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Andrew Rhodes speaks at Westminster Media Forum 2022

13 June 2022Speech by Andrew Rhodes

CEO of the Gambling Commission, Andrew Rhodes, spoke at the Westminster Media Forum Gambling Regulation Conference on Monday 13 June 2022.

Hello everyone and thank you to Ronnie for Chairing this morning’s session. I would also like to briefly thank Ronnie for his interest and work on highlighting the damaging impact of gambling harms in our society.

As the regulator it is not always in our gift to do what Ronnie and other members of the APPG for Gambling Related Harms want, and at times, we might not always agree on the best way forward. That said, we absolutely do agree on the need to reduce gambling related harms and we respect his commitment to this issue.

It’s great to be here today to kick off this event.

With the Gambling Act Review White Paper not far away, today is a useful moment in time to step back and look at the shape of gambling in Great Britain today. It’s a good opportunity to look at how the gambling industry is currently developing and to state where that is leading it. And on behalf of the Gambling Commission, without waiting for what the White Paper may bring, I can give you an overview on what we think needs to happen to make gambling in Great Britain as fair and safe as it can be, and what our next steps are to achieving that.

That’s exactly what I intend to talk you through and I’ll be happy to answer your questions at the end as well. But first, let’s look at gambling in Great Britain today and how it fits in to the global picture.

And let’s start with that word global. Gambling is increasingly a global industry. Many gambling operators more closely resemble global tech firms than they do traditional bookmakers of yesteryear. And the British market is the largest regulated online market in the world. What does all this mean?

First the growing and competitive global market means the pace of mergers and acquisitions has continued to accelerate.

The four biggest operator groups in Great Britain all have international footprints. They also, for the first time, will make up more than half of the British market by Gross Gambling Yield when you exclude the National Lottery.

And we expect this trend to continue in the near future.

This plays against a backdrop of the industry looking to move beyond the pandemic. We know that Covid-19 is still with us and it is still impacting on people and the economy but with restrictions having been lifted for some time now we are starting to see a picture of recovery in land-based gambling and online has, in some areas, fallen back somewhat – with Real Event Betting GGY at land-based venues climbing to account for over 40% of total Real Event Betting GGY in March 2022.

Against the slow but steady recovery seen across land-based gambling, online gambling as a result has seen a correction as well, with slots session length decreasing from averaging at 21 minutes in 2020/21 to 18 minutes in recent months.

Unfortunately, it’s too early to tell if this is due to a change in behaviour from existing players, new consumers bringing the average down, or whether customers spreading their money around different operators is the reason.

Another area of data – albeit contested - is our Participation and Prevalence data. I’ll talk more about why later, but our latest official statistics, conducted by phone survey, suggest that overall gambling participation was 43% for year to March 2022. This was 3% up on the year to March 2021 but still 4% down on the year to March 2020.

These figures all may help to explain the other big trend we see at the Commission at present. As entertainment more widely is becoming more seamless - across locations, channels and devices – so too gambling operators are looking to take advantage of this trend by moving towards more entertainment focused business models, reducing the friction between gambling and non-gambling products.

Coming the other way, non-gambling brands are looking to enter the gambling space.

Whilst gambling operators looking to make their profit from lower spending recreational consumers may well be a good thing, at the Gambling Commission we have been warning against the risks that come from the gamblification of products that currently aren’t covered by gambling legislation and regulations for some time.

Loot boxes in video games is one that gets plenty of attention but as those of you who have heard me speak before will know, we are also concerned about where NFTs, crypto and ‘synthetic shares’ are becoming increasingly widespread and the boundaries between products which can be defined and regulated as gambling are becoming increasingly blurred.

So overall, when we look at today’s gambling market, we see an incredibly energetic and innovative industry, one that is still grappling with the effects of the pandemic, which is still looking for areas to grow. But one that still has the potential to cause great harm. And in the unregulated spaces around it, we see too many hangers-on, trying to make a quick buck from the harm they cause.

