The National Strategic Assessment and way forward for gambling regulation
Thank you, Baroness Armstrong.
The last year has been one of immense challenge for everyone and that is true for the world of gambling as well. So today has offered a useful opportunity for us all to step back and look at the broader picture, about the issues and, yes, risks that gambling presents to consumers and the public in Great Britain. And its those issues and risks, as the Gambling Commission sees them, that I would like to discuss.
And it’s through our recently published first National Strategic Assessment that the Gambling Commission’s views of those issues and risks are explored.
The Assessment sets out:
- the best available evidence we have - including the impact of Covid-19 on the risks to consumers, and
- the conclusions we have drawn based upon that evidence.
The Assessment is framed around four elements:
- the Person gambling;
- the Place gambling occurs;
- the Products available to customers;
- and the Provider of facilities for gambling.
The Assessment provides the foundations for prioritising future action over the coming months and years, which I will speak about shortly.
The Commission’s first Corporate Strategy and the last three years
But before we look to the future, I’d like to spend a few moments looking back to where we were three years ago when the Commission launched its first Corporate Strategy. Amongst the debate around gambling, it often gets forgotten that a lot of progress has been made over the last three years. For example:
- Gambling related harm is now recognised as a public health issue, which needs a public health approach. That wasn’t universally accepted three years ago.
- Improvements have been made on markers of harm, the management of ‘VIP’ customers, games design, gambling on credit cards and customer interaction.
- And the voice of those with lived experience of gambling harms are now increasingly heard. Just this month the Commission launched our new Lived Experience Advisory Panel, replacing our interim Experts by Experience group, which was formed last year. The new Panel will be working with us to advise on a wide range of policy development initiatives.
Those are just a few examples; there are many more. That said, risks are dynamic and there have been many significant events that shift the risk profile. For example:
- Online gambling - even before the Covid-19 restrictions affected premises-based gambling – was growing to a point where more than 50% of Gross Gambling Yield (stakes less prizes) now comes from online gambling. This has obvious implications for where and how customers gamble, as does the increasing use of mobile phones to play.
- The products customers play also affect the risk profile. Over the last three years, alongside the move to mobile, we have seen a move towards more intense products, such as slots and in-play betting.
- Mergers and Acquisitions have also been a prominent feature of the gambling industry over the last three years. This has implications for the providers of gambling and the teams who lead them. For example, our Compliance work has seen that time taken to integrate different systems and approaches can disadvantage customers in terms of safer gambling and customer experience.
So, how has the Commission responded to the changing risks?
- Our Online Review was published in 2018 and led to us, strengthening age and ID verification, strengthening customer interaction and banning gambling on credit cards.
- We also made the use of GAMSTOP, the multi-operator self-exclusion scheme, compulsory for online operators.
- We were amongst the first voices to make the arguments that Gambling Harms should be recognised as a Public Health issue and adopted a public health approach when we published the first ever National Strategy to Reduce Gambling Harms in 2019.
- And we have systematically ramped up our compliance and enforcement action: introducing Annual Assurance Statement’s, carried out targeted thematic reviews, such as on online casinos, issued over £90 million of penalty packages since 2017/18 and revoked 10 operator licences since then as well.
This record of action should leave no one in doubt that the Gambling Commission is totally focused on making gambling safer, fairer and crime free.
But I want to return now to those four lenses through which we see risk. Because they are fundamental to how we see gambling in Great Britain and how we prioritise making it safer. As a result, they are the cornerstone of how we approached our first NSA.
Where are we now: The National Strategic Assessment and current progress
The NSA is built on four pillars linked to:
- The person gambling
- The Place people gamble
- The Products
- And of course, the Provider.
As a result of looking at risk in this way, in the NSA we were able to map out immediate actions:
- We have run a consultation and accompanying call for evidence on how best to improve the effectiveness of customer interaction. This consultation explored the themes of affordability, vulnerability and identifying and acting on indicators of harm.
- It closed earlier this month and has attracted 13,000 responses. We are assessing those responses and the evidence provided to inform next steps.
- We have also announced how we will make online gambling games and products safer by design, which I will discuss further in a moment.
- And we will also continue to press the industry to use technology to create a single view of the customer, working in partnership with our fellow regulator the Information Commissioner. We recognise the challenge of keeping a customer safe where operators currently only have a partial view of a customer’s behaviour. A Single Customer View would give operators a full picture of a customer’s gambling and risk of harm whilst keeping the customer’s data secure. A Single Customer View could dramatically help reduce harm and that is why we will not accept progress at the pace of the slowest on this work.
But the NSA also takes account of the unprecedented impact of the COVID-19 pandemic.
