Local Government Association - Sarah Gardner speech
08 February 2023Speech by Sarah Gardner
This speech was delivered by deputy chief executive Sarah Gardner to the Local Government Association in London on 8 February 2023.
Please note - this is the speech as drafted and may slightly differ from the delivered version.
Thank you everyone.
It’s great to be here with you all at the Local Government Association conference.
Strong collaboration with our partners in regulation is a priority for the Commission and something we take incredibly seriously, so I’m pleased to be here talking to so many of you today.
I want to talk to you today about how the Commission sees our work with local authorities as co-regulators going forwards and why it’s so important to our work.
I’ll also highlight a few areas where this relationship is particularly important at present and what we can do to support local authorities in their work. Finally, I want to share my thoughts on how we can improve some of the issues we are seeing.
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.
Gambling today
You will all be acutely aware of the impact the COVID pandemic had on society and local High Streets within our communities. The efforts of local authority staff during the pandemic, including many of you here were incredible, 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. I just want to run through some statistics that help to show the impact the pandemic had on the industry, and how things have changed since restrictions have lifted.
In year to September 2022, overall participation in any gambling activity (in the last four weeks) remained statistically stable at 44 percent (compared to year to September 2021)
In year to September 2022, the in-person gambling participation rate significantly increased to 27 percent, although this figure still remains below the pre-pandemic level (compared to year to September 2021)
The online gambling participation rate has significantly increased to 27 percent, continuing its long-term trend (compared to year to September 2021)
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 online gambling clearly 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.
This data makes clear that whilst in terms of Gross Gambling Yield (GGY) land-based gambling is no longer the majority, it is still an important part of the sector with millions going to the 8,408 betting shops, bingo premises and other bricks and mortar locations week in, week out. According to our statistics, the Land Based Sector’s GGY was still £3.5 billion between April 2021 and March 2022.
When it comes to our Compliance and Enforcement work, here at the Commission, we are still seeing too many unacceptable practices and egregious cases. In land-based gambling two such examples illustrate the concern:
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.
Another customer 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 and we look forward to the publication of the White Paper. We of course welcome this and have been working closely with DCMS on the review. But I think these 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 it’s our view at the Commission that the co-regulatory model is just as important today as it was 18 years ago when the Act was passed.
Co-regulators, partners
The Gambling Act 2005 sets out that both the Gambling Commission and Local Authorities are co-regulators and are given powers under the Act to licence operators, to levy fees and have significant enforcement powers. We have those powers at a national level, local authorities at the local level. There are no senior or junior partners. It’s incredibly important that we continue to work together, so we can make gambling safer, fairer and crime-free.
The 2018 Health Survey for England shows that 0.5 percent 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 still means that hundreds of thousands of people across the country are suffering significant harms from their gambling, impacting their finances, their health, jobs, family and community. That is still far too many, and we at the Commission will continue to work to protect those most at risk of harm.
As our regulatory partners we rely on local authorities to work with us to 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. 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.
We really do appreciate the data and research you share with the Commission. We cannot analyse and publish data that isn’t shared with us, so it is really important that the data flow from you to us continues. For the 2021/22 year, 338 of Britain’s 363 Local Authorities supplied data for our Licensing Authority Statistics report, so I would urge those of you who did and didn’t to share your data when you can. Not only is this invaluable data for us so we can monitor and map emerging trends, but for the same reasons it can be important for you as local authorities to map emerging hot spots in your areas.
The Commission has a dedicated section on our website for licensing authorities with resources including guidance and policies, tool kits and codes of practice. I hope you find them useful and that they help you to carry out your duties. And if you have any feedback or suggestions on the guidance on our website do let us know.
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 last year, projects found funding to improve treatment provision and harm reduction in their local communities. There are lots of good examples of local initiatives and just to name just one from the many on our website, Sheffield City Council’s Joint Strategic Needs Assessment containing a chapter on gambling harms.
