IAGR Conference 2021
15 September 2021Speech by Tim Miller
'Regulatory Disruption: The case for international collaboration', Executive Director Tim Miller's speech at the 2021 IAGR Conference.
Good morning everyone. I’m sorry that I’m not able to join you in person today. And my lack of attendance is not due to a lack of interest but due to current travel restrictions. I am genuinely disappointed not to be able to join this conference in person and be able to reconnect with you all face to face.
Two years ago was when we last all came together at the IAGR conference in Montego Bay. That was back during a time when offering to shake someone’s hand was seen as a friendly gesture rather than a public health risk. A time when we shared stories of how long we had spent on flights rather than how long we had spent in lockdown.
Had we known then the impact that a forthcoming global pandemic would bring perhaps we would all have networked that little bit harder, sought to further strengthen our connections and looked for immediate opportunities to collaborate with each other. Knowing that the closing of borders and restrictions on travel were on their way might have created a sense of urgency around our need to create stronger, more effective international regulatory partnerships to address our shared interests in ensuring that gambling is fair, safe and free of crime.
However, that need for urgency is here. If there is one lesson we can take from the virus it is that we are all part of a single, global ecosystem. When a virus can spread across the world so rapidly, ignoring international boundaries, it demonstrates just how interconnected all our lives are. It shows how an event in one part of the world can have profound impacts in another.
And the regulation of gambling is no different. I will talk a bit about how internationalisation in the gambling industry is already bringing disruptive effects, especially to our roles as regulators. Similarly, I will talk about the opportunities that those same international connections can bring for gambling regulators and how we need to seize them now. And finally, anyone that has heard me speak before will know that I can never end a talk without making a call to action, and today will be no different!
The regulation of gambling has always faced challenges. People have been gambling throughout human history and for as long as there has been an effort to regulate it, to make it fairer or safer, then those efforts have faced obstacles. In many ways these challenges remain the same as they always have. But internationalisation, alongside the continuing advance of technology, heightens old challenges and brings with it new risks as well.
When I reference the old challenges it may be worth reflecting for a minute on how we at the Gambling Commission have tended to look at the areas of risk in recent years. And that is by looking at the person, place, product and provider of gambling.
The person themselves of course is a factor that no regulator can control. But each person gambling is going to interact with products and be exposed to the risk of harm in a different way. Ensuring that our regulatory approaches and interventions reflect the wide range of consumer needs is an issue that as regulators we all need to be mindful of and address where possible, ensuring that consumers are supported and equipped to make informed choices about whether, when and how they gamble.
The environment where people gamble - online or offline - has always been a key regulatory issue, with different venues or places potentially having impacts on how people gamble, how much they spend or how much risk of harm they are exposed to.
The different products that people gamble on carry different risks. And the rapid development of novel offerings can often bring welcome innovation to the market but can also bring new elements of risk to the consumer.
And of course the provider, those offering gambling, gambling operators, pose their own challenges to gambling regulation. And unfortunately, through their actions - or lack of actions - can impact on their consumers exposure to risk or actual harm.
At the Gambling Commission we have used these lenses to help us drive progress in making gambling in Great Britain fairer and safer and I am sure many of you use similar approaches in your own jurisdictions. Internationalisation impacts on each of these in different ways that we as regulators must be alive to. But it also brings its own fundamental challenges. Let’s consider just a few examples:
In a world of increasingly large Multinational Operators, who possess significantly greater resources than any individual regulator, we face the very real risk of being financially outgunned by the very bodies that we regulate. For example, in Britain we are tasked with overseeing an industry that was worth £14.1 billion in GGY just before the pandemic struck. Yet we are seeking to regulate one of the most diverse and largest gambling markets in the world with resources of around only £18 million annually. Now whilst I’m not suggesting that a regulator needs to match the resources of the regulated we at least need to be properly equipped to keep pace with the speed at which the industry is innovating and evolving. The emergence of a number of international gambling giants, with the resources to bring time consuming and expensive legal challenges to regulators across multiple jurisdictions, shows just how much internationalisation could disrupt our work.
Operators with a global presence are also competing globally, with a presence in many different jurisdictions. Companies that were once thought of as distinctly British, Nevadan, Singaporean are now most definitely transnational. How do we as regulators make sure such companies don’t take their eye off the ball in maintaining compliance in their established jurisdictions whilst they seek to exploit the business opportunities that arise in new and emerging markets? And for those regulators in those emerging markets, how do you ensure that operators entering your jurisdictions do not bring with them a culture of non-compliance?
