Changes to LCCP on ADR, CI and RET contributions
- Executive Summary
- Alternative dispute resolution
- Customer interaction
- Research, Prevention and Treatment contributions
- Appendix A: Amended social responsibility code of practice 6.1.1 – complaints and disputes
- Appendix B: Amended social responsibility code of practice 3.4.1 – customer interaction
- Appendix C: Amended social responsibility code of practice 3.1.1 – combatting problem gambling
Research, Prevention and Treatment contributions
In our February 2018 review of research, education and treatment we acknowledged that the current arrangements, which rely on a voluntary funding model, have fallen short of their objectives. To address this, we committed in this review and in our advice to the Department of Digital, Culture, Media, and Sport (DCMS)’s Review of Gaming Machines and Social Responsibility Measures, to improve the transparency of the amounts and destinations of RET funding, including those which are made to organisations other than GambleAware.
At the moment, core funding to address gambling harms is through a system under which the amounts contributed by gambling businesses are voluntary and LCCP requires licensees to make an annual financial contribution to one or more organisation that delivers each of the aspects of research, harm prevention, and treatment. In practice, the highest volume of contributions is made to GambleAware. However, contributions are also made to a wide range of bodies, both within Great Britain and internationally. Some of these organisations have a clear link to the delivery of the National Strategy but the extent of their responsibilities is unclear. In some cases, the link to both the Strategy and research, prevention and treatment of gambling harm is questionable.
On 4 December 2018 we consulted under section 24 of the Gambling Act to revise social responsibility code provision 3.1.1 to introduce a requirement that the organisations receiving funds for delivering research, prevention, or treatment from licensees be subject to approval by the Gambling Commission.
This consultation was published concurrently with the discussion paper for the content of the National Strategy, in order to increase visibility of the proposals, and attract more respondents to give their views, particularly gambling businesses and those who receive funding for research, prevention and treatment of gambling harms.
In the consultation, we proposed a framework for determining whether to approve an organisation, taking into account the following three aspects:
- Does the organisation meet the basic principles of governance set out below, as appropriate for their role?
- Is the organisation signed up to deliver one or more of the functions of research, prevention or treatment under the next national strategy, with clear roles and responsibilities?
- If appropriate and proportionate to the role which the organisation is carrying out, is there an appropriate governance framework in place?
The basic principles of governance were proposed as:
- Independence: The body is independent from the industry or from undue influence as is appropriate for their role.
- Openness and transparency: The body has open and transparent governance processes.
- Integrity: The body has a defined interest in reducing gambling-related harms.
- Clarity of purpose: The body commits to delivering aspects or actions of the strategy against a set timetable.
- Effectiveness and accountability: The body commits to full but proportionate evaluation processes, against the criteria set by the strategy.
The consultation ran from 4 December 2018 to 15 February 2019 on our online consultation portal CitizenSpace. A total of 90 responses were received, of which:
- 27 were from gambling businesses
- 20 were from respondents submitting in an individual capacity
- 11 were from charities
- 8 were from trade associations
- 7 were from local authorities
- 3 were from researchers or academics
- 1 was from a public health organisation
- and 13 were from other organisations2.
The majority of respondents agreed with the proposed change to social responsibility code 3.1.1 although some respondents recommended that a mandatory levy was preferable. Where there were concerns, these were mainly around the process and how the change would be implemented, rather than for the principle of the change itself.
A summary of the responses we received to the consultation questions, along with the Commission’s position in view of those responses, are provided below.
Summary of responses
Consultation question 1:
Do you broadly agree with the proposed change to our requirements to give clarity to operators on where contributions made under the LCCP requirement may go?
Consultation question 2:
Do you have any comments on the proposed drafting of the provision?
A significant majority of respondents broadly agreed with the proposed change, including all respondents from charitable organisations.
Some respondents felt that the code did not go far enough, or did not address what they considered to be the key issue, which was that this provision did not set a minimum expectation or a mandatory bottom limit on the value of an operator’s RET donation.
Other respondents meanwhile suggested a ‘whitelisting’ approach would be overly restrictive, and instead suggested the Commission could issue guidance on what organisations would be appropriate to make donations to. A further point of concern was that the introduction of an approval process might unfairly disadvantage organisations with a lower profile, that are smaller, that operate locally rather than nationally, or that have an existing relationship with the gambling industry.
A small number of respondents noted that Charity Commission-regulated organisations are already required to demonstrate many of the principles that we set out in the consultation, and would hope their regulated status would be taken into account in determining whether to approve the applicant to receive RET funds.
A number of respondents suggested that this provision would not prevent licensees from paying a token amount towards an approved organisation, while paying an equivalent or greater amount to an organisation not approved by the Gambling Commission. These operators would only be able to declare the monies paid to the approved organisation as their RET contribution, but they may still seek to gain possible reputational benefit from a relationship with the unapproved organisation.