I would also like to mention The Greater Manchester Combined Authority’s ongoing campaign to raise awareness of some of the harms linked to gambling. They are clear it is not an anti-gambling campaign, but an anti-gambling harms one. And according to their strategic needs assessment, there are over 18,000 adults experiencing gambling harms across Greater Manchester, so it is an important message to get across.
As partners and co-regulators of gambling in Great Britain, the Commission and Local Authorities have achieved a lot. We have moved forward in some areas, but some challenges remain and no doubt new challenges will appear. But it’s important to continue to tackle them head on.
Areas for focus
One very important issue where we would really appreciate your scrutiny on the ground is the application of the so called ‘80/20 rule’. This 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, local authorities and our own inspections that operators are either misinterpreting this rule or are wilfully looking for ways to get around this rule.
Now, with the spike in energy costs, it is understandable that some operators will want to switch off some of their machines. Another more concerning trend is 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 enshrined in the Gambling Act 2005 and our interpretation of it in guidance is well-established. Both of the examples I’ve mentioned are not allowed. So it’s absolutely vital that when conducting inspections of premises on the ground, licencing 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 pre-lockdown in Pubs through a test purchasing campaign and 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, more commonly known as fruit machines.
Local authorities have primary responsibility for regulating machines in alcohol-licensed premises, 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 percent fail rate is a cause for alarm. I really want to stress the importance of test purchasing and would ask that if gambling test purchasing isn’t something you’re already prioritising, that you build this into your work for the coming year and share those results with us.
With restrictions lifted for 18 months or so, we hope you have and will have the chance to go out and see if the sector has begun to change this. As mentioned earlier, we would really appreciate you sending any of your findings from recently inspections to us and again, when it comes to the pubs sector, I’m sure you agree, we cannot accept such a huge failure rate and more must be done to drive this number down.
On a related note, we often hear that local authorities do not receive complaints about gambling. Of those who complain to the Commission, many don't even realise that they can complain to their local authority about land-based concerns. But that does not mean that issues are not there.
Indeed, we know they are there, but sometimes we need to go out and find them. For example, someone who should not be playing on gaming machines, for whatever reason, is probably not going to complain when they are treated unfairly or suffer harm. But what that means is that the role of inspections, on the ground by local authorities, is as important - if not more important - than ever.
And I know that good quality inspections are a costly enterprise both in terms of time and money. We understand the serious financial pressures you are all facing.
Happily though the Gambling Act does give you the power to raise income from fees for this activity, including compliance, inspection, and enforcement.
And if anything we at the Commission somewhat envy your powers in this respect: as the local authority you have the power to review and increase your gambling premises licence fees, subject to statutory maximum levels. So if you need more resource to do this work properly, you won’t hear any criticism from the Commission if you review the fees you are currently charging.
I was recently in Denmark, speaking at the Danish Gambling Authority industry day. The Danish liberalised their gambling industry 10 years ago and they face many of the same issues we do here, and with many companies operating across borders, it is important to share notes and work closely with international regulators. It makes me proud that other regulators continue to look to Britain as a beacon of best practice. But in a globalised industry, as important as it is to work with international regulators, it is just as important we continue to work together with you as our co-regulatory partners right here in Great Britain.
Gambling has changed radically in recent years. Rather than just the bookies shop on a high street or town centre, it is now a global industry covering sports from across the world and offering hundreds of markets. Not to mention the casino games, bingo and poker available.
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.
Please remember that we are here to support you. I touched on this earlier, but there are plenty of resources available including our local authority bulletin, which I know many of you will receive. There is also the local authority inbox you can email with any questions or queries you may have and our website resources. Please do get in touch, we are more than happy to help. I’m also of course happy to answer your questions now.
Let’s keep working together, supporting each other, sharing information and together we can continue to make gambling safer, fairer and crime-free.
Thank you.
Last updated: 8 February 2023
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