6 February 2025 - Minutes of the meeting of the Board of Commissioners

Minutes of the meeting of the Board of Commissioners, Thursday 6 February 2025.

10:00 Board room at Victoria Square House, Birmingham and via Microsoft Teams.

Commissioners:

• Charles Counsell (Interim Chair)
• Lloydette Bai-Morrow
• Helen Dodds
• Sheree Howard (until 15:30)
• Claudia Mortimore
• Helen Phillips
• Andrew Rhodes
• David Rossington.

Executive team:

• Helen Child
• Lucy Denton (until 14:00)
• Katharine Diamond
• Helen Gibson
• Natasha Harris
• Tim Miller
• Alistair Quigley
• John Tanner.

In attendance:

• REDACTED (Item 13 only)
• REDACTED
• REDACTED (Items 9 and 11)
• REDACTED (Secretariat)
• REDACTED (Item 7 only)
• REDACTED (Item 6 only)
• REDACTED (Item 8 only)
• REDACTED (Item 8 only)
• REDACTED (Item 7 only)
• REDACTED (Item 13 only)
• REDACTED (Items 9, 11 and 12)
• REDACTED (Items 9 and 11)
• REDACTED (Secretariat).

External attendees:

• REDACTED
• Capital Law (Item 13 only)
• REDACTED
• Hogan Lovells (Item 13 only)
• REDACTED.

Observer:

REDACTED (Items 2 to 12).

Apologies:

• Sarah Gardner
• Kay Roberts.

Item 1: REDACTED

Item 2: Welcome, apologies and declarations of interest

2.1 The Interim Chair welcomed attendees to the meeting, noting that apologies have been received from the Deputy CEO and from the Director of Operations from Sarah Gardner and Kay Roberts.

2.2 REDACTED submitted a new declaration of interests.
REDACTED

2.3 REDACTED submitted a new declaration of interests.
REDACTED

2.4 REDACTED

2.5 Board noted that Item 7 is now scheduled for after lunch.

2.6 REDACTED

2.7 REDACTED

Item 3: Minutes, actions and forward look

3.1 Board were asked to agree the minutes of the Extraordinary Board of 11 December. The minutes were reviewed and agreed as a true record of the meeting subject to the following changes:

Paragraph 5.3 to be reviewed to reference mediation rather than meditation.

3.1.1 Board were asked to agree the minutes of the private session of Board on 11 December. The minutes were reviewed and agreed as a true record of the meeting.

3.2 Board were asked to agree the minutes of the Extraordinary Board of 18 December. The minutes were reviewed and agreed as a true record of the meeting.

3.2.1 Board were asked to agree the minutes of the private session of Board on 18 December. The minutes were reviewed and agreed as a true record of the meeting.

3.3 Board were asked to note the updates to the Actions Log for information:

• updates have been noted in red
• action 21/24 is updated to note that a list of duties was completed. This will be circulated to Board to close the action
• action 28/24 – an email was shared with Board to close the action.

3.4 Board were asked to note and comment on the Forward Look for information.

Board enquired whether the Annual Report and Accounts will be submitted to the July Board and were advised that this was the plan for a pre-recess laying.

Item 4: CEO’s report

4.1 Board were asked to note the report for information.

4.2 Board noted a further update on accommodation.

4.3 REDACTED

4.4 REDACTED

4.5 REDACTED

4.6 REDACTED

Item 5: Chair's report

5.1 Board were asked to note the report for information.

5.2 Board noted that focus of the Interim Chair has been on meetings internal and external, including meeting the chairs of all the Expert Groups. Regular meetings are being scheduled between the Gambling Commission CEO and Chair and the Allwyn CEO and Chair, and Board noted reflections on the first of these meetings.

REDACTED

5.3 A joint ExCo and Board away day has now been scheduled. An evening session will include discussion of relationship building and working together. During the away day, there will be a session on progress made on the strategy, to set out a framework of how the Commission might measure against impact metrics. There will be a discussion on the risks to achieving the strategy. The Board Effectiveness Review (BER) will be tabled to the March Board meeting to allow for a discussion on the BER and the Great Place To Work (GPTW) results. Finally, there will be a session on risk profile and risk appetite.

5.4 REDACTED

5.5 Board were advised that contact has been made with the Public Bodies appointments team in respect of the Chair recruitment. Comments have been provided on the recruitment pack for the role to ensure that it is up to date.

