Ian Angus speech at Bacta Annual Convention 2022
24 November 2022
Thank you for that introduction. I’m Ian Angus, Director of Policy at the Gambling Commission.
Let me start by thanking you for inviting the Commission to speak today at the Bacta Annual Convention. At a time when we’ve become increasingly used to greeting one another through a digital lens, it is a genuine pleasure to speak to you in person.
When my colleague – and Commission Deputy Chief Executive – Sarah Gardner, had the privilege of addressing the Bacta Convention in 2021, we were still very much adjusting from life in lockdown. In fact, I believe this was one of our first ‘real world’ engagements since the onset of the pandemic. I am grateful to John and the Bacta team for providing this forum, which remains a hugely important date in the industry calendar.
I appreciate that I may be a new face to many of you, so a little bit about me. I joined the Commission approximately 9 years ago. During that time, I have held several roles: all of them being within the policy and regulatory partnership space. I led on our joint investigation with the Competition & Markets Authority to ensure industry compliance with consumer law and our work over a number of years with the Advertising Standards Authority to ensure advertisements for gambling are socially responsible and do not mislead. I now have a broader role, overseeing our policy development work. And before joining the Commission, I spent periods of time working in parliament, the civil service, local government and the charity sector.
I came here today prepared for a robust exchange of views, and I’m pleased to see that John had no intention of letting me off the hook. I’m grateful for Bacta’s views and I want to state from the outset; we’re not perfect, and I’m not going to stand here and tell you otherwise. Also, there will always be areas of disagreement between any regulator and the industry that it regulates – and that is not necessarily a bad thing. I don’t intend to address all of John’s points this afternoon (we all need to get out of here at some point this evening) but I will touch on some of them.
As a starter for ten, I will make no apology for our unrelenting focus on the third licensing objective: protecting children and other vulnerable persons from being harmed or exploited by gambling. Vulnerability is not always a fixed state; in fact, it is often transient. Life events or changes to an individual customer’s circumstances may mean that a person becomes more or less vulnerable to experiencing gambling harms. And that is why knowing your customer is so important. The gambling industry could not carry on “as was” – there were too many compliance failings and too many people experiencing serious gambling-related harms. We will continue to push for a safer gambling market for the 22 million who gamble regularly in this country.
That said, our focus on safer gambling isn’t at the expense of the other two licensing objectives. There will be more to come on that in the weeks and months ahead but rest assured, we continue to invest significant time and resource into keeping gambling fair and open, and crime free.
So, let’s take a look at the gambling industry as it stands right now.
To state the obvious, we have moved on a long way since those uncharted, turbulent days of lockdown. I have no doubt that operators like yourselves, who exist in the land-based, bricks and mortar sector, will still be breathing a sigh of relief at being able to get back to doing what you do best. As we reflect on this period, we should not forget the resilience of the front-line staff who, despite having felt the effects of those tough times so acutely, continue to play such an important role in providing a fair, safe and enjoyable environment for your customers.
However, despite a return to some sense of normality, it would be remiss of me not to acknowledge the disruption that continues on the high street, and in the wider economy. The full extent of Covid-19’s legacy remains to be seen, but there is a feeling that many aspects of society have changed for the long-term. These changes, as each of you knows all too well, are having a direct impact on both gambling business, and people who gamble.
Our most recent participation and prevalence statistics – for the year to September 2022 – show that, following two or so years of pandemic-related disruption, overall gambling participation remains lower than pre-Covid levels.
We know from this data that people are slowly continuing to return to in-person activities. A significant increase in in-person fruit and slot machine participation, including in arcades, was seen in the year to September 2022, compared to the previous year. That said, in-person participation rates remain below pre-pandemic levels.
We have been collecting market data from all sectors to help monitor the impact and recovery from the pandemic. Clearly all sectors have been impacted differently. Data from the arcades sector indicates signs of recovery but we are alive to the fact that business isn’t yet back to where you’d like it to be.
It goes without saying that these are tough times to run a business. Since the last Convention, the cost of living has become a central point of concern for both consumers and operators, and has no doubt compounded existing challenges. Regardless of size or sector, we know that operators within the wider gambling industry, like yourselves, are facing a great deal of uncertainty.
We have noted that – as a result of increases in the cost of living – operators appear to be making changes to their staffing and operations.
Perhaps understandably, Bacta has spoken with the Commission about the effects of rising energy prices on those of you working in the sector, and suggested that we amend the ‘available for use’ guidance, in order to alleviate the impact of those rising prices.
We do understand the difficulties that economic challenges place on all businesses, including those of you I’m speaking to today. And we recognise the pressures that rising energy costs place on the non-remote sector. Indeed, we absolutely understand why you might ask us to amend our guidance in such a way that would allow machines to be switched off – cost efficiency is always going to be a focus when margins are tight.
That said, the 80/20 regulations are baked into legislation and that is something that is not within our gift to change. Our guidance – which has been consistent for many years – has to be based on our interpretation of the legislation. It simply wouldn’t be appropriate for us to amend our guidance due to prevailing economic circumstances. I really do want to be clear that adherence to the existing legislation is essential. If we see compliance failings in this space, we will act.
On the subject of legislation, you’ll be aware that we are awaiting the outcome of the Government’s Gambling Act Review. That piece of work is, of course, a matter for the Government, but the publication of that long awaited White Paper will clearly be important for everyone in this room.
As many of you will know from the recent discussions hosted by DCMS – which included Bacta and industry stakeholders – we are having regular engagement on the Review with officials from the Department, and will continue to feed in our views and advice as that work progresses.
