Institute of Licensing Conference – Sarah Gardner key note speech
17 November 2022
Thank you. The Gambling Commission really values our strong working relationship with the Institute of Licensing so its great to be back here with you all this year.
Strong collaboration with our partners in regulation is an absolute priority for the Commission and something we take incredibly seriously. So I’m pleased to be here talking to you, my colleagues who will be putting on presentations for you through the day are pleased to be here as well and I really hope that you all get a lot out of this event.
As you might expect, I’ll be talking to you today about how we see our work with local authorities as co-regulators going forwards and why it’s so important to our work. I’ll also be highlighting a few areas where this relationship is particularly important at present and what we can do to support local authorities in their work on the ground. But first, I thought it would be helpful to start with an overview of where gambling in Great Britain is today and the Gambling Commission’s priorities.
Those of you here today from Local Authorities don’t need me to tell you what impact the pandemic had on society as a whole, let alone High Streets up and down the country. Whilst we’re on the subject, the efforts of local authority staff during the pandemic – alongside other public servants – was nothing short of heroic and it’s the very least I can do today to say thank you. Needless to say, gambling was not immune from the impact of the pandemic either. The recovery in the gambling sector since has also shown the unbalanced nature of the impact:
- Compared to March ’21, year to March ’22, showed participation up by 3% reflecting land based opening up. Still lower than pre-pandemic though.
- In-person gambling participation rate increased to 26% (from 23% in year to March 2021) showing some signs of recovery since the pandemic.
- Online gambling participation remained statistically stable at 26%, compared to year to March 2021, but continues its long-term increase.
- And these figures have stabilised since March as well.
And this data makes clear a few points that go against the common narrative:
- Overall participation in gambling is stable and has not been growing.
- It is true that online has continued to grow, but the whole market is not.
- And whilst clearly online gambling grew faster during the pandemic when the land-based sector could not operate - or was heavily restricted – that was not a sign that gambling participation has exploded – it definitively has not.
And this data also makes clear that whilst in terms of Gross Gambling Yield or GGY, land-based gambling is no longer the majority, it is still an important part of the sector with millions going to betting shops, bingo premises and other bricks and mortar locations week in, week out.
At the Gambling Commission we currently licence 3372 licensed activities of which 1342 are land-based with not far off nine thousand premises up and down Great Britain. And sadly, when it comes to our Compliance and Enforcement work at the Commission, we still see unacceptable practice in land-based gambling too, such as:
- One shop customer who wasn’t escalated for a safer gambling review by either the shop or support office teams despite staking £29,372 and losing £11,345 in a single month.
- Or one customer who incurred losses of £275,000 over 22 months before the licensee requested source of funds evidence. When source of funds information was finally sought the operator relied on a tax account which it considered supported income of £217,391 – clearly this figure did not support the affordability of the customer’s losses.
The Gambling Act 2005 is of course under Government review. At the Commission we welcome this and are working closely with DCMS on the review. But I think these numbers and examples help illustrate why the ’05 Act set up a co-regulatory regime between the Gambling Commission at the GB-wide level and local authorities on the ground. And its our view at the Commission that this co-regulatory model is just as important today as it was in 2005.
Sometimes people suggest to me that local authorities are some how the junior partner in gambling regulation. I fear some of you may get this thrown at you too and it simply isn’t the case. Both the Gambling Commission and local authorities are given powers under the Gambling Act ’05 to licence operators, to levy fees and have significant enforcement powers. We have those powers at a national level, LAs at the local level. So its not about one side telling the other what to do. It’s about working together.
And it’s only through working together that we can make gambling safer, fairer and crime-free.
Our latest consumer survey shows that 0.3% of the population are reporting as problem gamblers. Whilst that might not sound a lot – and we are currently in the middle of experimenting with a new methodology for our Participation and Prevalence statistics – that figure still represents hundreds of thousands of people across the country, not to mention the impact on their families and their communities. For our part at the Commission, we are far from satisfied with that, we want to see that number continuing to decline and I’m sure that you agree with us.
As our regulatory partners we rely on local authorities for a number of things, that combined with our work, make gambling safer and fairer. We value the data you send to us each year, we make use of the intelligence you provide in our compliance and enforcement work and we appreciate the tireless efforts that are made to inspect premises in order to promote compliance with both our Licence Conditions and Codes of Practice and your local plans and decisions. In turn it’s our hope that the guidance, advice and resources we make available to local authorities helps you carry out your duties with confidence and our broad powers to take action against gambling firms that fail to meet our standards likewise strengthens your position on the High Street.
I also want to take a moment to recognise the support we are providing to each other in the work to reduce gambling harms. Under the banner of the National Strategy to Reduce Gambling Harms that came to an end earlier this year, projects found funding to improve treatment provision and harm reduction in their local communities, a notable one seeing the Local Authorities in Greater Manchester coming together to do just that. There has also been strong collaboration of local authorities in Yorkshire, Glasgow City Council has looked to drive progress following a successful conference last year and many local authorities in this room today are active members of a Gambling Harms Public Health group that the Commission convenes to share best practice and promote collaboration.
As partners and co-regulators of gambling in Great Britain, the Commission and Local Authorities have achieved a lot. Progress has been made. But challenges remain: some old, others new but all important if we’re to keep on making gambling safer and fairer.
Areas for focus
One area where we would appreciate your scrutiny on the ground is the application of the so called ‘80/20 rule’ that sets out the proportion of Category C or D gaming machines various gambling premises need to provide for customers to play on, in order to also provide B3 machines that offer larger prizes for larger stakes.
We are increasingly receiving intelligence, from consumers, stakeholders and local authorities that operators are either misinterpreting this rule or are wilfully looking for ways to get around it.
Whether it be for understandable reasons like the cost of energy driving operators to switch off some of their machines, or more concerning trends towards offering so called ‘in-fill’ machines that realistically can only be played by one person at a time but which are counted by the operator as two or more machines, the 80/20 rule is baked into the Gambling Act 2005 and our interpretation of it in guidance is well-established. So it’s absolutely vital that when conducting inspections of premises on the ground, licensing teams are taking this into account and reporting concerns to the operator and to the Commission.
Another area I’d like to highlight today is the shocking evidence of non-compliance we found a few years ago in Pubs through a test purchasing campaign and how we would appreciate the insight of local authorities in this space today.
Back in 2019, a joint piece of work between the Gambling Commission, local police and local authorities up and down England and Wales, uncovered that 84% of Pubs were failing to prevent under 18-year-olds from playing Category C gaming machines. That’s what you and I call fruit machines.
Local authorities have primary responsibility for regulating these machines and businesses are responsible for ensuring that they are compliant in checking age verification. The law here is clear: children are not permitted to play Category C gaming machines in pubs. Staff are expected to stop children playing on the machines and there should be clear signage indicating the age restriction.
I think we can all agree, in any regulated industry, an 84% fail rate is a cause for alarm. With social restrictions over for some time now across Great Britain, we think it’s time to start seeing if the pub sector has started to turn this around and where local authorities have findings from recent inspections, we at the Commission would be delighted to see what those inspections are throwing up.
Gambling has changed radically in recent years, looking more like a global tech industry than the traditional gambling sector many people think of when they think about gambling. We at the Commission are working hard to make sure that these changes still lead to safer and fairer gambling for people up and down Great Britain. But that change doesn’t alter the importance of holding the land-based, bricks and mortar gambling sector to our standards and as co-regulators, local authorities are as vital in that work as ever.
Let’s keep working together, supporting each other, sharing information and together we can continue to make gambling safer, fairer and crime-free.
Last updated: 18 November 2022
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