REDACTED

5.6 There is a detailed review underway of Expert Groups so there will not be any external recruitment to groups at this time. A potential interim Chair has been identified for the Digital Advisory Panel (DAP) as the current Chair’s term ends in March 2025.

Item 6: Draft Strategic Assessment – Fair and Open

6.1 Board received the item for information. Board is asked to note the Executive Summary of the strategic assessment which provides an overview of the key recommendations for further work, and the ‘Introduction to the fair and open licensing objective’ for context. Board is also welcome to consider the whole assessment which provides the rationale and evidence base for the recommendations.

6.2 Board noted that the Corporate Strategy includes a commitment to increasing resource to improve our understanding of issues which pose a risk to the fair and open licensing objective. The recommendations in the assessment will be used to inform business planning.

6.3 Board enquired whether additional requirements might be applied to complaints (reporting on positive resolutions), requiring operators to publish average time for settlement for withdrawals, and to publish average return to players by product types. If so, would these changes allow the Commission to consider a state of the gambling sector report?

6.4 Board were advised that such statistics could be a useful contribution to the impact metrics. Board noted that the core remit of the Commission is not to regulate service – however, issues such as withdrawals are a good example of an area of concern under the fair and open objective. The Commission takes an interest where withdrawals are not processed quickly and in the reasons for delays. The Commission would need to consider the data available before looking at adding an additional publication.

6.5 In completing the assessment, Board were advised that the emerging consumer voice work aligned well with existing data. One surprise was consumer concern around Return To Player (RTP) and the transparency of sports market betting pricing – higher levels of concern than anticipated were identified and more work is needed to fully understand concerns. The compliance team are already incorporating fair and open into their reviews – focusing on website review which allows them to focus the lens used and to review terms and conditions in a different way.

6.6 Board reflected on the contradiction between the light touch onboarding available for consumers and the barriers in place at the point of withdrawal. A key recommendation to be delivered through compliance is to explore the quality of identity verification across operators. Some operators have a relatively low risk appetite in onboarding and others are more focused on cost reduction in this work. On false positives, transaction monitoring systems are identifying potential issues. The Commission does not have statistics in relation to false positives and how these might be dealt with by operators, reviewed and resolved. Without reviewing individual consumer complaints in detail, it is difficult to identify the scope of the issue.

6.7 Board noted that there has been a huge increase across all operators in identity spoofing. There are more consumers who are frustrated by verification, and in some cases, those complaining have been found to be using falsified documents themselves. The concern is in relation to genuinely innocent consumers – is the friction for those individuals as low as possible. Operators should not be asking for identity documents at the point of withdrawal when they could have done so earlier.

6.8 Board welcomed the paper and the degree of rigorous and careful analysis which gives assurance. The use of the assessment to support ExCo in determining priorities based on resources available indicated a clear process was in place. On withdrawals, it was noted that this issue generates a great deal of contact, and it makes sense to address that element of the agenda.

Item 7: REDACTED

ACTION: REDACTED

ACTION: REDACTED

ACTION: REDACTED

7.1 DECISION: REDACTED

Item 8: Gambling Act Review: Socially Responsible Incentives

8.1 Board received the item for decision. Board is asked to approve:

The recommendations related to consultation outcomes on socially responsible incentives to amend LCCP SR Code 5.1 (Rewards and Bonuses), made in this paper and in Appendix A. Specifically the Board is asked to:

• agree the recommendations to proceed with new requirements to:
• set a limit of up to 10 times wagering requirements applied to promotional offers (and hence not ban wagering requirements – an alternative proposed in the consultation);
• agree to proceed as consulted with implementing a ban on mixing of products within incentives; and
• agree to proceed as consulted with implementing changes to the structure and minor wording of LCCP 5.1 (Rewards and Bonuses)
• agree to proceed as consulted and delete current SR Code 5.1.1 1(b)(i) which states ‘neither the value nor amount of the benefit is dependent on the customer gambling for a pre-determined length of time or with a predetermined frequency’.
• agree not to proceed with the proposed wording of LCCP 2 (b), requiring licensees to ensure incentives are constructed in a manner that does not ‘lead to excessive intensity’ of gambling
• to delegate authority to the CEO to finalise the wording of LCCP provisions, the content of and timing for publishing the response document, and implementation timeline.

