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Report

Annual Report and Accounts 2020 to 2021

The Gambling Commission's 2020 to 2021 Annual Report and Accounts

  1. Contents
  2. Performance report
  3. A year in review

A year in review

In this section we reflect on the work we have done in the final year of our three-year Corporate Strategy to ensure strong regulation whilst protecting consumers from gambling harm.

As set out in our corporate business plan, our five key focus areas are:

  • protect the interests of consumers
  • raise standards in the gambling market
  • prevent harm to consumers and the public
  • improve the way we regulate
  • optimise returns to good causes from lotteries.

Summary of achievements – 2020-21 corporate business plan milestones

  • 33 milestones were due
  • 21 milestones were achieved
  • 10 were rescheduled and will be delivered during 2021-22
  • 2 milestones were superseded.

Summary of achievements – 2020-21 corporate business plan milestones Annual operator fee income by sector 2020-21

Annual operator income fee by sectorPercentage
Arcades6%
Betting31%
Bingo4%
Casino28%
Lotteries7%
Machines24%

The following gives details of the Commission’s milestones which were superseded or replanned during 2020-21:

Milestones superseded:

  • complete a review of online gambling protections, including controls on stakes and prizes
  • enhance the functionality of our risk assessment tool.

Milestones replanned:

  • advise the Secretary of State on the Government’s review of the Gambling Act 2005
  • publish an evaluation of our actions to reduce the risk of harm to children and young people
  • review our approach to measuring participation and prevalence and publish conclusions
  • deliver industry events and a programme of initiatives to raise standards
  • publish clearer documentation about our Corporate Governance process
  • improve the licence application process
  • implement changes to our Governance framework and practices
  • implement agreed proposals to improve our approach to regulatory data
  • provide centralised support for impact evaluation
  • enhance staff engagement including a Commission-wide staff conference.

Protect the interests of consumers

Consumers are at the heart of our regulatory approach. As gambling behaviour evolves, we work hard to stay on top of emerging trends, including those caused by the Covid-19 pandemic, to ensure our work is focused in the right areas.

Over the past 12 months we have continued to remind commercial operators of their social and consumer responsibilities and taken decisions, supported by research and our relations with external stakeholders, to take appropriate regulatory actions.

Our key activities in this area were:

  • Along with strict guidance, we wrote to online operators upon the outbreak of the Covid-19 crisis reminding them of their responsibilities to their customers with millions of people having to observe social distancing rules. This included us issuing new guidance after seeing evidence that some people may have been at greater risk of harm during lockdown. Included in that guidance were the need for affordability checks, the prevention of reverse withdrawals and restrictions on bonus offers.

  • Our Consumer Contact Centre continues to be the main point of contact for the public and players. During the 2020-21 financial year, the team received 9,304 complaints from consumers about operators which helped support and inform our regulatory approach.

  • We commissioned a piece of consumer research to understand how we can best inform consumer decision-making and assist harm prevention.

  • Through our research and insights we have constantly analysed data, markets, products and trends. These insights allow us to look at the risks and opportunities in the industry which inform our work. This year has included the growth in online gambling and consumers’ move to mobile.

  • We continued to see rapid progress through our Advertising Technology challenge to the industry, which aims to reduce the amount of online advertising seen by children, young people and vulnerable adults. This led to the production of a common list of negative search terms, a 25+ age approach to prospecting ad campaigns on social media, and better use of customer data to ensure paid-for ads are targeted away from vulnerable groups across social media platforms.

  • We continued the development of the Single Customer View project, which aims to reduce consumer harms by providing a holistic picture of a customer’s online gambling activity, including continued engagement with key stakeholders such as the Information Commissioners Office (ICO).

  • Following a successful initiative with Twitter in 2019-20, we partnered with Facebook to publish a guide for consumers on how to limit their exposure to gambling content on the social networking platform.

  • We have supported the Committee of Advertising Practice’s (CAP) recent proposals to tighten the rules around the content and targeting of gambling adverts, in particular, to further limit the appeal of gambling ads to under-18s and other vulnerable people.

  • We welcomed the commencement of the Government’s Gambling Act Review and a separate consultation on fees. We have contributed to the evidence gathering by DCMS.

Prevent harm to consumers and the public

Minimising and preventing gambling harm is a key focus for the Commission and over the past 12 months, despite the Covid-19 pandemic, we continued to use our full range of powers, working closely alongside our partners, to enhance protections for the public and players and introduce new ideas and ways of working.