- It detailed what we learned during the initial lockdown and the action we took to protect consumers. Whilst overall gambling dropped during the first lockdown, in May we issued new guidance for online operators to help reduce the risk of harm instructing operators to:
- Urgently review their thresholds and triggers,
- Keep under review duration of play for customers as an indicator of harm,
- Identify changes which warrant intervention,
- Conduct effective affordability checks,
- Prevent reverse withdrawals and,
- Restrict bonus offers to those displaying indicators of harm.
- Since the NSA we have continued to monitor the impact of Covid-19 and this week we published the most recent data, with fieldwork taking place in December.
- Our data consistently shows that extra operator vigilance is needed during the current national lockdown conditions and we have written to operators earlier this year making clear our expectations and that the guidance we issued last May remains in force.
- Alongside the Covid data we have also published the latest official statistics on participation and prevalence. It shows that the problem gambling rate in 2020 was 0.3%. This compares with 0.6% in 2019, 0.5% in 2018, 0.6% in 2017 and 0.7% in 2016.
- Although the drop from 0.6% to 0.3% in the last year is not statistically significant at the 95% confidence level that we apply, when you look back over the last five years it does appear that there is an emerging trend showing a decline in overall rates of problem gambling. We will continue to monitor this and remain vigilant. And I want to be clear that this data can not be seen as a reason to take our foot off the accelerator when it comes to protecting consumers. Instead it should be seen as an opportunity to continue building momentum in our efforts to make gambling safer.
Now I said I would return to the increased political interest and scrutiny that gambling and our work has received in recent years. As a statutory regulator it is right that we are scrutinised and held to account for how we deliver the licensing objectives and we know that different groups may have very different views about how our role should be performed.
In particular, we welcome greater interest from Parliament in making gambling safer. Whether that interest is long held, came from concerns over FOBTs or is yet more recent, we welcome the diversity of interest and perspective that this greater scrutiny brings.
- It has helped us and others who were calling for gambling harm to be treated as a Public Health issue years ago to make progress.
- We welcomed the NAO’s work with us. And their subsequent report and that of the Public Accounts Committee has helped us bring focus onto some of the key issues for gambling regulation in Great Britain.
- And we welcome the Gambling Act Review as well, and as statutory advisors, look forward to working with the government on it.
But as we led the way with the first ever National Strategy to Reduce Gambling Harm and with our focus on the risks of online gambling, so we will continue to take action whilst the Gambling Act Review continues. We will not accept the Review of the Act as a reason for any operators to slow down either. No operator should get distracted from the task in hand.
It is with this approach in mind that I want to talk a bit more about our work to make online games safer by design.
Next steps and making gambling safer
We published our response to our consultation on Safer Game design earlier this month. Our intention is to make online games, in particular online slots safer by design. Preventing harm through the Product. The headline measures include outright bans on:
- Features that speed up play or give the illusion of control over the outcome
- Slot spin speeds faster than 2.5 seconds
- Auto-play - which can lead to players losing track of their play, and;
- Sounds or imagery which give the illusion of a win when the return is in fact equal to, or below, a stake.
Of course, we will follow the implementation of these rules with thorough evaluationbut in short, these new rules are unprecedented in terms of player safety around the world.
Of course, regulating a £14 billion industry requires resourcing and so we welcome the DCMS consultation on our funding that opened last month. It will explore much needed changes to our fee income to enable us to continue to regulate effectively. We would encourage everyone interested by the proposals to have their say.
In the Spring we will be publishing our Business plan and new Corporate Strategy. And whilst I can’t yet share the details of what they will include, you can rest assured that the Commission will be maintaining its clear focus on making gambling safer, fairer and crime free.
- We will continue to take action where needed, just as we have done throughout the pandemic and over the last few years.
- We will continue to seek opportunities to collaborate: We are determined to make progress with the ICO and operators on developing a Single Customer View. We will also continue to work with others on improving affordability measures, even whilst we consider the evidence submitted to our call for evidence.
- And we will continue to be unrelenting and uncompromising on ensuring compliance with our standards and taking enforcement action where those standards are not met.
We are working hard to make Great Britain the safest place to gamble in the world and we need you all to work with us to achieve that outcome.
- We want to achieve this through collaboration. We recognise the unprecedented pressures on businesses and we know that some operators have been forced to make tough decisions to keep businesses and jobs viable in recent months,
- But we won’t hold back. Operators must raise their standards to meet ours.
- We want to do more to help things go right in the first place. But we will intervene when things go wrong.
The last twelve months have undoubtedly been tough for all of us. But even through the turbulence of the pandemic, progress is being made in making gambling safer. The evidence is suggesting that we are on the right track. So let’s keep on going together.