ICE – International Regulators Lunch
Thank you. My name is Neil McArthur and I am the Chief Executive of the Gambling Commission.
I am pleased to have this opportunity to speak to you, as this is a challenging time for gambling regulation:
- I will talk more about the nature of the challenges in a moment;
- I then want to share my thoughts about how things are likely to play out;
- And I want to finish by talking about how I think collaboration between regulators can lead to better outcomes for consumers.
So, what are the challenges in 2020?
Well, some of the challenges are newer than others:
- Growth in gambling is predominantly happening online
- Technology is changing HOW consumers gamble
- The move to mobile well under way
- Technology also seems to be change WHAT consumers play
Other challenges are far from new:
- People have always gambled and probably always will
- The earliest references to gambling are found in Ancient Egypt and Ancient China
- Different jurisdictions approach the fact that people want to gamble in different ways
- some prohibit gambling completely
- other jurisdictions permit gambling, to a greater or lesser extent, provided it is regulated
- No one, as far as I am aware, thinks that gambling does not need regulating.
- Whatever approach is adopted, people gamble – even where it is banned
- Gambling is not a product like any other
- it is a product that is a source of fun for most, but one which can become addictive and cause serious harm to many people
- at the heart of all gambling, is a contest; there is a winner and a loser (the player against the house; against the bookie; against all the other players)
- Gambling is also a subject to which people bring their own beliefs, values and opinions to a much greater extent than is the case for other consumer products which was a point Tom Watson made in his keynote speech yesterday.
So, why do people gamble?
Why people gamble is something of an under-researched topic:
- We know WHAT products people play
- We know HOW people play those products and HOW MANY people play
But we don’t yet have a clear answer to the question: WHY do people gamble?
That is why we commissioned in-depth qualitative research including considering general lifestyles, hobbies, aspirations and routines.
- It shows people who choose to gamble do so for many different reasons and combinations of reasons. Some do it for the thrill, others to be social, yet more for the ‘joy of the game’.
- That same research also made clear anyone who chooses to gamble can go through ‘hot states’ where their level of risk increases. And every consumer has the potential to enter these states at different points and for different reasons.
- Every consumer is different. And operators need to think more in these terms if they are to play their part in addressing key areas of concern.
What do we know about gambling in Great Britain?
The last decade has been one of growth for gambling in Great Britain but at the same time it has seen participation and trust drop:
- Participation: participation in gambling is declining. In 2012 participation in gambling (in the past 4 weeks) stood at 57%. In 2018 it had dropped to 46%.
- Trust and confidence in gambling is also down. This is not a short term or recent issue. In 2008 49% of the population agreed gambling was fair and could be trusted. In 2018 that number had shrunk to 30%.
- And again, these figures cover a period when GGY was rapidly increasing: In 2008/09 GGY for the sector stood at £9bn billion. By 2018/19 this had risen to £14.4 billion.
How can it be that an industry has gone through such a level of growth whilst at the same time losing so many participants and so much trust?
I think the answer lies, largely, in another key set of statistics and the increased focus on gambling harms.
- The 2016 Health Survey, which is the most robust data we have, says there are around 340,000 problem gamblers in Great Britain. This is totally unacceptable.
- The same data suggests there are another 1.7 million people at risk of becoming problem gamblers. This is also totally unacceptable.
- I do not think consumer confidence will improve until we see a drastic reduction in the numbers of people suffering gambling related harm.
What are the Commission doing about this?
We are now approaching the end of year two of our corporate strategy, the commencement of which coincided with my appointment as Chief Executive. In our strategy we set out a vision for a gambling market that is fairer and safer for consumers. Since its launch we have been working hard to shift attitudes and mindsets – to disrupt old ways of thinking and behaving – in order to get better outcomes for consumers. In summary, our approach has had three components:
- The first strand is the implementation of a much tougher compliance and enforcement regime
- intended to significantly change behaviour by operators and those who run them
- a change in behaviour was much needed, frankly, standards were not good enough.
- That is why we have escalated the penalties over this time
- penalty packages have got bigger
- licences have been revoked
- operators have left Great Britain
- Alongside this we published enforcement reports to make clear why action had been taken and to help operators improve.
- Our increasing enforcement caseload demonstrates that more needs to be done and we will continue to deal firmly with people who do not meet our expectations
- The second strand was the development and implementation of the National Strategy to Reduce Gambling Harms
- Gambling related harm is now recognised as a public health issue; but this is a very recent development – welcome but recent.
- The need for education and prevention, alongside effective treatment and support is now accepted;
- The need for long-term sustainable funding is also accepted.
- And as part of a third strand, we have been looking for opportunities to challenge and disrupt old ways of thinking through collaborative work with:
- gambling operators
- other gambling regulators
- and most importantly, people with lived experience
Should a regulator collaborate with the people it regulates?
The idea of collaborating with operators has turned out to be quite controversial.
I understand why some people would be sceptical about this approach. Gambling operators have not done much to enhance their reputations and until very recently too little focus has been paid to addressing the pressing public health challenge that gambling related harm presents.
