GambleAware conference 2021
09 December 2021Speech by Andrew Rhodes
Chief executive Andrew Rhodes' speech, delivered at the 2021 GambleAware conference.
First of all, it's really, really nice to be here and given the last, maybe, two years now, it's nice to be anywhere, but it is really nice to be invited today and a pleasure to come and talk to you.
It was also really good to hear from the Minister Chris Philp. We've met a couple of times recently and he's shown great commitment to the work that we're doing. Today’s theme is particularly important, and myself and the Commission have been seeing collaboration for a long time as a way to prevent gambling harm, so I'm going to talk a bit about that today and some of the emerging things that we're seeing that I think we all need to work together in order to address.
I also want to talk today about what the data is telling us and some of what the data isn't telling us at the moment, as well as some of the actions that we've got ahead of us in the very near future in terms of what we're doing.
Also, I want to thank GambleAware not only for hosting this event today, but for all the wider work around provision of treatment over the previous years which is incredibly important.
In terms of our role at the Gambling Commission, our job is to permit gambling. It's to license gambling as long as that is consistent with the licensing objectives. Those objectives say that gambling must be fair and transparent, crime free and protect the vulnerable from harm. In an ideal world we would have little to do beyond licensing operators, but that's not the case, and we're nowhere near that at this point in time. There is still far too much harm from gambling as a result of too little compliance amongst too many operators who are not complying with our rules.
In fact, the last few years have seen escalating enforcement by the Gambling Commission. We have recovered over £100 million in penalty packages since 2017/18 and revoked 10 operator licenses, and that doesn't include the ones who surrendered their licenses before our investigations are complete. This year so far is already on course to be our busiest year ever in terms of enforcement activity, and that's something that should concern us.
We're also seeing the proportion of regulatory settlements versus fines change, with fines increasing, and that is because we are seeing recidivist behavior. We are seeing the same companies committing the same offenses for the second and third time, and my concern is that those operators are starting to see fines as a compliance tax, and that's something that I'm not prepared to tolerate. It must also be incredibly frustrating for those in the industry who are working hard to comply and to raise standards. It must be unacceptable for them too.
But we also know that enforcement action isn't the only way to drive up standards. We do this through collaboration and working in innovative ways. The Minister mentioned some of these, including how we've been working with the industry on VIP schemes, games design and ad-tech, all of which have helped drive us towards more safer gambling.
Another is with many of the people in this room, and we came together to deliver the first National Strategy to Reduce Gambling Harms. The Gambling Commission fully supports collaboration in all of our approaches to reduce gambling harms. We don't just support it, we engage in it, and we encourage it. But what is the data telling us about gambling right now? Well, if we're going to work together and prevent gambling harms, we need to have a shared understanding of what it is we're trying to address.
The gambling industry is roughly the same size as the agricultural industry, which is a very different regulatory burden. Nearly half the population gamble in one way or another each month. The gambling industry yields £14.1billion after winnings are paid out, which means the gambling industry takes £450 a second off consumers within the UK. Just think about that number.
If we take out the National Lottery, then 5% of gamblers account for 90% of the gross gambling yield the money the gambling industry makes. 45% of people who gamble think they gamble less than most others. Now I find that really interesting, because the behavior is very similar to drivers who all think they drive better than everyone else, but it is interesting if such a large proportion of people think they gamble less than others, it means that the understanding of what gambling patterns are like is not actually great amongst consumers.
12% of the people in our research who do engage in some gambling don't think they engage in gambling at all. They're not even aware of what might constitute gambling, so understanding is still quite far adrift for the consumer base. It’s very, very broad and gambling in some way or another is common, and like other licensed activities, millions take part and suffer no ill effects.
But for hundreds of thousands of people they experience serious issues and are harmed by their experience in gambling. That harm is physical mental damages to finance, relationships. It's harm to the individual who's gambling, but also their friends, their family and their wider communities.
As I have said in public before, it's wrong to try and focus on 0.5% or 0.3%. We're talking about hundreds of thousands of people. We're talking about the effect on their families, their friends, their colleagues, their employers, the services they rely on. All of those are affected too. When you add all of those together, the number is much bigger.
And it's wrong to try and talk about small percentage. This is a bigger issue that we're dealing with, but also when we talk about those numbers, it isn't the full picture, and we know that the data is not as strong as it could be.
The data I've talked to you about is just a little piece of what we have, and it is the most up-to-date picture. But we want more. We need more data to give us a more accurate picture, so we're currently preparing to trial a new methodology for prevalence and participation data to give us a more accurate picture. We’ll provide an update on our work on harms next week and more news on the Prevalence and Participation trial in the spring.
But it also means operators need to make sure the data they provide to us is fit for purpose. I would strongly encourage operators – big and small – to use the remainder of this business year to ensure your data quality processes are robust and fit for purpose.
There is another problem with data as well. People can’t use data about gambling to make informed decisions if they don’t see what they are doing as gambling. Not just traditional products like lotteries or bingo, which are gambling. This is what we sometimes refer to as the ‘gamblification’ of entertainment – the integration of gambling into the experience itself.
But it's also where the product doesn't fit what many would regard as gambling or see as gambling at all. So many of these new products that we're seeing have many similarities to gambling and the risks of harm. We see significant losses, extended periods of play time, but the product doesn't always meet the legal definition of gambling. Or if it does, that’s becoming arguable.
And there are products out there now which look an awful lot like gambling but do not meet the current legislative framework in order to attract customers, which also means they don’t have the safeguards in place that we would require from the licensed gambling product. Some of the things that we have seen from the Football Index collapse, which is something that if you make the mistake of following me on social media, I get gifted quite a lot of feedback about.
