Lotteries Council Annual Conference - Sarah Gardner speech
24 May 2024Speech by Sarah Gardner
This speech was delivered by deputy chief executive Sarah Gardner at the Lotteries Council Annual Conference on 23 May 2024.
Please note: This is the speech as drafted and may slightly differ from the delivered version.
Thank you for that introduction and thank you everyone for being here today.
The Gambling Commission, as the regulator for gambling across Great Britain, works with Local Authorities to regulate the Society Lotteries sector and so having the chance to be with you here today and give you an update is really valuable and I thank you for that. I appreciate of course, that you are in the final stretch of the Conference now and I am sure you have had a productive two days. Being the penultimate speaker of the event though - and just after lunch no less - I understand that even those of you with the best attention spans may be struggling now. That is okay.
Because I know you will have all spent some time in the excellent workshops run by my colleagues, Claire, Louise and Joanne during the conference. They do a great job both for us at the Commission and for all of you in the sector, so I am sure they will have covered all the critical areas before now! They, of course, have my thanks - and I am sure yours too - for that.
So what will I be talking about today? Well since I was last with you, we have had a very busy twelve months. We have made great progress on the implementation of the Gambling Act Review, following the Government’s White Paper in April last year. So I’ll give you an update on that and pull out some of the most important points for the lotteries sector. I’ll also update on some other changes the Commission is currently working through that will impact on your organisations too. Looking further ahead I’ll touch on how the Commission sees the years ahead and how we are preparing for those in our new Corporate Strategy and that will lead me to underlining the value we place on our relationships with you and how that can foster collaboration going forwards. But first I thought I would briefly reflect on what our statistics are saying about the sector today.
Before I do though, I should point out that the statistics I am about to share are from the first wave of official statistics we have ever published using our new methodology. We are calling the new methodology the Gambling Survey for Great Britain (GSGB) and I’ll talk a little more about that in a moment. But first the stats.
These statistics are from a nationally representative sample of 4,801 adults aged 18 and over who were interviewed during the period July to November 2023. The headline rate from this sample, of overall participation in any gambling activity in the last 4 weeks was 48 percent. But when we look at the lotteries sector, excluding the National Lottery, we see 16 percent playing the products that all of you are providing and in turn raising funds for good causes. And of course that covers the mix of lotteries you offer. So draw-based tickets make up the majority and as you will know yourselves, this is mostly now through remote means and largely online. 14 percent of people buy a draw-based game ticket from your lotteries remotely whilst 6 percent buy one physically, either in person or by post. And 5 percent buy and play scratch cards and 3 percent play online instant win products too.
These statistics tell us a story of the scale of the society lotteries sector across Great Britain and I’ll touch on the importance of your role in our communities in a few moments but I just wanted to dwell on the GSGB – as we are of course starting to call it – before I move on. Some of you may have picked up on some disquiet from some commentators about it and may have heard some arguing the Commission has acted rashly in adopting the new methodology. So I want to tell you why that is not the case. The GSGB started its development via a consultation all the way back in December 2020. Since then, over the last three years or more, we have invested significant resources - money, people and time – and worked alongside experts in the field, to develop the best consumer gambling survey that we can. Through our stakeholder engagement we have also made sure to keep industry, those with lived experience, academics and policy makers and others informed at every step of the journey.
The GSGB is the largest and most detailed survey of its kind in the world today and the depth of information it will deliver will allow us to have a better understanding of gambling than ever before. And that covers both the range of products offered – including lotteries – the reasons people play and the impacts that gambling has. We commissioned an independent review of the methodology by a leading expert, Professor Patrick Sturgis of London School of Economics (LSE) and this was published in February this year. Professor Sturgis has some key recommendations for the Commission to consider to ensure the quality and robustness of the statistics continues to build confidence and I can assure you, we will deliver against those.
The Commission is pleased he has described our work developing this methodology as ‘exemplary in all respects’ and we agree with him that persisting with the former approach is no longer viable. But we also note the risks he identified in having a new methodology and the caution that should be applied when seeking to draw precise conclusions, including the potential for the over-reporting of participation and prevalence of harms as the survey is refined over time. But there is no turning back the clock on how we gather this data and nor should there be. Professor Sturgis makes clear, previous methodologies are no longer delivering like they used to. So to those who question ‘why now?’ the answer is that it is simply not credible to persist with a methodology that is outdated and has the gaps in evidence we have experienced. We are clear: the Commission has taken the steps we have in order to both safeguard and improve our data and we will continue to do so. Because better data and better evidence will mean better regulation and better outcomes. Not just for consumers, but for organisations like you too.
Back to what the data tells us though and as I said earlier, this new participation data tells us how important your lotteries are to the good causes you raise money for and the communities you support. Alongside the National Lottery, Society Lotteries raise great sums for good causes up and down the country and everyone in this room should be recognised for your efforts and for the public good your work leads to, year in and year out. Whilst we do not monitor the totals for smaller society lotteries, it is worth pointing out that in the year to March 2023, large Society Lotteries raised £421.7 million for good causes. That is slightly up on the year before and a 14.6 percent increase on the last pre-pandemic stats we have.
But this cannot be taken for granted. In order to continue to play the positive role in our communities that you do, the public needs to retain confidence in you and the rules that govern your products. And those rules need to keep up with the changing world we live in. And that is of course where we at the Commission come in and also where the Government’s Gambling Act Review plays a role too.