In Britain, gambling related harm is now recognised as a public health issue. That is an important change and I think it presents an opportunity to turn the change in tone from the top in operators into tangible actions that will benefit consumers.
I want to be clear, however, that this is not ‘self-regulation’.
- Operators will not get to mark their own work.
- We have set the agenda and focussed the operators on the following issues:
- Develop a new code of conduct on Product and Game design
- Tackle poor practice in incentives for high value customers via a new industry code
- Use Ad-tech to protect children, young people and the vulnerable from gambling advertising
- Exploring whether it’s possible to develop a single customer view that operators can collectively use to protect consumers at risk of harm by having a common view of that customer’s gambling and interactions taken to protect them
- We will judge whether the proposals go far enough and whether they are likely to achieve the outcome we want which is reduced risks of harm to consumers
We have set tight deadlines for when we expect to see progress made and if we do not see the right results in these areas then we have made it clear that we will take further action. All options are on the table.
And, the working groups are also, in that sense, ‘unusual’. They are intended to be. We are trying to disrupt old mindsets and ways of working to create positive change for consumers and approach the challenges we face in a different way.
Collaboration is strength
In Great Britain we have seen, over the last few years, the biggest gambling operators try to demonstrate their commitment to safer gambling in a variety of ways.
This is a welcome development but having the ‘will’ to do something is only half the battle. You also need to know the ‘way’.
As regulators we can give ‘direction’. We can show the ‘way’ to collaborate effectively to address complex challenges. That is why we – at the Gambling Commission – are trying to channel everyone’s energies into how we can make rapid progress which will help consumers by making gambling safer. We are trying to show operators the ‘way’, through the initiatives I described earlier.
Collaboration can and will deliver better outcomes. Everyone involved sees the problem from a slightly different angle, giving a different perspective on how to solve it. But collaboration and the interaction that goes with it drives a change in culture. At the Gambling Commission we think this is key to changing the outlook of gambling operators that are active in our jurisdiction. If we want operators to put consumer safety first, we can’t just use the big stick of enforcement. We need to get them thinking about their role differently think of their customers differently.
What about collaboration between regulators?
Gambling regulators have always collaborated, but the need to do so is greater than ever.
Consolidation of gambling operators and practices has led to a need for us all to increasingly work together to get the results we each want for our jurisdictions: safer gambling.
What I would like to say today is that we need to push on with this approach. We need to continue to be ambitious in where we look to collaborate and how. If we collectively show operators the ‘way’ to collaborate effectively and tackle the problems we face just think how powerful that would be.
When we come together, our output is already powerful. A persistent area of concern for many of us is the blurring of lines between gambling and video games. In particular how this can impact on children and the vulnerable. So, in 2018 the Commission alongside fifteen other European and American gambling regulators came together to issue a joint declaration warning video games developers against creating gambling like content. In that declaration we said:
- “We expect that this Declaration will initiate a constructive dialogue between gambling regulators and responsible game developers.”
- Since then there has been constructive dialogue with many games developers.
- Another three regulators have also signed up to the declaration since.
More needs to be done but 18 months on, progress has been made in this area. This is just one area where collaboration has begun to make a difference.
The Gambling Commission stands ready to play its part in advancing regulator collaboration. Last year:
- I met with many other regulators including in Malta, Gibraltar and colleagues from several jurisdictions in Portugal;
- The Commission has engaged with dozens of regulators from across the world;
- And we play a significant role in IAGR, GREF as well as regularly signing Memorandums of Understanding with other jurisdictions.
But there are opportunities to go further. For our part, our first step has been to start sharing what is coming out of the four initiatives I set operators last autumn. This week there will be discussions about them with many of you in this room. And we will share updates with fellow regulators when its announced at our Raising Standards Conference at the end of March. And we will work with you to look for areas we can develop and strengthen joint work plans and arrangements even further.
Shared priorities, shared work, shared outcomes
We all come from different parts of the world. The demographics and the scale of our jurisdictions varies wildly as do the pressures from our wider economies. However, we ultimately all share the same priorities.
- We all have to find the right balance between customer choice and enjoyment whilst protecting against the risks of gambling-related harm.
- We all have to make legal gambling fair and crime free.
- And we all need to work with a wide array of stakeholders, including gambling operators to achieve these goals.
We also increasingly regulate the same people and the operators. It’s interesting that a number of operators have left GB because they can’t meet our expectations. It makes you wonder about their suitability to be licensed anywhere. Those that fail consumers in Great Britain are probably failing your consumers too. Strengthening how we work together in this area could also make operators change their behaviour. It could deliver real progress. Another example of where we can potentially work together more is sharing expertise and training. Last year some colleagues asked me if we would help them establish their own Sports Betting Intelligence Unit by allowing their staff to come and shadow our own SBIU. I was only too happy to say yes. But we also have much to learn from other jurisdictions and other disciplines, to speed up our own progress. Collaboration is a two-way street and we want to learn lessons from elsewhere.
I said at the start that through working together we have a much better opportunity to create the safer gambling industry that we all want.
So, let’s continue to work together, to collaborate, to make gambling safer for all. I and the Gambling Commission stand ready to play our part. I am sure we are not alone in that.