Consultation question 3:
Do you have any other comments on the requirement on businesses?
Some respondents again noted their support for the introduction of a set mandatory levy. While this was particularly backed by charitable organisations, a good proportion of licensees also voiced support for this.
One suggestion was for the establishment of a single donation recipient body to take charge of commissioning all aspects of National Strategy activity, to allow gambling businesses total assurance that they were donating to the ‘correct’ organisation.
Some industry respondents wanted an assurance that approved organisations would demonstrate appropriate transparency, to allow licensees to assess whether donating to that organisation would be an effective use of funds.
A common view from respondents was that there would need to be a relatively long transition period for introducing this requirement. Industry respondents noted that donations to organisations are commonly planned on a multi-year basis, and many, particularly smaller, partner organisations rely on regular planned donations to stay afloat.
Consultation question 1:
To what extent do you agree with the principles for bodies signing up to delivery of the new strategy?
- Independence: the body is independent from the industry or from undue influence
- Openness and transparency: the body has open and transparent governance processes
- Integrity: the body has an interest in reducing gambling-related harms
- Clarity of purpose: the body commits to delivering aspects or actions of the strategy against a set timetable
- Effectiveness and accountability: the body commits to full but proportionate evaluation processes, against the criteria set by the strategy
Consultation question 5:
Do you have any other comments on the proposed principles?
There was consistently high support for each of the five principles. Some respondents had concerns that the principle of Independence could be a blocker for collaboration between RET recipients and the industry or could mean barring individuals with an industry background as serving as trustees or directors for these organisations. Other respondents were concerned that the requirement for independence was only being considered in regard to gambling businesses.
Respondents had queries around how the approval process would function, including what information would be required on application, whether applicants would have the right to appeal a non-approval, what if any process would be in place for assessing the continuing suitability of an organisation after it has been approved, what sanctions could be placed on an organisation that falls short of these principles once approved, and whether there would be a process for assuring a balance in resources for all strands of the National Strategy.
Consultation question 6:
We believe it is implicit that most funding under the LCCP requirement will be targeted reducing gambling harms in Britain. However, in order to promote the principle of international co-operation, we recognise there may be instances where organisations signed up to deliver the strategy are based in other jurisdictions. We are of the view that in these circumstances their work should have a clearly defined link to the impact of reducing gambling harm in Britain. To what extent do you agree with this assessment?
Most respondents agreed with this assessment.
We are grateful to all those who took the time to respond to the consultation. We acknowledge the broad support for the proposals and note concerns where they have been raised.
The Commission is committed to pushing industry to meet their responsibilities under the current voluntary arrangements and we believe that implementation of this revised code is necessary to ensure that RET funds are targeted at the delivery of the National Strategy. It will also reduce the number of irrelevant bodies in receipt of RET funds, target funds towards efforts to reduce harms in Great Britain, and reduce the risk to licensees that they will select an inappropriate recipient in breach of code provision 3.1.1.(2).
The nature of the voluntary system means that it is beyond the Gambling Commission’s remit to seek to impose a levy ‘by the backdoor’ by, for example, mandating a minimum RET contribution from all licensed operators. Even those licensees who make a contribution of £1 are technically compliant with the LCCP requirement, even though this brings into question whether they are acting in the spirit of that requirement or their wider social obligations
We anticipate that the change will allow us to connect licensees to organisations that are fully committed to delivering the National Strategy, regardless of their size, and create a clear distinction between donations made by licensees to further the National Strategy, and donations made to organisations for other purposes. We remain open to organisations based outside Great Britain seeking to be designated as an approved RET recipient, dependent on them meeting the necessary requirements, and demonstrating a clear commitment to delivering the goals of the National Strategy within Great Britain.
We take on board the concern that a transition period is necessary to support continuity of existing provision and we will consider this risk in particular as we take steps over the coming months to develop the policies and processes to implement this provision. We also take on board the concerns around how the approvals process will be administered. We do not anticipate that this will be an onerous process but are committed to working further with bodies currently in receipt of RET funds to develop the eligibility criteria and process for organisations to be approved by the Commission in the future alongside an appeals process. This information will be made public well in advance of the code coming into force.
We have made a further amendment to the wording to put beyond doubt that licensees can meet their requirements under this provision by supporting bodies that commission research, prevention or treatment – even where they do not directly deliver such activity. This reflects the important principle that effective commissioning is an important part of the system, and supports effective delivery.
ADR-CI-RET response: Summary of consultation responses: Customer interaction Next section
ADR-CI-RET response: Appendix A: Amended social responsibility code of practice 6.1.1 – complaints and disputes
Last updated: 20 August 2021
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