I know how vital your contribution is to our communities. This time last year when I joined you, the Government had only recently published the Gambling Act Review White Paper. Looking back on what I said then, I see that I was clear that implementation would take time, that we expected to publish the first consultations last Summer and that we would ‘take any and all consultation responses into consideration before making changes.’ I can happily say that all of that has turned out to be the case.
That first round of consultations that the Commission published last Summer received a huge response and so it has taken time to go through them, but at the start of this month, we published our responses to them. For those of you who do not live and breathe Gambling Commission consultations, a quick recap of what that first round covered. The areas consulted on were:
Financial risk and vulnerability
Remote games design
Improving consumer choice on direct marketing
Strengthening age verification in premises
Personal management licences.
Now whilst much of this will not be of direct concern for your organisations, the consultations did have the potential to have an impact on you. None more so than the consultation topic on direct marketing. Our consultation topic on direct marketing, or cross-selling, has led to us announcing measures designed to make gambling businesses provide customers with options to opt-in to the product type they are interested in receiving and the channels through which they wish to receive marketing. The aim is to empower customers by giving them more control over the direct gambling marketing they wish to receive and ensure they do not receive marketing that they do not want.
This is a good moment to highlight how consultation responses matter too. Originally, we included land-based and lotteries sectors in these changes. But we had significant and well evidenced responses through the consultation from these sectors regarding why the changes would not have been the right action at this time. Specifically, for the lotteries sector we received feedback that it would seriously impact their ability to raise vital funds and retain customers and would have limited impact given the narrow range of gambling products, leading to little need for society lotteries to ‘cross-sell’ in the first place. Given the complexities faced by such operators and our focus on the remote gambling marketing, we have therefore decided we will not include land-based gambling and the lottery sectors in scope of this requirement.
This of course is not to say that the Gambling Act Review contains nothing else for you to take note of. I know my colleagues have covered other areas in the workshops at this Conference already. And the Commission will continue to keep you updated on any issues that we progress that will have an impact. Likewise, whilst the responsibility for reviewing Free Draws and Prize Competitions sits with Department of Culture, Media & Sport (DCMS), we will of course continue to support the Department as required.
Whilst not actually a Gambling Act Review topic, before I move on from regulatory changes, I also wanted to highlight what the Commission is rolling out in the area of our Regulatory Returns.
Regulatory Returns are the core data that all of you, as organisations that provide gambling under a Commission licence, have to provide to us each year. Recently we announced we are moving to collect this data quarterly from all operators instead of the previous set up that only asked for data annually for many operators. At the same time we are also reducing the number of questions many operators have to answer. These changes will come into force from 1 July 2024 for all licensees.
What this means is that the first set of quarterly regulatory returns – those relating to the quarterly return period 1 July 2024 to 30 September 2024 - must be submitted by all licensees by 28 October 2024. If any of you hearing this today have any questions, please do ask us about it, either today with me or the team later or you can get in touch with us through our website. It is important for us all to get this right.
And getting things right is important when you are going through a time of change. The title of your conference this week is all about the changes you have all being facing in recent years: ‘Lotteries in the Digital World’. Likewise the Gambling Commission has been doing quite a bit of thinking about our place in a changing and digital world. And this is reflected in our new Corporate Strategy, titled ‘Gambling Regulation in a Digital Age’
Published last month, ahead of our Business Plan, our Corporate Strategy presents a series of commitments under the following areas of strategic focus that go along side continuing to deliver our core regulatory work over the next three years. They are:
using data and analytics to make gambling regulation more effective
enhancing our core operational functions
setting clear evidence-based requirements for licensees
being proactive and addressing issues at the earliest opportunity
regulating a successful National Lottery.
And our approach to stakeholder engagement runs throughout the strategy, as does our commitment to transparency as well. One area the Corporate Strategy has a focus on that demonstrates the importance of this is our work to tackle illegal gambling. I know the unfair competition that the lotteries sector faces from illegal lotteries online and on social media sites like Facebook is a concern to everyone here. And clamping down on these is definitely a part of our work in this space.
For example, in 2023 the Commission issued 452 cease and desist and disruption notices. This included 291 cease and desists notices to illegal websites and 161 referred to Facebook for closure, resulting in 212 instances where supply was disrupted (79 online websites and 133 Facebook closures). Running alongside using our own powers, we work closely with stakeholders to deliver results. So, for example, our work with His Majesty's Revenue & Customs (HRMC) means that where we have been tackling illegal Facebook lotteries, not only has this seen those lotteries shut down by the Gambling Commission, but the organisers have found themselves paying £600,000 in penalties to HMRC as well.
Delivering these commitments between now and 2027, will ensure that we improve the way we work to ensure gambling is safer, fairer and crime-free for the benefit of consumers, the wider public, and licensees. And we look forward to working with all of you on that where it applies to the society lotteries sector as well.
We’ll continue to look to work with you in the year ahead. Whether that be on the Gambling Act Review, making sure you maintain your standards with regards to compliance with our rules or other work going forward. We want to keep engaging with you and together keep on making gambling safer, fairer and crime free for everyone in Great Britain.
Thank you.
Last updated: 24 May 2024
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