction and support for this collaboration by the Gambling Commission as the industry regulator”.

However, it has also warned that “as part of the new strategy, the Commission will continue to take a firm regulatory enforcement approach whilst also further improving gambling harms research and evaluation so that there is widespread adoption of what works”.

 One of the main questions arising from the new strategy is: “who will pay for all that is sought to be achieved?’. Sands appear to be shifting insofar as answers to that question are concerned, given the following comments made by two of the main protagonists:

• At the 6^th annual GambleAware Harm Minimisation conference in December last year, Gambling Minister Mims Davies warned that a mandatory levy on licensed gambling operators to fund research, education and treatment (“RET”) of problem gambling might replace the current voluntary donation system;
• When launching the new strategy on 25 April,Bill Moyes, the Chairman of the Commission, confirmed its continuing support for a statutory levy, saying that: “no-one will be able to plan properly to deliver this strategy if prevention and treatment continue to be funded by voluntary contributions from industry or regulatory settlements following licence breaches”;
• However, on the same day, Mims Davies disagreed, saying that – “the voluntary system does work and continues to have support from government and industry ….. We believe the voluntary system is capable of delivering sustainable funding to meet the increased targets that will be set as evidence of needs emerges” although she added that “if it turns out that the voluntary system is not capable of meeting current and future needs, we will look at alternatives. Everything is on the table”;
• In a recent Public Health Journal article (in which he called on the NHS to take seriously the subject of gambling addiction), Bill Moyes has said that the Commission’s position is that “the government has the powers to introduce a statutory levy and we think they should now give that some thought – but if they’ve got better ideas, fine”.

They are not the only ones to express a view because, for example:

1. As long ago as December 2017, the Remote Gambling Association (RGA) called on the Government to introduce a statutory levy to replace the current system of voluntary funding for RET and to ensure that the National Responsible Gambling Strategy was properly funded
2. In September last year, The Labour Party proposed the introduction of a mandatory levy equivalent to 1% of each gambling operator’s GGY – up from 0.1% – in order to develop “a truly ‘world class’ RET framework”;
3. More recently, on 19 May, the Scottish newspaper, the Daily Record reported that a Scottish MP (who is also a vice-chair of the All-Party Parliamentary Group on Gambling-Related Harm) has written to bet365, Ladbrokes, William Hill, Betfred and Paddy Power in an effort to get them to support a mandatory levy to fund gambling addiction charities;
4. Proving that cross-party support for a mandatory levy exists, we currently await the outcome of Parliamentary debates on Conservative MP Richard Graham’s Ten-minute Rule Bill (entitled the Gambling (Industry Levy Review and Protections for Vulnerable People) Bill), calling on the government to institute a mandatory levy on gambling operators to fund a major independent gambling-related harm research initiative and more gambling clinics;
5. Possibly to stave off the risk of a mandatory levy being introduced, GVC Holdings PLC – the global sports-betting and gaming group and owner of Ladbrokes and Coral – has announced an increased investment on its part in RET, stating: “Having been the first and only operator to commit to doubling spending on RET (Research, Education and Treatment) to 0.2% of UK gross gambling revenue in 2019, GVC has today committed to raising this to 1% by 2022 – ten times the current minimum requirement”.

At the same time, leading industry individuals are expressing their personal views on social media.
 
One has suggested that if, as claimed, B2 gaming machines (FOBTs) caused very major problem gambling issues, could it not be expected that their removal (with effect from 1 April) will be likely to lead to the numbers of problem gamblers diminishing to such a level that the need for increased funding of RET must also be diminishing, with the consequence that further research should be conducted to establish a new benchmark for future funding requirements?

Another has, very sensibly in my view, suggested that the following questions must first be answered before consideration moves to the most effective mechanism to finance RET:

·       What services are required?
·       Who should provide them?
·       How much will they cost?
·       How will this change over time?

Amongst those considerations is the amount that the Gambling Commission receives from the financial penalties that it imposes on its licence holders from regulatory breaches (that totalled some £28 million last year). Indeed it was receipt of a portion of last year’s financial penalties that enabled GambleAware to announce earlier this month that it is to invest nearly £4million for up to three years to enable expansion of the National Gambling Treatment Service. Looking ahead, it may be thought that such a source of funding is unlikely to diminish given that the Gambling Commission has just imposed financial penalties totalling £4.5million on four remote casino operators for customer interaction and AML failings

Turning to other recent developments, those most recent penalties (and their association with the Gambling Commission’s crackdown on online casinos commenced at the beginning of last year) seem to have been the trigger for a letter written by Tom Watson (Deputy Leader of the Labour Party) to the CEO of the Commission and  the Culture Secretary – reported in The Times on 20 May – demanding that all UK licensed remote casino operators should have to re-apply for their operating licences. A draconian demand but, with all that is presently rocking the UK political landscape, it is not one that should be ignored.

In what was a coincidence of timing, on the same day it was confirmed that the UK’s largest online gambling operators are forming a new trade association to replace the Association of British Bookmakers and the RGA with, no doubt, a mission to regain public trust. They will have a mountain to climb if statistics published by YouGov on 17 May are to be believed. YouGov maintains that its recent poll shows that 70% of UK online gamblers don’t believe that the industry is serious about responsible gambling. However, for reasons that I explain in detail on the Clifton Davies website, I believe that YouGov’s findings should be treated with a large dose of caution.

That said, a significant degree of self-harm was incurred by the industry from the lapse of judgment that accompanied the launch of so-called “high-stakes betting games” by Paddy Power and Betfred on the same day that the FOBT maximum stake reduction to £2 took place, leading the Secretary of State to say in Parliament that “the actions of those who tried to find a way around the procedures banning the things that we across this House have decided should be banned were disgraceful”.

Gambling advertising and, in particular, its effect on children and young people, remains an emotive issue, notwithstanding:

• the new gambling advertising standards to protect under 18s that came into effect on 1 April
• the LCCP changes on age and identity verification for remote gambling that came into effect on 7 May, and
• the use by the ASA of new monitoring technology in the form of child ‘avatars’ – online profiles which simulate children’s browsing activity – to identify gambling ads that children see online.

Two developments earlier this month that may have direct bearing on such concerns are:

1. the publication earlier this month by the Gambling Commission of a new framework to understand and measure the gambling harms experienced by children and young people, and
2. the launch of a wholly new trade association, Responsible Affiliates in Gambling (RAIG), chaired by former RGA CEO Clive Hawkswood and intended to promote social responsibility and a safer gambling environment for consumers, that will no doubt focus heavily on minimising the risk of further advertising standards breaches that have so often been committed by marketing affiliates.

Finally, to return to where I began, the Commission has posted on its website details of a further co-creation workshop that it has hosted, on this occasion on the subject of the evaluation of safer gambling products and processes.

As all operators should carefully note, the Commission’s new National Strategy outlines the increasingly important role of evaluation in order to understand more about what works to reduce gambling harms, stating as follows:

“Well-designed and well-delivered evaluation will be a core part of the evidence base for widespread adoption of measures proven to reduce gambling harms. Good evaluation looks not only at the process but also the impact on people and behaviour. In order to achieve the overall aim of the strategy, a greater understanding is needed of the impact that interventions and activities have on how people gamble, how they experience harm, and how they respond to prevention and support activities and interventions. This means that evaluation needs to be built in from the beginning of an intervention or project”.

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David Clifton – Director – ‎Clifton Davies Consultancy Limited