And of course, human culture is different the world over and so are the attitudes towards gambling and towards consumer protection. I’ve said before that understanding a jurisdiction's approach to gambling can tell you a lot about the culture of that place. In the very first speech I ever gave for the Gambling Commission, almost 5 years ago, I highlighted how gambling’s existence in a society was dependent upon its regulation and its operation matching the expectation of that society. In most places the concept of the social contract is what dictates how gambling is allowed to exist. The consequence of this is that the regulatory approaches of each of us will likely be slightly – or vastly – different to reflect the attitudes and status in society of gambling in our respective jurisdictions. However when those diverging approaches, those local or national cultural norms run up against an age of increasingly internationalised online gambling it becomes more challenging to ensure that operators are meeting the expectations and requirements of all jurisdictions. When a company is so used to following the social contract of one society, how quickly and effectively will they adapt to meet what is expected on them in a different society? And as regulators how well equipped are we to predict and recognise where our regulatory approaches might meet friction with those cultural differences?
All three of these examples show that internationalisation impacts on how we judge the risks we see and how we look to balance and mitigate them.
In 2021 a consumer gambling online may be gambling with a domestic operator; they may be gambling with a domestic brand that is owned by a larger international operator; they may be gambling with an operator based abroad but licensed in your jurisdiction; or they may be gambling with an overseas operator who is trading illegally in your jurisdiction. What this demonstrates is that the relationship that consumers have with gambling operators, the B to C relationship, is becoming increasingly complex and diverse. For us regulators there is perhaps no more important duty than ensuring that consumers are well protected. But each of those different dynamics between the consumer and the operator requires quite different approaches. So how do we address these challenges? How do we ensure that we operate in a sufficiently flexible way to protect consumers that are less and less constrained by national boundaries?
Speaking from the Commission’s own experience we are grappling with these same issues at home in a number of ways.
Through the escalation of our Compliance and Enforcement work, we are making clear to operators that our expectations of them remain unchanged and we will not tolerate the risk of them being distracted in their compliance with our regulatory standards by their emerging overseas ventures. The resource pressures that undoubtedly come from a program of commercial expansion overseas would not be accepted as a mitigating factor for failures domestically.
As a result of a recent agreement to an increase in our fees, we plan to make necessary additional investment to support our responses to technological developments, changes to the size and shape of the market and the risks associated with unlicensed overseas operators to protect consumers and the industry from ‘black market’ encroachment. At the same time we are being very clear with operators that the solution to tackling that black market is not to cease taking action to make regulated gambling safer. We won’t legitimise poor practice at home through fear of what might be happening elsewhere.
And through collaboration with industry, fellow regulators and other stakeholders, we are constantly looking for ways to make faster progress on raising operator standards, which can then be underpinned by subsequent regulation where they are shown to work. In the last twelve months this approach has led to important steps forward being made on the way VIP schemes are offered, on the use of Ad-tech to target marketing away from children and on making online products safer by design. These are all developments which could all have application in other jurisdictions and about which a range of fellow regulators have already engaged with us.
But we see a focus on collaboration amongst all of us, gambling regulators across the globe, as the essential next step in tackling the challenges that internationalisation of the gambling market poses for all of us. Because there is no turning back the clock on the internationalisation of gambling. Its impact, perhaps most visibly seen in cross-border mergers and acquisitions, will continue to grow. And so we must grow our own efforts at collaborating across those same borders.
Across markets, across jurisdictions, across cultures- collaboration will need to be a key tool in our work to make gambling fairer and safer for consumers worldwide. And we as regulators now need to grasp those opportunities to work together in a more joined up way.
Now of course, to varying degrees, gambling regulators have always collaborated. We’ve engaged closely with colleagues in the Republic of Ireland, in Canada, and in a number of US states to share our experiences and insights as new markets and new regulatory systems are being developed. And in turn we have looked closely at other jurisdictions to see what Britain can learn.
But now we need to significantly ramp up this collaborative approach. International institutions, most notably the World Health Organisation, are beginning to see gambling harms as a transnational problem and are looking for transnational solutions. As regulators we can not be behind the curve on this. We need to continue to be ambitious in our relationships with each other, in the ways we look to work together.
