CMS Conference speech: The moment for momentum
30 March 2021Speech by Tim Miller
The moment for momentum' - CMS Conference speech by Executive Director Tim Miller on 30 March 2021.
The last twelve months have been incredibly challenging for society as a whole. The Covid-19 pandemic has changed us all and how we do things. The nature of today’s Conference – virtual for the first time – is testament to that.
But as we hopefully start to emerge from the pandemic- to rebuild businesses, to reconnect with friends and loved ones or (in my case) to just get a much needed hair cut- it’s important to take a step back and look at where we find ourselves and what we need to do next. Because now needs to be a moment to build momentum in making gambling fairer and safer.
Certainly the pandemic brought challenges to the Commission but it did not stop our work.
A big part of that work for the last 15 years was of course our former Chief Executive Neil McArthur, who left the Commission a couple of weeks ago. This audience today will particularly know him from his time as General Counsel before he took the role of Chief Executive in 2018.
His time as CEO saw a growing focus on safer gambling with the Commission strengthening protections against gambling harms, through the banning of gambling on credit cards; through enhanced age verification checks; and, most recently, through new requirements to make online products safer by design. And of course, that work does not stop with Neil’s departure.
So today I will talk about how we see the gambling industry now, I’ll also look ahead to what we plan to do in the coming year and what our updated Corporate Strategy outlines for us over the next few years. But first, I want to reflect on what has been delivered since we published our first Corporate Strategy, about three years ago.
Even before Covid-19, gambling and the way people gamble had been changing over recent years. Alongside that the nature and drivers of risks that consumers faced also changed. A few key points that are telling are:
- Excluding lotteries, online gambling was growing to a point where it accounts for more than 50% of total Gross Gambling Yield. This has obvious implications for where and how customers gamble, as does the increasing use of mobile phones to play.
- Over the last three years, alongside the move to mobile, we have seen a growth in the use of arguably 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 perhaps the distraction that can come from realigning businesses can disadvantage customers in terms of safer gambling and customer experience.
And remember these were all things that were changing before Covid-19 hit. We continue to monitor the impact of Covid-19 but whilst the closure of land based gambling for large parts of the last year may not have led to tectonic shifts in the gambling landscape it has undoubtedly accelerated the trends we were already seeing towards online gambling and what products people choose to gamble on.
Trends from our survey work and data on patterns of play and operator actions have helped us understand changes within the gambling market at different stages of the pandemic. This has helped us focus our guidance on those areas where extra vigilance has been needed by operators.
Alongside the Covid specific data, in February we 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 considered 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. I know when I said this a couple of weeks ago it caused some debate on social media. Should the Commission even be talking about data if it’s not statistically significant? On the other side were voices heralding this as evidence of ‘Mission Accomplished’.
Now I apologise if I sound slightly grumpy here but as we enter the review of the Gambling Act, that everyone says must be evidence led, we can not have a repeat of the debates of the past where evidence is dismissed simply because it doesn’t support your views or trumpeted as conclusive when it does. In forming our Advice we will want to look at the broadest range of evidence- statistics, lived experience, research. We will fill evidential gaps where we can and provide assessments of evidential value.
So, returning to the problem gambling rates- we will continue to monitor this and remain vigilant. And we will not measure progress simply on this one metric alone. Most importantly, I want to be clear that this data cannot 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.
And that momentum in making gambling fairer and safer is building. If we look back at some of the actions since our first Strategy was published:
- our Online Review led to us strengthening age and ID verification, improving requirements on customer interaction and banning gambling on credit cards
- we took action on confusing and opaque terms and conditions and strengthened the ADR system to make the relationship with customers fairer
- we have systematically ramped up our compliance and enforcement action: introducing Annual Assurance Statements, carried out targeted thematic reviews, such as on online casinos, issued over £100 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.
Last November, in light of the constantly evolving picture, we also took the decision to publish our first ever National Strategic Assessment. Alongside our Compliance and Enforcement Report, the NSA provides the foundations for prioritising future action over the coming months and years, which I will speak about shortly. It also helped us 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. More on that later.
We have also announced how we will make online gambling games and products safer by design. When the regulations come into effect at the end of October, they will see 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.
On top of this, 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.
