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Advice to Government - Review of the Gambling Act 2005

The Secretary of State asked the Gambling Commission to provide advice on Government policy and legislation in relation to the Gambling Act 2005.

Published: 27 April 2023

Last updated: 27 April 2023

This version was printed or saved on: 28 February 2024

Online version: https://www.gamblingcommission.gov.uk/about-us/guide/advice-to-government-review-of-the-gambling-act-2005

Overview: ## Introduction

This is a HTML version of the introduction and summary to our advice. You can also view and download our Full advice to Government - Review of the Gambling Act 2005 (PDF), which includes our full advice and recommendations for each area.

All links and references to evidence sources correct at time of publication.

The Gambling Commission (the Commission) is the independent regulator of commercial gambling in Great Britain. As part of its role, the Commission provides formal statutory advice to the Secretary of State under Section 26 of the Gambling Act 2005 (opens in a new tab) (the Act).

From December 2020 to March 2021, the Department for Digital, Culture, Media and Sport (DCMS) conducted a Call for Evidence on the Gambling Act 2005 (opens in a new tab), the Act which sets out how gambling in Great Britain is regulated. The Secretary of State has asked the Commission to provide advice on Government policy and legislation in relation to gambling and specifically on each of the topics of the Review.

This document sets out the Commission's advice on each of the following topics:

The Government’s Review is of the Gambling Act 2005, which does not relate to the National Lottery. Therefore, the regulation of and any commentary on the National Lottery is outside of the scope of this advice.

In forming our advice, we have considered the widest range of evidence and applied a rigorous, consistent, and transparent evidence assurance process. The evidence assurance process enabled us to determine the strength of the evidence base and the weight that could be applied to the formulation of our recommendations.

Where there was a lack of conclusive evidence, we took the position that this did not automatically mean that conclusions could not be reached or that action should not be taken. In some of our recommendations we have applied the precautionary principle where the potential for harm existed. We have, however, been transparent in our advice where we are advocating a precautionary approach.

The Commission has also drawn on the input of our three advisory groups; the Lived Experience Advisory Panel's (LEAP) advice to the Gambling Commission (PDF) (opens in new tab), the Digital Advisory Panel's (DAP) advice to the Gambling Commission (PDF) (opens in new tab) and the Advisory Board for Safer Gambling's (ABSG) advice to the Gambling Commission (PDF) (opens in new tab).

The importance of the Review

We welcome the Government’s Review of the Gambling Act 2005. Since the Act came into force 15 years ago, the gambling industry has undergone significant change and is very different to the one that existed during the passage of the Act. We now see an industry that before the COVID-19 pandemic was generating over £10 billion in Gross Gambling Yield (GGY) annually, and an online sector that was already larger than premises-based gambling.

Against that, our regulation of gambling has continually evolved to meet the fast-changing and increasingly complex nature of the sector. Yet critically, the Gambling Commission’s three core priorities as set by our licence objectives remain as important now as they did then:

In recent years the Commission has continually strengthened regulation to protect consumers and increase compliance with the licensing objectives. We have systematically ramped up our compliance and enforcement action. Since 2017 and 2018, we have issued over £100 million of penalty packages and revoked 10 operator licences. During that time we have also:

Under the current legislation, we have continued to make gambling in Great Britain fairer and safer. However, the Review of the Act creates a rare and important opportunity to build on that progress and ensure that the regulatory system is equipped for current and future challenges.

Our overarching recommendations to Government

Whilst we consider that the core elements of the Gambling Act 2005 remain valid, there are two overarching recommendations for Government that need to be central to any package of reforms. There is a need for both:

Need for legislative change, alongside regulatory change

The Review is a once-in-a-generation opportunity to deliver further substantial strengthening of the current regulatory framework which needs to deliver against progressive innovations in product offerings and an evolving market. We recognise that the Gambling Commission will have an essential role to play in delivering many of the outputs of the Government's Review through changes to our regulations and through the exercise of our regulatory powers. However, the pace of reform will be driven by ensuring effective use is made of all the statutory and regulatory levers available under the Act.

It is therefore essential that Government considers making appropriate use of legislative changes including the powers of the Secretary of State to make licence conditions, alongside the Commission’s powers to make conditions and enforce changes to regulations.

Need for significant investment and greater flexibility in the regulator’s resources

To deliver an effective regulatory system, there is a need for significant investment and greater flexibility in the resources of the regulator. The pace of reform and success of the Government’s Review will also be driven by the resources and funding that is available to the Commission.

It is therefore essential that the drive to substantially strengthen the regulatory framework is accompanied by an equivalent strengthening of investment in the Commission’s capacity and resources and in its ability to flex its resources to meet emerging risks. There have been some steps to address the significant funding gap that the Commission has faced with a recent fee increase, but this needs to be built upon and accelerated. Even to continue to deliver current regulatory standards requires additional resources and greater flexibility to meet the challenges of regulating a complex, and dynamic market.

Maintaining momentum

Whilst the Review progresses and any legislative changes make their way through Parliament, it is important that we do not lose the regulatory momentum we have built over recent years.

