20 March 2018 - Minutes of the meeting of the Board of Commissioners

Commissioners:

• John Baillie
• Stephen Cohen
• Alison Hastings
• Bill Moyes (Chair)
• Sarika Patel
• Catharine Seddon
• Jonathan Scott

Executive directors:

• James Mackay
• Neil McArthur (interim CEO)
• Tim Miller
• David Pemberton

In attendance:

• (REDACTED) – NL Senior Licensing Manager (item 8)
• (REDACTED) – Compliance Consultant (item 6)
• James Holdaway – Head of National Lottery Licensing (item 8)
• Simon Knee – Head of Finance (items 2, 3 and 4)
• Nick Moore – Head of PMO (item 4)
• Tamsin Morgan – Head of Communications (item 5)
• Justin Oldham – Head of Governance NL4 (item 3)
• Oliver Sweeney – Head of Legal
• Helen Venn – Programme Director
• Mark Wagstaff – Head of Governance (notes)
• Richard Watson – Programme Director

Observers:

• (REDACTED)
• (REDACTED)

Apologies:

• Carol Brady
• Sarah Gardner
• Trevor Pearce
• Simone Pennie

Item 1: Welcome, apologies and declarations of interest

There were no new declarations of interest.

Item 2: Minutes and actions from the meeting on 15 February 2018

Minutes of the meeting on 15 February 2018 were agreed.

The rolling actions were reviewed and updated.

Item 3: Finance Report GCP(18)32

The Board noted the report.

Item 4: NL4th Licence Governance

DCMS Budget Approval Process GCP(18)33

The Board noted the paper.

Governance Policy and Procedures GCP(18)34

The Board noted the paper.

Item 5: Business Plan and Budget GCP(18)35

The Board agreed the Business Plan and budget. The Board delegated to the Executive finalisation of the published plan.

Item 6: Communications Strategy GCP(18)36

The Head of Communications presented the three year Communications Strategy. An operational plan would be developed from this, to support year one of the Corporate Strategy. The proposals continued the Commission’s move away from a reactive stance towards a more proactive approach.

The Communications team was working towards a digital first model, with strengthened stakeholder engagement and messaging in digital form including through social media. There would be more targeted stakeholder engagement, potentially including a focus on Boards and non-executives. The team would also consider how to make better use of Commissioner contacts.

The Board supported the proposed approach, in particular a continued focus on proactive engagement. There could also be scope for an increased role for the Board in internal communications. The team would consider this as it developed implementation plans. Consumer-focused communications, including through the Contact Centre, remained challenging.

Item 7: Annual Assurance Statement update GCP(18)37

The second full round of Annual Assurance Statements (AAS) completed in December 2017. Helen Venn and (REDACTED) set out headlines from operators’ submissions. In the second round, 18 out of 35 operators provided a direct response to the revenue question, a significant increase over the first round.

There had been an increase in compliance and AML teams in operators and predictive work was ongoing on the prevalence of problem gambling, for example operators developing algorithms and doing more Know Your Customer work.

However, there were still nine operators who gave no response to the revenue question and had been asked to resubmit. Some had refused to answer the question initially, citing it as a matter of principle, while others struggled to identify individuals at risk of problem gambling.

AAS submissions were not always signed off by PMLs in operators, however the team was seeing more Board input and assurance on operators’ submissions. As a small group of operators was starting to move ahead of its peers, the team was considering opportunities to harness the competitive edge between them.

The team confirmed that operators understood the importance which the Commission placed on compliance with the AAS process, especially as some operators were now subject to corporate evaluations and casework.

About 80% of the market was covered by the AAS process.

Board members confirmed that they were happy to be involved in engagement with operators about AAS submissions.

Item 8: Feedback from the GC/CMA/ASA trilateral GCP(18)38

The interim CEO updated on the trilateral meeting with ASA and CMA which took place on 27 February. The meeting focused on identifying ways that the three organisations could work together, with a commitment to meet regularly at both Chair and official levels. Work with ASA could include research on advertising, and work with CMA would help to deliver CMA undertakings from operators.

Joint working was likely to highlight differences in approach between the organisations, for example around willingness to be proactive and take action on a precautionary basis. The meeting had identified an appetite for joint research and it was likely that the Commission would be asked to contribute substantially to that.

Item 9: NL3rd Licence

Board Effectiveness Review GCP(18)39

James Mackay left the room before this item.

The NL Senior Licensing Manager updated the Board, following the discussion at the February Board meeting.

Marketing Investment Proposal GCP(18)40

The Board noted the proposal.

NL Update GCP(18)41

The Head of National Lottery Licensing provided the monthly update.

James Mackay returned to the room after this item.

Item 10: Remuneration Committee update

Alison Hastings provided an update from the Remuneration Committee meeting on 15 February.

Action planning from the Employee Survey was progressing. The Committee had held a deep dive on Collaboration and Innovation, ahead of the all-staff event on 26 April.

Item 11: Business update reports

CEO update report GCP(18)42

The interim CEO presented his update.

Richard Watson had participated in the FATF assessment. The assessors had focused on how the Commission undertook compliance on remote operators.

The Board recorded thanks to Paul Hope and his team for how they had managed engagement with DCMS through the review.

The online advice was due to be published the following week, to avoid leaving too long a gap from publication of the Gambling Review advice.

The Daily Mail had asked for details of all stakeholder meetings in the previous twelve months. All Exec and Board-level meetings would be disclosed, unless related to ongoing investigations.

Balanced scorecard GCP(18)43

The Board noted that this was the final time that the balanced scorecard would be brought to the meeting. From April, the new Board Performance Reporting framework would come into effect.

Regulatory Delivery update GCP(18)44

The Board noted the update.

Licencing Update GCP(18)45

Of four targets, two had been met and the remainder were set to complete by month end. Process design work with Unipart would start at the end of April.

Item 12: Board forward look

For the April meeting, the Governance Team would map Business Plan milestones onto the Board forward look. The April meeting would include staff engagement with Commissioners.

Item 13: Review of the meeting

The Board had appreciated the pace of the meeting and liked the approach of having substantive items before lunch, with reporting after.