8.2 REDACTED

8.3 DECISION: Board agreed to proceed with new requirements to set a limit of up to 10 times wagering requirements applied to promotional offers.

DECISION: Board agreed agree to proceed as consulted with implementing a ban on mixing of products within incentives.

8.4 Board were asked to consider amendments to the LCCP wording at 5.1 and to delete the SR Code 5.1.1 1(b)(i). In considering how the LCCP is used to place obligations on operators, Board were advised that the Commission needs to word the LCCP in a way that gives operators clarity. There are already requirements in other parts of the LCCP such as time and money spent which cover the underlying protections in these areas of the code – for example Licence Condition 7 covers fair terms and practices and the advertising rules (enforced by the Advertising Standards Authority). In terms of the construction of offers there are adequate protections in place in section 5 but it is helpful to consult. There is space to consider some clearer codes in this area. Where these provisions are introduced, there will be a close review of the impact. There is an evaluation process built into the Gambling Act Review which will demonstrate whether these changes have the desired impact.

DECISION: Board agreed to proceed as consulted with implementing changes to the structure and minor wording of LCCP 5.1 (Rewards and Bonuses).

DECISION: Board agreed to proceed as consulted and delete current SR Code 5.1.1 1(b)(i).

DECISION: Board agreed not to proceed with the proposed wording of LCCP 2 (b), requiring licensees to ensure incentives are constructed in a manner that does not ‘lead to excessive intensity’ of gambling.

8.5 REDACTED
DECISION: REDACTED

8.6 Board were advised that the evaluation of changes of outputs will be considered, starting with waves of testing through a range of tools. There has been some timing impact as a result of the general election. It is expected that interim results will be available by Quarter 1 2025 to 2026. The overall results of the evaluation will be available at the end of 2025 to 2026.

REDACTED

The Interim and full evaluation results will be shared to Board when available.

Item 9: Draft Business Plan and Budget 2025 to 2026

9.1 Board received the item for discussion and endorsement:

• Board is asked to advise if there are any activities or workstreams missing from the priority business plan
• Board is asked to endorse the proposal to prepare the final budget for 2025 to 2026 with a utilisation of around £5 million from the Reserve.

9.2 Board noted that a significant amount of time has been spent reviewing plans and priorities with the Executive Team. Work has been categorised as Must, Should and Could and is underpinned by work reviewing costs and the overall budget capacity to include a drawdown of £5 million from reserves.

9.3 The paper sets out key assumptions as well as items not yet included in this draft (including accommodation). Funding for next year and future years is linked to the interim fees review.

REDACTED

9.4 Fourth National Lottery (4NL) is outside of the scope of the budget as it is funded separately. The focus is on continuing work underway to deliver the Corporate Strategy and foundational work. Board is invited to endorse option 4 within the paper and Board noted that year 2 is focused on foundational work to ensure that the necessary requirements are in place to deliver the strategy.

9.5 REDACTED
ACTION: REDACTED

9.6 REDACTED

9.7 REDACTED

9.8 REDACTED

9.9 REDACTED

9.10 On vacancies, Board noted that the higher level of vacancies in future years is based on experience and considering a future reduction in the size of the organisation. The Executive have discussed at length that there is a ceiling to the size of the organisation and work is ongoing to consider how we better utilise existing resource.

9.11 REDACTED

9.12 REDACTED

9.13 REDACTED

9.14 Board noted paragraph 34 of the paper covering activity excluded from the 2025 to 2026 budget.
ACTION: REDACTED

Item 10: Audit and Risk Committee Assurance Report

10.1 Board received the item for assurance. The Board are asked to note that the Audit and Risk Committee (ARC) gives the Board assurance that the items dealt with in this report have been scrutinised and reviewed by the Committee, and are accurate and reliable, to the best of the Committee’s knowledge.

10.2 Board received a verbal update on the extraordinary meeting of ARC held on 31 January, noting that the Committee welcomed Rachel Sexton as a new independent member of the Committee. The meeting covered the Assurance Review of decommissioning Siebel and noted that the review did not include a RAG rating, but if the reviewers were to apply a rating it would be Amber. ARC took comfort from the plans to delay changes to the finance system, which removes an additional pressure on the decommissioning timeline.

10.3 ARC received high level planning following the Case Management System (CMS) discovery process and welcomed the clarity of the planning and sequencing of work. There are risks but the Committee took good assurance from the papers presented.