That said, we certainly haven’t taken our foot off the accelerator. Our record of enforcement action shows that where we have felt it necessary to take steps to make gambling fairer and safer whilst the Review progresses, that is exactly what we have done.
The level of enforcement action since we last spoke is particularly noteworthy. In just the 11 months alone, we’ve seen £45m paid out by just 16 operators because of regulatory failures. This really should serve as a sobering reminder to operators that there can be significant financial costs to regulatory failings.
By comparison – for the 2016/17 financial year, we took action against 3 operators who paid out £1.7m for regulatory failures.
As recently as August, we handed down a record £17million penalty to a major operator for social responsibility and anti-money laundering failures. Notably, £3million of this is attributable to failings in its land-based premises. In one worrying incident, a customer was not escalated for a safer gambling review by either the shop or support office teams, despite staking £29,372 and losing £11,345 in just one single month. Another shop customer was allowed to stake more than £173,000 and, subsequently, lost £27,000 over the course of a year, without any form of escalation.
I should stress that none of this action was taken against the arcade sector, which you might say is a good sign. But let’s also not give the impression that all wrongdoing exists purely in the online space.
Failures such as these are completely unacceptable. Put simply; there are no circumstances under which it is acceptable for an operator to prioritise commercial considerations over compliance. We expect better. And consumers deserve better.
Our overall approach to compliance remains the same. We are a risk-based regulator, and we target the resources we have accordingly. This year, our compliance team have carried out a significant piece of thematic work in the arcade sector and responded to intelligence around poor supervision. On top of that, we will be carrying out a further thematic piece of work early in the new year.
I know that most of you, like me, will be deeply troubled that instances of harm, like the ones I outlined, are still occurring. But, I’m afraid, they are. And this action does serve as an important reminder that the Gambling Commission can, and will, take action against any operator, regardless of its size and scale.
Whilst we will not hesitate to take enforcement action where it is necessary, we would much rather ensure compliance with a set of high standards from the outset, such that we never have to reach that point. The Commission will always seek to achieve those aims by offering a constructive and collaborative relationship with industry. But the primary onus remains firmly on operators to ensure they are not just compliant, but also seeking to raise standards as every available opportunity.
From that perspective, I’d like to acknowledge the work that has been undertaken in the last year by Bacta, and its members, to improve consumer protection. We recognise that many of you sat in this room have played an active role in these developments and we’re grateful for your involvement.
To highlight some examples of progress:
- The trialling of cashless payments through apps, that contain features such as age verification, time and spend reminders, safe bet limits and take a break functionality
- Bacta’s limit-setting standard, which supports consumers through voluntary and mandatory alerts
- The Land-Based Game Design Code of Conduct, which features welcome commitments in areas such as losses disguised as wins, improved information provision and consumer points of friction
- Trialling digital age verification solutions on gaming machines to help prevent underage play and create age-appropriate leisure experiences.
These are positive developments, which I’m sure we can all agree go some way towards a safer industry. At the Commission, we look forward to seeing how this work develops and what the results will be.
Having noted these positive steps, you won’t be surprised that I’m now going to ask you to go further. It is true that these are challenging times, but we remain more focussed than ever before on our remit to make gambling fairer, safer and crime free, and that is why we are challenging your sector – as we do with sectors across the industry – to do more when it comes to consumer protection. We have advocated, for a long time, that introducing enhancements in safer gambling measures must be a pre-requisite to the removal of existing regulatory controls. And so, today, I’m looking to you, the people with the ability to affect change, to continue to invest in raising standards.
What sort of advances are we talking about? By way of example:
- Could Bacta’s limit-setting standard be improved through a) the provision of staff alerts (where the technology allows it on server-based terminals) and b) the introduction of real-time algorithms that identify play that could indicate harmful play and, thereafter, trigger an on-screen alert and force a break in play or ‘cooling off period’?
- In relation to the Land-Based Game Design Code of Conduct: Whilst recognising industries efforts to date, we felt the code could go further in areas such as removing auto-play provision, and displaying a customer’s net position and session time. Given the code is a living, evolving document we asked you to consider what more could be done in Phase 2 but understand the work is currently on hold in light of the Gambling Act review. We would challenge you to be proactive and bold. Raise the bar now, not down the line.
I’ve talked a lot today about our work to ensure the safety of consumers. It is, rightly, one of the Commission’s statutory duties. What perhaps doesn’t get quite so much airtime is our role in permitting gambling activities, so long as they are not just safe, but fair and crime free as well. These, too, are statutory responsibilities, and you can expect to hear us talk about them in much more detail going forwards.
I want to wrap up by acknowledging a fundamental truth; that as a regulator, we can’t please everyone, all of the time. As our CEO Andrew Rhodes often notes – if you want to be in the business of making people happy, then it’s probably best not to be in the business of regulating the gambling industry.
What we can do, however, is relentlessly push for operator compliance on behalf of all those who gamble.
So, to summarise, we do recognise the unprecedented challenges that the sector has faced over the last couple of years. And we accept that the road to recovery isn’t going to be a quick one.
But, in spite of these challenges, we simply cannot take our eyes off the ball. Irrespective of conditions, the work to make gambling in Great Britain fairer, safer and crime free must remain the primary focus for everyone in this room.
That work is, of course, the driving force behind everything the Commission does.
We are ready to work with all operators who share our ambition.
Last updated: 24 November 2022
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