The Commission will continue to use its existing resources as effectively as possible to keep driving up standards in the gambling industry. We will focus on making more effective use of industry data as a regulatory tool alongside implementing a more robust and timely approach to measuring participation and prevalence of problem gambling. We will continue to invest in the skills and capabilities we need to respond to the challenges of regulating an increasingly global and complex market. We will also enhance our co-operation with our international regulatory colleagues to address many of the risks that come from overseas unlicensed operators.

How our recommendations and actions will continue to make gambling fairer and safer

The Government’s Review of the Gambling Act 2005 has been extremely wide-ranging. We have set out a detailed package of recommendations for Government and actions that we as the regulator will implement. These are summarised in our Package of recommendations for Government and commitments for action by the Gambling Commission, and explained further in the sections on each topic.

Where we make commitments for ongoing action, we are committed to doing so through effective consultation processes. We will work closely with Government to ensure close cooperation on our ongoing programme of work and on the outputs of the Review.

The package of measures which we will implement or which we recommend includes protections that apply at each stage of the consumer journey, which will make gambling products inherently safer but also support and empower customers to control and manage their gambling and to seek redress where things go wrong. Therefore, our recommendations are designed to strengthen regulation in the following ways:

The following highlights some key recommendations and actions from our advice.

Make the provision and marketing of gambling safer

Our key recommendations and actions include.

We recommend an increase of age limits to 18 years of age for lotteries, football pool betting and slot-style gaming machines. We also recommend that Government introduces stake limits for online slots.

Alongside these legislative changes, the Commission will consult on a significant package of measures on online gambling to include identification of financially vulnerable customers and to tackle unaffordable gambling, alongside increased protections for young adults.

Where bonus offers are made available, we will also consult on restrictions to ensure they do not encourage excessive gambling.

Further empower consumers

Our key recommendations and actions include.

We recommend that an ombudsman should be introduced to allow consumers greater and more transparent access to redress and that this must have legislative underpinning.

We will consult on further empowering the consumer through the role of deposit limits, and to enhance protections to enable customers to choose when they receive direct marketing.

Improve the effectiveness of the overall system

Our key recommendations and actions include.

We seek critical additional powers to tackle illegal gambling without delay and the ability to invest in data and data driven compliance. There is also a need for urgent secondary legislation to tighten legislative provisions which are being exploited by a novel market, putting consumers at risk.

Alongside this, there is a need to implement long-term, sustainable, non-voluntary funding structures for wider research, and for prevention and treatment, though the model for each of these may vary.

Package of recommendations for Government and commitments for action by the Gambling Commission

This is a HTML version of the introduction and summary to our advice. You can also view and download our Full advice to Government - Review of the Gambling Act 2005 (PDF), which includes our advice and recommendations for each area.

All links and references to evidence sources correct at time of publication.

These are the actions we will take and the key recommendations that we make on each of the topics of the Review of the Gambling Act 2005.

1. Online protections, players and products

Protections for consumers online should apply at each stage of the customer journey. The appropriate controls and gaps are set out further in the section of the full advice on the customer journey.

There has been a significant programme of work which spans each stage of the customer journey - preventive measures include banning credit cards and risky product design features; and measures which support individuals who show signs of harm. We have also significantly strengthened the requirements on operators to identify customers at risk of harm and take action.

The Gambling Commission commits to extending this work further. For preventative action, we will extend our review of product features (which initially focussed on online slots) to strengthen rules relating to intensity of play on other products.

We intend to consult further on customer interaction and how operators identify customers at risk of financial harm, with a focus on financially vulnerable customers, and tackling binge gambling and significant unaffordable gambling over time, working with Government.

There is a role for stake limits on online slots as part of this wider package of protections to limit the potential for gambling related harm. We recommend that Government should introduce stake limits for online slots and consideration should be given to tailoring stake limits to individual risk.

Alongside stakes, there is a need to extend the role of player-centric controls, in particular the role of deposit limits and the extent to which such gambling management tools should be encouraged or mandated. We will consult further on this issue, working with Government.

The Commission will consolidate good practice information and reinforce our expectations for operators on contracting with third parties, including white label partnerships.

The Commission will review whether recent changes in payment services and verification capabilities could be leveraged to further enhance identity verification and reduce risk for customers in vulnerable situations.

The Commission will conduct a review of the status of customer funds protection in the event of insolvency and of transparency across the remote industry to help inform consideration of whether further strengthening of requirements is necessary.

2. Safer gambling and public health messaging

It is important that independent, clear and meaningful public health messaging about wider safer gambling and the risks of gambling is applied in all forms of messaging to consumers and the public. We recommend that Government take forward work across departments and with public health organisations to develop appropriate public health messaging to be adopted by all bodies with a part to play in reducing gambling harms. Industry should not take the lead in developing such messaging.

As the industry regulator, we will make full use of our regulatory powers to ensure that gambling operators engage with and embed appropriate messaging in their own advertising and communications with consumers, and fully integrate this messaging into the customer journey.

3. Advertising, marketing and sponsorship

Targeted action around advertising and sponsorship is necessary, especially to better ensure that children and people who may be vulnerable have significantly reduced exposure. This will involve the following.