Now in its third year, the National Strategy to Reduce Gambling Harms continues to offer the means for collaboration by the Commission and partners to reduce gambling harms. The Commission’s actions map tracks the significant range of positive actions across the nations and regions to support this collaboration.

Through our regulatory powers, we have also continued to take proactive action against online and land-based operators who have not done enough to protect their customers from gambling harm.

Our highlights in this area included:

In April 2020 we introduced a high profile ban on the use of credit cards for gambling and continued to watch closely for any unintended consequences for consumers.

The introduction in September 2020 of strict new guidance for operators to clean up the malpractice of so called VIP schemes.

We announced a package of strict measures in February 2021 around online slots games which included the introduction of limits on spin speeds and the permanent ban on features such as autoplay or those which celebrate losses as wins. The permanent prohibition of reverse withdrawals was also announced alongside these measures.

We closely monitored online and, where appropriate, land-based gambling patterns to understand how the Covid-19 pandemic changed the risks experienced by consumers through the collection of additional industry data and consumer research. We acted on these findings and published the information for stakeholders to inform them of developing consumer trends.

The establishment of a new Lived Experience Advisory Panel (LEAP) in February 2021 which provides independent advice based on its members’ personal experiences of gambling harms – helping to inform our decision making.

In November 2020, we published the latest actions map and update for the continued delivery of the National Strategy to Reduce Gambling Harms. This included how we continued to contribute, alongside our public health and statutory partners, to steering groups and implementation groups across England, Scotland and Wales.

We continued to work closely with a range stakeholders, particularly CAP and the Advertising Standards Authority (ASA), to respond to the recommendations outlined in GambleAware’s research into the effects of gambling advertising on children, young people and vulnerable adults.

We have reviewed and approved regulatory settlements with a cumulative value of millions of pounds for activities to be applied for socially responsible purposes.

Supporting the delivery of independent research commissioned by GambleAware, which has included the publication of reports into the impact of the behavioural change principle of anchoring, guidance for designing safer gambling messaging, and interim results from the Patterns of Play project.

Following our implementation of the requirement for online operators to participate in Gamstop, the national self-exclusion system, we continue to monitor compliance closely.

Through a consultation with the industry and other stakeholders we reviewed our approach to measuring gambling participation and prevalence.

Raise standards in the gambling market

To protect consumers, the Commission’s role is to ensure standards are constantly being raised across the gambling industry. We do this through a variety of ways – via our day-to-day licensing work, targeted compliance activity, and using our enforcement powers where we see standards are not being met.

During the past 12 months we carried out our compliance and enforcement activity through a number of challenges brought by the Covid-19 pandemic – which saw large parts of the gambling sector, including land-based businesses, closed for the majority of the year.

We continuously engaged with operators to understand the impacts of Covid-19, which included understanding which products had seen an increase in play, splits between new and existing players and increase in spend and customer interactions. This was backed up by a programme of targeted assessment work to collate evidence.

Our highlights in this area included:

We continued with our programme of compliance activity as much as possible during 2020-21. As part of our refined focus and process, we conducted 25 full assessments of online operators and five targeted assessments of land-based operators.

Additionally, we carried out 83 website reviews and 262 security audits. 29 personal licence reviews were commenced and 57 were finalised, including from the previous financial year.

We also continued with our tough enforcement activity against gambling operators and personal licence holders who failed to meet our standards. We have continued to hold operators to account for failings around anti-money laundering, social responsibility controls and customer interaction issues. Our casework led to the suspension of five operators and the revocation of one operator and nine personal management licence holders. A total of £32.1m was paid by 15 operators as a result of fines or regulatory settlements. This covered £13.2m in fines and £18.9m in regulatory settlements.

In 2020-21, our intelligence team, who provide a confidential ear to the industry and the public, as well as being our main gateway to partner agencies such as the National Crime Agency, international law enforcement organisations, and sports governing bodies, generated 3,836 intelligence reports, relating to a number of issues including social media lotteries, unlicensed remote operators and money laundering. 29 Incident Referral Forms (IRFs) were submitted by the unit to Incident Management Group (IMG) for consideration.

Aside from a variety of other intelligence which was processed, our Sports Betting Intelligence Unit received over 700 specific reports which included issues such as suspicious betting activity, sports rules breaches, misuse of inside information, Gambling Act offences or other criminality. Football and tennis continue to be the source for the majority of these reports, despite disruption to the calendar due to Covid-19.