When we come together; act in a united way; speak with one voice, our impact collectively is greater than the sum of our individual parts. For example, it is widely acknowledged that complex cross border criminality, such as match-fixing, can only be tackled with effective international collaboration. The various parts of the puzzle are often held in multiple jurisdictions. So exploring effective information-sharing mechanisms with international partners is critical to the effective tackling of such concerns. Furthermore, recognising and taking advantage of key legal instruments such as the Council of Europe’s Macolin Convention, provides invaluable opportunities for gambling regulators and other relevant stakeholders - such as law enforcement or sports bodies - to collaborate with a shared objective of keeping crime out of gambling and sport. The Gambling Commission’s Sports Betting Intelligence Unit embraces this approach, and I know they have engaged with many of your teams in recent times to tackle these issues so effectively.
Another persistent area of concern for many of us is the blurring of lines between gambling and video games, especially how this can impact on children and young people. So, in 2018 the Commission alongside fifteen other European and North American gambling regulators issued a joint declaration warning video games developers against creating gambling-like content. Since then, there has been constructive dialogue with many games developers and the visible strength of our collaborative efforts was such that a further three regulators subsequently signed up to the declaration. More certainly needs to be done but progress has been made in this area. This is yet another example of where collaboration has begun to make a difference.
So in many respects my call for collaboration is not about us trying to do something new, something especially ground breaking. Its about ensuring that our collaborative efforts are focussed, targeted and purposeful.
Over the coming months and years, I think there are several areas where we could concentrate our efforts to enhance the way we collaborate.
Sharing best practice and learning from each other’s experiences is clearly an area we can all do more. For our part at the Commission, we have, in the last 18 months, shared the results of our Industry Challenges work. And throughout the pandemic we saw immensely useful engagement at every level with many of our colleagues across Europe to monitor what new risks were emerging as a result of lockdowns, what action others were taking to respond to changing consumer behaviours and to look at what was working and what wasn’t.
We have a real desire to build upon that type of engagement, to continue it as we take the first tentative steps out of the pandemic and bring even greater purpose to it. Of course, we all face resource pressures and so regularly jetting around the world is not practical or realistic. But the last 18 months have shown us that distance need not be a barrier to engagement and co-operation. There are partners out there that can assist us in this task. Picking just one to illustrate the point - GREO, the gambling research exchange, does excellent work in lots of different areas but the way they summarise and distribute new gambling research from around the world is a great example of one way of better sharing best practice.
The second area where I think we could further exploit the opportunities of international collaboration is in the sharing of intelligence. The more we can share intelligence and coordinate the monitoring and reporting of emerging risks across jurisdictions, the more agile and efficient each of us will be in tackling them in our own regulatory back yard.
Again, many of us will increasingly be regulating the same people and the same operators. Those that fail consumers in Great Britain are probably failing your consumers too. Strengthening how we work together in this area could also help raise standards and levels of compliance in our individual jurisdictions. A strong, clear, unequivocal declaration and demonstration that across jurisdictions we all have equally high expectations of operators could globalise good practice at a time that a globalised market is increasingly the reality we all work in.
If operators clearly understood that their actions in one jurisdiction would be shared and understood across the international regulatory community it would help to concentrate minds. It would help to reduce the risk of industry seeking to play one regulator off against another. It would also help to avoid the resource burden that can come from the at times piecemeal and unstructured ways that we sometimes seek regulatory information from each other.
Yes there will be hurdles to overcome in sharing intelligence across borders, such as national rules on data transfer and the limitations of our individual statutory frameworks, but these should not be insurmountable. Many of us already share some regulatory information with international partners but perhaps now is the time to place greater structure around that.
Finally, any discussion about greater collaboration and greater sharing of intelligence naturally raises the question of the desirability of seeking greater harmonisation of regulatory approaches across jurisdictions. Now, I am not advocating a great rush to try and create a single set of regulations that would apply across all jurisdictions. That level of regulatory harmonisation would simply be unrealistic and most probably undesirable. The demographics and the scale of our jurisdictions vary greatly as do the pressures from our wider economies and political systems. But equally, actively seeking a divergence of approach in a global gambling market would also not be realistic nor desirable.
