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Tim Miller speech at CMS Conference

06 July 2022Speech by Tim Miller

Gambling Commission Executive Director Tim Miller spoke at the CMS Conference on Wednesday 6 July 2022.

Thank you David, it’s good to be here.

Today I want to update you on some of the things that the Commission will be working on over the coming months, including some areas where we will be really interested in your thoughts. I also want to talk a little bit about how we are looking to improve the way we consult with stakeholders, responding to feedback that we’ve had on previous consultations. Finally I’ll finish on how these efforts relate to what is going on in the wider world around gambling. But first, let’s just pause to consider where things stand at the moment.

It’s worth reflecting that as with society, gambling and those who gamble, are still looking to move beyond the pandemic. We all know that Covid-19 is still with us and it is still impacting on people and the economy – albeit with fewer headlines. But with restrictions having been lifted for some time now we have started to see a picture of recovery in land-based gambling and online has, in some areas, fallen back somewhat – with Real Event Betting GGY at land-based venues climbing to account for over 40% of total Real Event Betting GGY in March 2022.

Alongside this slow but steady recovery seen across land-based gambling, our data also shows that we are seeing signs of slowdown in online gambling engagement as consumers adjust to life out of lockdown, with slots session length decreasing from averaging at 21 minutes in 2020/21 to 18 minutes earlier this year.

Finally, as the rest of the world seeks to move into a post-pandemic world the growing and competitive global market means the pace of mergers and acquisitions has continued to accelerate.

The four biggest operator groups in Great Britain all have significant international footprints. They also, for the first time, will make up more than half of the British market by Gross Gambling Yield when you exclude the National Lottery.

And we expect this trend to continue in the near future.

On top of this, we continue to see the gamblification of other products and forms of entertainment. What do we mean by this? As entertainment more widely is becoming more seamless - across locations, channels and devices – so too gambling operators are looking to take advantage of this trend by moving towards more entertainment focused business models, reducing the friction between gambling and non-gambling products. And all this is without us even starting to talk about the opportunities, and risks, that the emerging metaverse is bringing.

At the same time, non-gambling brands, for example from the world of entertainment, are looking to enter the gambling space.

We have been warning against the risks that come from the gamblification of products that currently aren’t covered by gambling legislation and regulations for some time.

Whether it be lootboxes and things like skins betting that the Commission has been guarding against for some time now or newer novel products, such as NFTs, crypto and ‘synthetic shares’, the common thread is that the boundaries between these products and those that can be defined and regulated as gambling, are becoming increasingly blurred.

Overall then, today’s gambling market is one that remains incredibly energetic and innovative, and even throughout the upheaval of the pandemic, it has retained that nature. One that it shares with the global tech industry. It’s also an industry still looking for areas to grow. But no one here will be surprised to hear that amongst that innovation and change we remained concerned by the potential that gambling has to cause harm. Harm that sadly still becomes a reality for hundreds of thousands of people in Great Britain today. We are also still, too often, having to take action to enforce our other licencing objectives where operators are failing to keep crime out of gambling or to keep it fair and open.

The context of where the gambling industry is today is worth remembering when we look at what the Commission will be focussed upon over the coming months. Clearly many minds in this room will be focussed upon the Gambling Act Review. This is clearly a key moment for gambling in Great Britain and for the Commission itself, given our powers and resources being considered as part of that review. But as we’ve said since the call for evidence was launched: we haven’t been playing a waiting game for the Review. Where we have seen issues that need addressing or opportunities to reduce gambling harms, we have acted with the powers we already have. And this will continue.

So what does that mean for an industry in which we are seeing increasing international expansion and mergers. An industry that is grappling with the chaos wrought by a global pandemic but that has maintained its focus on growth through innovation and technological advance. An industry that provides entertainment for millions of its customers but also has the potential to cause harm. Well at the Gambling Commission, our answer to that question becomes clear when you look at what we are doing and the consultations we’ll be announcing in the near future.

Late last month we published the guidance that joins up with the customer interaction consultation response we published in April. Customer interaction has been a focus of the Commission for some time. Of course, there have always been customer interaction requirements but we built on these with further work in 2019. We then ran a further consultation that closed in February last year. Having gone through the over 13,000 responses, we published our response in April. That response has led us to a far more prescriptive regulation of customer interaction. Our preferred approach is and remains in favour of outcomes-based regulation and avoiding overly prescriptive rules and requirements. However, that preference is not sustainable where we consistently see a failure to achieve positive customer outcomes.

Too many times we still see customer interaction failings coming up in our casework and so we have acted. The guidance published last month sets out our expectations of operators and provides further information for remote gambling businesses on:

  • identifying vulnerable customers
  • indicators of harm they must monitor for, including what is considered a ‘strong’ indicator of harm
  • when to use automated systems and processes
  • how to evaluate the impact of customer interactions.