Now I’ve touched on harm there but those of you listening closely will have noted I didn’t mention our statistics for gambling harms. The same statistics we published that give a participation rate of 43% also say that just 0.2% of the population are currently termed problem gamblers. That figure has come down over the last few years which is of course a good sign. But it is one we have only cautiously welcomed. Whilst our telephone survey is our official statistic we also look to the Health Survey data for England, Scotland and Wales for problem gambling data and the last set of combined survey results conducted in 2018 suggested 0.7% of the population were problem gamblers.

As a Commission we want the ‘gold standard’ data of the Health Survey with the frequency of the Telephone Survey. That led to us commissioning a Participation and Prevalence Methodology Pilot earlier this year. We released the initial outcome last month and the result that we are most interested in is that the pilot suggests the new methodology is sound and ready to be experimented with and then scaled up to become our new official statistic. That is what we intend to do and when it launches fully, it will be surveying around twenty thousand people a year – one of the largest participation and prevalence surveys of its kind.

But we also published the data from the trial and despite being a pilot the figure for problem gamblers in the pilot – of 1.3% - has been picked up. I get it, new data will always be pored over by commentators, especially where it’s different to previous data. At the Commission we’re focussed on making our data as rigorous as it can be so that we can make the best use of it.

We’ll be using the next year to analyse the new methodology further, correcting issues where we find them and scaling it up so its ready to become the new ‘gold standard’. Until then what I would say the data from the pilot shouldn’t be used as an estimate of problem gambling at this stage. But whether the problem gambling rate is 0.2%, 0.7% or 1.3%, those figures all represent hundreds of thousands of people suffering harm. We need better data so that we can make better progress. And that’s as true for the Commission as it is for operators.

And sadly, we still see far too many examples of operators – land-based and online, from small and local to the big 4 – making mistakes, failing our standards and failing their customers.

In our casework recently, we saw one example where a customer lost £60,000 in just two weeks and it was only then that the operator intervened. We found that no checks had been conducted prior to this point to assure the operator that the funds were legitimate, or event that the customer could afford it.

Another example we saw one customer lose £40,000, despite affordability checks showing they only had £38,000 available to them. And the intervention that this customer got despite showing obvious cause for concern? Only two emails, both of which went unanswered.

And a case where a customer lost £98,000 in five months without the necessary evidence being gathered to show this level of gambling was affordable to the customer.

Those examples are all recent. All since we published our last Compliance and Enforcement report last year. And we see more in many assessments. That’s not good enough. And it’s not sustainable either.

At the Gambling Commission we are open to further work with and alongside gambling companies to make quicker progress on fairer and safer gambling.

Our Industry Challenges a few years ago led to better standards on VIPs, use of Ad-tech online and Games Design.

And the ongoing work to develop a single customer view, between operators, ourselves and the ICO has the potential to reduce gambling harms without risking customer data.

But despite the successes that can come from this approach, we will not be complacent and will clearly set out the standards we expect. We will escalate the penalties for failings if we don’t see the industry start to consistently live up to our standards.

Our Chair, Marcus Boyle has outlined in the press how we intend to ramp up our enforcement work and the penalties that come with it.

And our approach to customer interaction is about to become far more prescriptive following the consultation response we published in the Spring. Those rules come into effect in September with guidance coming out this month.

Operators who aren’t compliant are not just letting their customers down or their own businesses. They are letting down the entire sector. Which should be frustrating for operators as much as it is for us. Because we do also see good practice and improvements being adopted by some operators. But that will be for nothing if those operators who are making the changes we expect and demand continue to be drowned out by poor practice elsewhere.

So it’s not just customers who would benefit from fairer and safer gambling, compliant operators will too. Which in turn benefits us all.

We can have a level playing field of repeated failures and hefty enforcement action throughout the industry, or we can have a level playing field of compliant licensees who protect their customers and keep crime out of gambling.

For our part we will continue to be vigilant for poor practice and failings. We are looking to consult on how to further strengthen our enforcement work. Already where we see big issues or are concerned about failings, I am seeing operators myself to make clear our concerns and where those concerns are not dealt with we are taking action.