10.4 In respect of the descoping of the Ops Improvement programme, ARC received a paper setting out workstreams to be stopped and continued.

10.5 Finally ARC received a proposal to establish a Change and Resilience Committee and ARC took a unanimous view that this Committee should not have non-executive membership.

10.6 REDACTED

10.7 Board noted that plans to remove reliance on Siebel REDACTED are on track. The CMS will be implemented before that date, but the CMS does not replace the full functionality of Siebel. Board welcomed the assurance provided by ARC.

Item 11: Finance Report

11.1 Board received the item for information. Board is asked to consider if there are any decisions required which alter rollout of projects impacting resource requirements and delivery plans in the strategy.

11.2 Board noted that there was limited movement in the financial reporting in December 2024, but there has been a minor change in the overall budget position. No significant further changes are expected in year, subject to the potential risk presented by the Accommodation Strategy. There was no major reporting on the National Lottery regulation budget. Revised legal forecasts are awaited on the programme, and a formal request has been made to the Department for Culture, Media and Sport (DCMS) to use contingency on the litigation.

11.3 On income, there are some surrender assumptions in place to cover potential losses but no expectations of major movements.

There have been income losses as a result of category breaches by two operators (where licence fee categories should have been varied).

Additional work is in place in the Finance team to identify category changes based on trading patterns so that we can proactively identify operators nearing the category thresholds. There is no mechanism to claw back fees where operators have breached categories – the Commission has no legal recourse to reclaim funds after the fact. In terms of enforcement, it is a requirement for operators to pay the correct category fee but decisions on action may need to take into account other factors. The intent in the long-term fees authority work is that fees will be based on prior year activity and therefore this issue would not arise.

11.4 Board noted that the explanation of the events impacting the forecasting accuracy is clear. On vacancies, it was noted that the figure has reduced to under 30. This is because all vacancies have been reviewed and challenged on requirement and timing.

11.5 Board noted the level of detail provided in the Finance papers and suggested that that in light of the improved forecasting accuracy, reporting might now be reduced – one suggestion was to remove the directorate level reporting.
ACTION: REDACTED

11.6 Board noted that there are 7 Contract Managers who have not yet confirmed that they have read the Procurement Policy and emphasised the importance of good contract management practice.

Item 12: November and December 2024 Performance Report

12.1 Board received the item for information. Board was asked to note the performance reports and conclusions.

12.2 Board noted that the pack was presented and discussed at ExCo last week and the aim going forward will be to present the most up to date report rather than consolidate to a quarterly report.

12.3 Key highlights are zero hours of downtime in IT for the past 18 months and that organisational turnover continues to decrease. The papers also included more detail on discussions at ExCo and actions to address risks to performance and the business plan.

12.4 Board welcomed the month-by-month performance review. Compliance at first assessment remains a concern. Board noted that in previous periods the focus has been on LCCP 3.4.3 (Remote Customer Interaction). Most recent data shows band 3 to 5 ratings increasing, and there are multiple operators in casework as new requirements bed in. Board noted that a good level of compliance at first time assessment is difficult to quantify. The aim of the compliance team is to have a larger number of focused assessments which will impact on measures and performance. Most operators are working on three-month plans to achieve compliance with LCCP 3.4.3.

12.5 With regard to the risk to performance data as a result of moving from Siebel to CMS, Board noted that the change is service by service and process by process so transitional work will be required in some cases.

12.6 On the illegal markets work, Board enquired whether this is stretching resources in Enforcement and were advised that a specific team has been established to focus on this work. The point that does cause pressure is major cases REDACTED. As new issues are identified, there can be a pace issue in illegal markets work. The UK is being held up as a global exemplar in tackling illegal markets – however, Board noted concerns that crypto gambling is a growing issue. Cryptocurrency is not regulated, the disruption tactics are different, and traceability is more challenging.

12.7 Board noted issues with 6 Business Plan deliverables and noted that mitigating actions are in place. A number of items are linked to planned activity for next year.

Item 13: REDACTED

Item 14: REDACTED

Item 15: Any Other Business

15.1 REDACTED

15.2 Board noted the next Colleague Conference event will be held on 14 May 2025. There are 2 conference events in the year as one event covers the recognition work (our Stars of the Commission Awards) whereas the other is more focused on the business and strategic objectives.

15.3 A Connect session with Charles Counsell has been scheduled for 8 April 2025.

Meeting Closed at 16:33.