Further reducing the visibility of advertising to those who are too young to be able to use advertised products and services. We fully support the Committees of Advertising Practice (CAP) introduction of tougher rules regarding the appeal of adverts to under-18 year olds and we are working with them to ensure sector-wide compliance. Government should require social media platforms to do more to prevent under-18 year olds being able to follow, view and interact with gambling content and introduce clear, transparent, ‘one click’ opt-outs from gambling advertising.

Reducing the visibility of advertising to individuals or groups identified as being at risk of harm. We recommend that Government consider a ban on shirt sponsorships in some elite sport competitions where there is a significant following of under-18 year olds, such as the English Premier League. We also recommend that government seeks to limit the amount of gambling adverts and/or sport sponsorships promoted within elite sports stadia.

Ensuring that incentives are only offered responsibly. We will undertake a review of incentives such as free bets and bonuses to ensure that they are constructed in a socially responsible manner and do not encourage excessive or harmful gambling.

The Gambling Commission also commits to exploring the case for further restrictions on cross-selling and to giving greater power to consumers on the types of direct marketing they receive.

4. The Gambling Commission’s powers and resources

The Gambling Commission must have a more flexible and effective funding mechanism that allows us to deliver our statutory functions to meet current and future regulatory challenges.

There is a need for significant investment, particularly in data systems in order to apply big data approaches to understanding consumer behaviour and operator compliance. We support funding for the Commission to make available further regulatory data in an open data approach.

The Commission requires additional powers at the earliest possible opportunity to better tackle illegal gambling through disruption activity and the ability to streamline some regulatory actions. We also recommend changes to legislation at the earliest opportunity making it clearer what constitutes an illegal lottery, free draw, prize competition or betting prize competition and to address other loopholes which currently exist and leave consumers exposed.

In a world of increased business complexity and internationalisation, change is needed to make it simpler to take the appropriate action to safeguard consumer interests quicker, for example where there are changes of corporate control and licence surrender.

5. Funding for wider research

The mechanism for funding research, prevention and treatment should no longer be based upon a system of voluntary contributions. Long-term, sustainable funding mechanisms are needed, though these may differ for each of research, prevention and treatment.

This Review provides government with an opportunity to resolve the longstanding issues that are inherent with a voluntary system and implement a more robust approach that will deliver an effective, sustainable, and appropriately funded system for reducing harms from gambling.

6. Consumer redress

There should be a new single ombudsman scheme for consumer redress. The scheme would replace all current Alternative Dispute Resolution (ADR) providers and consider all disputes between gambling operators and consumers, including those relating to gambling harms. The effectiveness of the scheme would depend on the following:

7. Age limits and verification

The legal age for lotteries, football pools and category D slot machines should be raised to 18 years of age.

The Gambling Commission has strengthened the requirements for online age and identity verification and is taking steps to strengthen age verification testing and assurance in premises.

We would not recommend any increase to the number of gaming machines that alcohol-licensed premises are automatically entitled to site (currently two) until there is robust evidence that the alcohol-licensed sector can demonstrate its ability to manage the risks to children and young people from accessing age-restricted machines.

Government should strengthen the powers in the Act to enable provisions on the prevention of underage gambling to have binding effect on alcohol licences, subject to the Commission consulting on changes to its code of practice.

8. Protections for young adults

Adults may be in a vulnerable situation at any age, and young adults may be additionally vulnerable to gambling harms due to a combination of biological, situational, and environmental factors.

Protections for consumers online should apply at each stage of the customer journey, and these protections should be equally effective for young adults. Gambling operators are already required to consider vulnerability because of age and we will reiterate this in the next stage of our customer interaction work and our forthcoming statement on vulnerability.

We have recommended measures in this advice which would provide additional protections or have particular benefit for young adults.

9. Land based gambling

The Gambling Commission has previously advised that account-based play could have an important role in protecting consumers of land-based products. Government should continue to push operators to make progress to identify customers at risk of harm using such technology, proportionate to the risks.

The Commission are supportive of amending land-based controls to take account of changes in technology and consumer behaviour, ensuring that such amendments include appropriate safeguards for consumers, avoid unintended consequences and have due regard to the original intentions of Parliament. The Commission and local licensing authorities would also need to be resourced to monitor operator compliance with, and the impact of, any such changes.

It would be appropriate for some restrictions currently in the Act or in regulations to be removed, and allow technological changes to be reflected in requirements more easily over time. This may for example apply to areas such as cashless payment technology for gaming machines.

App-based digital payment technology could be one way of delivering cashless payment solutions in the land-based sectors, and may be one of the more effective ways for also delivering improved safer gambling and anti-money laundering controls.

Alternatively, any move towards allowing debit card payments (or payments via interfaces like Apple Pay) directly on gaming machines would need to strike an appropriate balance between regulation applicable to modern payment methods, consumer benefits and protection of the licensing objectives. In this context, the onus should be on the industry to demonstrate how any developments can be offered in a manner which does not increase the risk of gambling harm or gambling-related crime.