It is an incredibly difficult topic. People have had horrendous experiences in losing money as the company collapsed. But what we found here is we've got a company encouraging consumers to believe they were investing and not gambling when there were no assets to support an investment. Many did and still do refer to themselves as traders, seeing themselves as engaged in a different kind of activity where they've made a mental leap from gambling into something else.
We see from forums and social media that many emptied their ISAs, their savings from house deposits, thinking they would do better financially by putting that into the Football Index product, which is a gambling product. There was a huge draw to use their knowledge to make money. It's all about that experience. I'm sure there are a lot of those people, and some of them I sat down with, would not stake that kind of money in a more traditional bet with a bookmaker.
And this is where we see the enormous risks now, around that gamblification of entertainment, and where there is a deliberate effort to obscure that line and to avoid some of the safeguards that we need to see.
Social media is an interesting world. Between the abuse, death threats and ‘what celebrities are doing now’, you can see much about the attitudes that people have. Just this week I saw someone who lost a significant amount of money through Football Index, recounting how they've now made that back through Sorare. We published some information stating that we were looking at Sorare as a product that is not regulated, querying whether it needs to be under our legislation.
I also observe people talking about making money through crypto, which again we're seeing exploding as an issue in the gambling arena. And that's something that really concerns us in terms of what the level of understanding is around the risks that people are facing. My point here is the gambling industry really is entirely based around taking money off people. £450 a second in return for an experience or for excitement. Some will win, but they will be very few in number. And let's remember that £450 per second number.
I'm not criticizing the industry for this. It is what it is. And it's not unlike many other leisure activities. But the scale can be very different. In involving products that look, feel and sound less like gambling, some will no longer appreciate the risks that they're facing.
Collaboration is going to be key to making faster and better progress. We’ll see this around what is in the White Paper as part of the Gambling Act review. For our part, we will continue to use our regulatory role to build up protections for people, working with stakeholders on how to do that.
Our customer interaction work is ongoing, and this is something that you will see feature in the gambling act review, but we will build and continue to build on the expectations that are already with operators in terms of how they should be interacting with customers and you heard the Minister talk about that. Also when someone reaches that trigger, we want to educate people to think about what that might mean and this is a prompt to them to think about what they are doing in the position they are in.
Turning to the single customer view, that gets quite a strong reaction and I'm very grateful for the Minister's support on this and grateful for the industry's commitment to delivering on this. Having sat down with groups of people who have experienced very extreme harms from gambling, it was clear to me that from many of those, actually an affordability check probably would not have detected or prevented some of their issues. But being able to see between operators damaging behaviour might well have done.
And that's an opportunity that I think we need to take and the industry needs to take and avail itself of. In terms of my view, this is all about creating the right degree of friction.
So the way I like to explain my analogy to this; it doesn't work entirely, but if you imagine it is a series of sieves. As things become more and more difficult, eventually you should be caught by something. But at the moment the holes are too big. People fall too far, too fast before there is intervention and that's why we need a graduated system to protect consumers so that they can enjoy their activities without friction until friction is needed.
And that's got to be based on risk, and the industry has to own the intervention in that. The regulator has definitely got a role to play, but the industry is 800 times the size of us. It has infinitely more resources and knowledge about its customers. It needs to use it. And I welcome the commitment to the single customer view, but it's stage one, and this is something that I see developing much more on in time.
We also do need to do more around illegal gambling and the black market. I do think this gets overstated and I worry that some use it as an excuse not to take action. I have sat down with one operator who was facing action from us around serious noncompliance, and they raised the black market with me. And I regard that, if you imagine - this analogy again only goes so far - if you imagine we were a taxi licensing authority, so bear with me… That's like someone where the licensed taxi with four bald tires and defective seatbelts, standing in front of me, a taxi inspector telling me about an illegal minicab around the corner. You're quite right about the illegal minicab, but if you want to have the ability to be licensed to advertise, to recruit to the open market, to attract customers who expect regulations and rules in place to protect them, you have to live up to those standards.
We are not going to be deflected away from that mission, in some sort of race to the bottom because someone else is worse. That's the whole point of having a regulated market. I absolutely believe if you introduce the wrong friction, you can drive people into the black market.
But we are nowhere near that scale of problem. We still see cases that make everyone blush. And that has to stop. And that is why our regulatory posture has been changing and it will continue to do so.
One of the things that I do want us all to work together on. It's how we solve those problems, but also how we build a well-informed consumer base that understands the risks they may face, understands the signs of harm in the way that they do with other things that we engage with, which could be dangerous for us.
And how do we get to sensible solutions that protect people but also don't have adverse consequences? We need to work together to achieve that. I see so much influence stemming from vested interests and it's very hard to counteract the echo chamber that is social media, but people seek out and find affirming views. We need to find a way to cut through that and as a regulator, that's really difficult because nobody here who is engaging in gambling today, is going to think “shall I Google what the chief executive of the Gambling Commission said recently?” I think they ought to. It would be lovely, but the reality is, they're not going to do that. They're going to listen to their peers. They're going to read stuff on social media and we need to find a way to have the right level of influence.
The Gambling Commission remains committed to collaboration. We will work with anyone who shares our views on how we improve things. I'm incredibly grateful for you inviting me today. It's been a pleasure to be here, and I met lots of people in 3D for the first time.
I'm also very grateful to you for your time today. I very much appreciate it. Thank you very much for having me.
Last updated: 9 December 2021
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