Ultimately we all fundamentally have the same roles to perform and broadly share the same priorities. So let’s be more ambitious than we have been. Let’s identify those areas where we have sufficient commonality of approach where highlighting and maybe strengthening those similarities could help us raise standards across all our jurisdictions. Where shared policy positions, perhaps even some shared codes would be desirable and possible. Because where there can be greater harmonisation in the ways we seek to protect players or addresses risk, everyone benefits. The consumer benefits from knowing that they will be treated fairly where ever they are gambling. The industry benefits from the economies of scale that come from being able to comply with some similar standards wherever they are located. And we as regulators benefit from knowing that, at least in some areas, our drive to raise standards at home won’t be undermined by distractions from abroad.
At the beginning, I warned you. There’s now a call to action coming! So what could be the immediate next steps in strengthening our collaboration? Well happily I think IAGR could be the perfect vehicle to help make a difference to this work in the months and years ahead.
IAGR is a great channel for us all to meet together to discuss and debate the issues we face. But, to be really candid about it, I don’t think we as member organisations have collectively and consistently done enough to support our membership body to support us in this increasingly internationalised world.
Why create something new when conferences like this show how successful IAGR can be in bringing together regulators from across the world. I for one can see IAGR becoming the vehicle we all turn to, to help facilitate cross-jurisdictional work and regulatory partnerships. But if they are to do that, they will need a commitment from all of us because a membership body is only as strong as its membership. Clearly if this is something that we see IAGR having a role in then there will need to be discussions about how it can best do that. But as a starter for ten, setting up an internationalisation working group would be an excellent first step in creating a route map for greater collaboration. This would certainly be something that the Gambling Commission would happily be a key part of.
That is not to say we can’t all play our part individually as well. As I have already said, we at the Gambling Commission are eager to continue our engagement work with our fellow regulators over the coming months.
So yes, we will be continuing to engage with our European neighbours, but we also want to work more closely with regulators in North America and elsewhere. The opening up of online markets in Canada, most recently in Ontario, alongside the ongoing evolution of regulated gambling in the United States following the Supreme Court’s decision on PASPA is already having knock on impacts to other markets, such as Great Britain.
We want to build on our existing relationships in North America to accelerate our collaboration efforts in this part of the world. I’d like us to look at how we can build together a more comprehensive view of the transatlantic footprint of gambling operators through better, more resource effective sharing of data and intelligence. I’d like us to share more information about new approaches to player protection - what is working and what isn’t. I’d like us to work together to encourage researchers and academic institutions to do more transatlantic research which compares and contrasts across jurisdictions. Had we been able to make this conference in person, we would have been keen to convene a roundtable discussion with our regulatory cousins across North America to start exploring how we can cement stronger working relationships across the Atlantic. I hope that we will nevertheless have opportunities for that deeper engagement over the coming months, albeit most likely in a virtual environment.
I do feel very fortunate to work for an organisation like the Gambling Commission that is part of a much wider international regulatory community. Knowing that there are colleagues and partners around the world who are facing the same challenges as us fills me with optimism that we have the foundations for addressing the growing international dimension of those challenges.
But I also worry that we might fail to grasp the opportunities that this conference and our collective engagement through IAGR can bring. I’ve attended too many conferences where there has been fantastic levels of debate and energy but for that to fizzle out once we all go back to the day to day realities of our domestic regulatory responsibilities. Gambling regulation can be intense and it is difficult not to stay head down, focussed upon the immediate regulatory issues that have just landed on your desk. But over the longer term, a failure to lift our gaze and see the wider international context that we are working in may stand in the way of our ability to really make progress in delivering a fair, safe and well-regulated gambling market.
So take everything you can from this conference this week. But don’t let the value of us coming together in this way end when you log off of Zoom or fly out of Logan Airport. Let’s use this week to build some momentum in our international co-operation.
Through working together, collaborating with each other, we have a much better opportunity to create the fairer and safer gambling industry that we all want in our own nations. We all have a part to play in that, including IAGR.
Internationalisation isn’t going away. It heightens and evolves old risks for regulators and it also brings about new challenges as well. But as is often the case, the answer to the risks and harms that come with internationalisation, do not lie in trying to claw our way back to a simpler time. They lie in being even more open to the change and from embracing the opportunities that come with such an attitude.
So, let’s continue to work together, to collaborate and to make gambling fairer and safer for all. We at the Gambling Commission are ready to take the next step and I am sure we are not alone in that.