But we know we need to improve our data as well. We’re investing in the data we collect as I’ve discussed already and you can read more about what we are doing in this area in our Business Plan. The better data we have the better analysis we will be able to do, leading to more effective interventions. Our Business Plan though, is of course interim until we see what the Gambling Act Review White Paper contains.

We are all waiting for the Gambling Act Review White Paper, but that won’t stop us at the Commission taking action. And I want to be clear: if you are a senior Executive or a Board member at one of our Licensees, we at the Commission see you as if your name was above the door of your company. You are responsible for its actions and, as we have previously, we will hold you as well as your company to account.

We are of course also taking action against illegal online gambling otherwise known as the ‘Black Market’. That is a concern and one that the Commission tackles day in, day out. And we are deploying more resources to combat illegal online gambling. For those consumers that end up there, it is likely to be a dangerous and unfair place to gamble with your money and it is something the Commission will always look to force down.

But it is important to state that this is not the overwhelming risk it is sometimes painted to be, nor can it be the excuse for not addressing some of the extremes we see in the regulated industry.

The Gambling Commission wants fairer and safer gambling for everyone in Great Britain. We will always strive for that but it is in the interests of everyone involved in the sector to strive with us.

I have been Chief Executive at the Gambling Commission for 3 days short of one year now. I sometimes find myself wondering what success could ever look like in such a contested and often controversial landscape. Every single person you meet or don’t meet, every event you attend or don’t attend, every photograph you may be present in, or any polite courtesy you extend is scoured for hidden meaning, or is a font for criticism.

The Gambling Commission is sometimes criticised for not being something it wasn’t set up to be, or simply isn’t funded to be. Some critics feel the Commission is in the pockets of one particular lobby or another, which is critical of the gambling industry, while others claim we are in the pockets of the industry. I regularly see conflicting claims that we are looking to stop people enjoying a legitimate leisure activity, whilst simultaneously caving into industry groups and allowing people to be harmed.

I don’t think either of these things are true – the reality is far more complicated, but so are the expectations upon us. The 1968 Act essentially regarded gambling as something to be tolerated but not encouraged. The 2005 Act, which is being reviewed now, put a statutory obligation on the Gambling Commission to permit gambling.

This is subject to some conditions and it is often in this space the debate becomes most fierce. We often face pressure to adopt standards and approaches more commonly seen in the Financial Services sector, which has a very different regulatory framework, when gambling is still legally a leisure activity not intended as a destination for your life savings, or your pension. At the same time, we see an industry that evolves exceptionally rapidly, where products can take off quickly and gather tremendous momentum.

My point here is not that anyone should feel sorry for us. Nobody would anyway. It remains to be seen over a little time, how things will evolve when it comes to gambling regulation, with an industry worth over £14bn, which takes £450 a second from its customers.

Tens of millions of people partake in one form of gambling or another on a fairly regular basis, and will do so without any negative consequences. I often get asked whether I gamble myself, as some kind of bell weather question.

Hundreds of thousands of people each year do suffer harm though. Harm that can be absolutely catastrophic, not only to them but to their friends, families and wider society.

There is a temptation for some in the gambling sector to just hold their breath and wait for the White Paper. At the Commission we also look forward to the White Paper and we understand it’s getting closer.

But no one in the gambling sector should believe that the Gambling Commission will accept waiting for the White Paper as an excuse not to tackle problems now. We don’t accept that, we don’t accept that anything should come before making sure you are trading as fair and as safe as possible. All the rest should be secondary.

I have to believe it is possible to have a successful and innovative gambling industry that provides something its consumers want but can do so in a responsible way, eradicating the inexcusable excesses we still see today, and expanding the good practice we also see.

For those operators who understand this, we will continue to work with them towards that shared goal. To anyone else offering gambling to consumers in Great Britain, whether with a licence or not, then I’m afraid that is the time when the House always loses.

Thank you.


Last updated: 13 June 2022

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