Looking forward, there will be much attention on the progress of the review of the Gambling Act. Developing our advice, as the Government’s statutory advisor, will be one of our main areas of focus. But that focus will not be at the expense of continuing to act to make gambling fairer and safer. Our updated three-year Corporate Strategy, that will be published later this week, is written with this squarely in mind. A well-regulated gambling market, in which consumers have conﬁdence that they will be treated fairly and are well protected, is the only sustainable basis for allowing businesses to provide facilities for gambling.
We understand that the gambling businesses we licence will need to adapt and respond to the demands of their consumers. But in evolving products and services, consumer protection must be at the forefront of businesses’ minds and plans.
So, our regulatory approach cannot stand still. We need to continue to adapt to retain the international reputation we have earned as an effective regulator. Following on from our National Strategic Assessment, that laid out the key issues we face in making gambling fairer, safer and crime-free, our new Corporate Strategy will focus on five objectives:
- protecting children and vulnerable people from being harmed by gambling
- a fairer market and more informed consumers
- keeping crime out of gambling
- optimising returns to good causes from the National Lottery
- improving gambling regulation.
But strategy is all well and good but what does it mean for consumers and what does it mean for operators in the year ahead? Alongside our Corporate Strategy, we will also be publishing our Business Plan this week. It outlines the key milestones we plan to complete and address during 2021-22 – a year in which implementing and ensuring operator compliance with enhanced player protection will continue to drive our work.
As you would expect there is a keen focus on actions to protect people from harm. The one deliverable that I know most people here today are interested in, along with the 13,000 people that responded to our consultation and call for evidence, is where the Commission plans to go next on customer interaction. Given the volume of responses that we have received it is perhaps unsurprising that the process of giving detailed consideration to all the evidence is still ongoing with extensive further work and engagement likely to be needed.
However, whilst that process is ongoing, in our casework and compliance activity we continue to see example after example of operators who have allowed people to gamble amounts that are clearly unaffordable with very limited or no customer interaction until a very late stage. Just to be clear, we are not talking about grey areas here. We are talking about clearly unaffordable levels of gambling. Dealing with those types of cases and the harm that is already happening and, where necessary, clarifying existing rules will be our immediate priority in any next steps. So I would encourage all operators to take a close look now at how they are assessing their customers’ risk and how they are interacting with customers because we certainly will be.
It perhaps will come as no surprise that our business plan features work that addresses the risk of harm from gambling. Indeed the last couple of years have seen the debate around gambling regulation rightly dominated by such issues. We make no apologies for focussing the industry’s attention on this. But of course the licensing objectives don’t only seek to make gambling safer they also look to ensure it is fair and open, although I recognise that this is an area that doesn’t always gain the same level of attention. Our work over the last couple of years on terms and conditions, bonus offers and alternate dispute resolution have all been about making sure that consumers are treated fairly.
In the coming business year, one of the areas we will be looking at in relation to consumer fairness is the protection of customer funds. Many of you will recall that we have consulted previously on this and at that time there wasn’t a lot of support for moving away from the current tiered approach. Of course, the gambling industry in 2021 is very different to that which existed in 2013 so in this year’s business plan we will be looking again at this question, both from the perspective of our own rules but also to inform any advice we may give on the wider statutory framework, through the Gambling Act review.
Continuing to deliver the third licensing objective, keeping crime out of gambling, also features in our forthcoming business plan. This is of course another area that the review of the Gambling Act covers and again one where we will be developing our advice, especially in relation to the powers we have to disrupt or shut down unlicensed operators. In addition, we will continue to assess and tackle the risks that come from illegal gambling, including taking targeted enforcement action; as well as implementing the requirements of the 5th Money Laundering Directive.
So, as you can see, just as industry will continue moving, so will we. The next year will still hold surprises for us all as the world looks to move past the pandemic. Operators will continue for some time to deal with the unprecedented pressures on their businesses of the last year. We know that some operators have been forced to make tough decisions to keep businesses and jobs viable in recent months.
We will continue to look for ways we can collaborate with others, including operators, to make progress, as we have done successfully over the last couple of years. And we continue to focus on prevention as our default, seeking to ensure that things go well in the first place. But we will also intervene if things go wrong and where operators don’t meet the standards that we, their customers or the wider public expect.
We will not move at the pace of the slowest. We won’t use some positive data to take our foot off the accelerator. We won’t be distracted from the immediate challenges and risks by the longer term policy debate. We will keep building momentum.