Following the test house framework consultation, we worked with the United Kingdom Accreditation Service (UKAS) and all test houses to implement changes aimed at raising standards in the industry.

We have continued to work to shut down illegal gambling, working closely with law enforcement agencies, the UK Cyber Centre and consumers to gather intelligence and take action against black market gambling.

We have assessed the ongoing suitability of our licensees by using a variety of tools, such as regulatory data and interaction with stakeholders. In the past year we have processed 170 operator licence applications, with 545 individuals applying for a personal licence.

We published our third annual Compliance and Enforcement Report which outlined case work during 2019-20 alongside recommendations and case studies for operators.

We continued to ensure Boards focused on their responsibilities to be tested via corporate evaluations and assurance statements.

We supported the UK Government in developing the role of the Regulatory Supervisor for Money Laundering.

Optimise returns to good causes from lotteries

Lotteries, including the National Lottery, make significant contributions to society and generate important funds for good causes – with £43 billion raised by the National Lottery since its launch in 1994. Those good causes include funding sports, arts, heritage and community projects.

The National Lottery has made a difference to the lives of millions and continues its positive impact on society. The Commission’s role is to ensure it is run with propriety whilst protecting the interests of every player, whilst making sure funds are maximised for good causes.

Last year we launched the competition for the next National Lottery licence which will begin in 2023. The preferred bidder will be announced in late 2021.

Our highlights in this area included:

We worked with the Operator to enable the National Lottery to continue to run smoothly during the Covid-19 pandemic and resultant lockdowns and monitored performance closely to ensure players continued to be protected during the rapid and significant increase in online play.

We continued to focus on players’ interests more broadly, undertaking a review of our approach to Interactive Instant Win Games to protect players from harm.

We approved joint marketing investment proposals between the Operator and good causes for Lotto, EuroMillions, Set for Life and the National Lottery Brand. Performance of existing marketing investment proposals indicate that previous such approvals have delivered for good causes and that these decisions stand to significantly benefit good causes during the 2021/22 financial year.

Returns to good causes finished the financial year at £1.83bn. It has been a strong year, particularly given the challenging circumstances this year.

In July 2020, following a public consultation, we strengthened several important aspects of our licence conditions and codes of practice which apply to society lotteries. New requirements and accompanying guidance ensure consumers have information available to help them make fully informed decisions about whether to participate in lotteries. At the same, time limits on the size of society lotteries were raised in line with Government legislation.

We outlined our conclusions following a consultation of society lottery prize limits and transparency measures.

Through a Selection Questionnaire, we officially launched the competition for the next National Lottery franchise in August 2020.

Following the launch of the Selection Questionnaire, we published the Invitation to Apply to successful applicants and are pleased with the number of entrants.

Improve the way we regulate

Our risk and evidence-based approach to regulation continues to ensure high standards are maintained by all operators we licence. This approach also plays a role in setting the direction for others in the industry to follow as we work to ensure gambling is safe, fair, free from crime and free from the risks of money laundering.

We continue to monitor and review our performance with the pace of innovation and technology constantly accelerating. Despite the impact of the Covid-19 pandemic, in the past year our administrative and licensing procedures continued to be streamlined and improved to ensure they were more digitally accessible for the industry, licensees, the public and players.

Our highlights in this area included:

As part of our response to the Covid-19 pandemic, we collected and published regular data about the trends we were seeing throughout the year and during the various lockdowns across the country. This enabled us to respond effectively and provide clear guidance to operators as the country transitioned to virtual and remote working.

We welcomed reports into gambling regulation by Members of Parliament and the House of Lords, following an earlier National Audit Office report. We continue to take forward the key recommendations.

The work on our new website has been a success and has ensured full compliance with new online accessibility legislation. The new-look site was launched in June 2021.

We continued to improve and consolidate our internal software and hardware estate, moving further towards an entirely cloud based infrastructure - improving resilience, information security and user experience.

Our project to automate the personal management licence application process was delayed due to Covid 19 but will be delivered in Summer 2021. We have continued to see the positive impacts from automation of the personal licence maintenance service with reductions in processing time of 50% or more and are looking to achieve similar outcomes in the next financial year.

We worked hard to respond to the challenges presented by Covid-19 on our colleagues and remote working processes to ensure there was a minimal impact on recruitment, training and wellbeing.

We undertook a culture diagnostic and have developed a programme that continues to develop us as an inclusive and diverse organisation and a great place to work.

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Overview of the British gambling sector
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Financial review
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