Our focus on customer interaction has been there for some time now and will certainly be continuing over the coming months. Both the Commission and the Government have stated publicly that more work is needed here, especially on how operators understand whether they are allowing customers to gamble in ways that are unaffordable. So a continuing focus on this should come as no surprise to anyone.

But alongside that, this summer the Commission will be seeking views from stakeholders on a number of other issues.

This will include exploring whether we can improve the way we calculate financial penalties for regulatory breaches to ensure they better drive compliance with the licensing objectives and to seek to be more transparent in the way we calculate them. We will also be considering whether accountability for meeting regulatory obligations can be increased within businesses through expanding the personal management licence regime.

I’m sure even in those few sentences there is plenty of food for thought for a room full of lawyers! But I do want to say a bit about how we are going to approach consulting on these and future issues.

Over the last couple of years I’ve discussed with a number of you, and with others, about the way the Commission carries out consultations. Two messages came out clearly- firstly, people feel that we sometimes take a scattergun approach to consultations. We find an issue and we push out a consultation, regardless of what else is going on or what else we have asked operators to do or provide views on at that time. This makes it hard for stakeholders to plan the time needed to respond and, where necessary to implement changes. Secondly, people have also questioned whether consultation responses really make a difference to the outcome. A concern that sometimes the question is so narrow or the minute details seem so locked in that stakeholder views won’t change anything.

So these concerns are leading to the Commission looking to change how we seek stakeholder views and how we carry out consultations.

As a result, our next set of consultations will be what is the first of our new approach that I’m calling ‘consultation windows’. We are aiming to set out two periods a year where any consultations will be published, meaning a more predictable pattern for operators, lawyers and other stakeholders to plan when they need to be ready to submit evidence. It will also mean that updates to LCCP and guidance in turn become more predictable, helping industry keep on top of their obligations. I can’t promise we won’t ever be forced to issue a consultation outside these periods but that should be the exception rather than the rule and we would clearly explain why we needed to depart from the usual ‘window’.

Secondly, you may find that our next set of consultations look a bit different to what we have previously put out there. Different issues need to be considered in different ways. Some may lend themselves to a very specific proposal being consulted on at the outset. Others may need a more deliberative approach with an emerging idea being shared at an early stage for stakeholders to consider before deciding whether to proceed to develop detailed proposals for further consultation. My hope is that this approach will strike the right balance between making changes at pace when we need to and giving some of the bigger or more complex ideas the time and space needed to be properly developed. Importantly, my expectation is that our enhanced approach to consulting will enable all stakeholders to feel and see that their voices are heard.

Whilst that covers a lot of our forward plan, we are also putting the pressure on to make sure that across the gambling sector – both operators and the regulator – are making the most of the data that we collect and how we collect it in the first place.

For our part, we published the results of our Participation and Prevalence Methodology Pilot earlier this year. We released the initial outcome in May and the result that we are most interested in is that the pilot suggests the new methodology is sound and ready to be experimented with and then scaled up to become our new official statistic. That is what we intend to do and when it launches fully, it will be surveying around twenty thousand people a year – one of the largest participation and prevalence surveys of its kind.

We’ll be using the next year to analyse the new methodology further, correcting issues where we find them and scaling it up so it’s ready to become the new ‘gold standard’ of participation and prevalence. Of course, the data we released from the pilot also got coverage. We understand that – new problem gambler data – whether at an appropriate scale or from a pilot, will always be of interest. But we’d like to be clear that the pilot data can not be used as an estimate of problem gambling at this stage.

Beyond the Pilot, data also plays an important role as we and the ICO continue to support industry efforts to pilot a Single Customer View, that has the potential to reduce gambling harms without risking customer data. We are also investing in the data we collect more widely and you can read more about what we are doing in this area in our Business Plan. The better data we have the better analysis we will be able to do, leading to more effective interventions.

Earlier I touched on the global picture, of a growing and competitive market increasing the pace of mergers and acquisitions and where gamblification of entertainment crosses ever more leisure activities. And this wider view is another important factor for both the gambling sector here in Great Britain but also for the work of the Commission. The Commission sometimes gets some stick for its efforts to be a collaborative regulator- either for not collaborating enough with industry or for collaborating at all. We don’t mind that. Where collaboration can lead to better results – safer and fairer gambling – we stand ready to work with others, including operators and others in the industry. But increasingly our collaborative approach doesn’t end at the White Cliffs of Dover. In today’s global market, with multinational operators, increasingly looking like global tech companies, the Commission recognises it will get better results for the British public by looking at what works in other jurisdictions and looking at how we can work more closely with other regulators to make gambling fairer and safer.

Last year I joined the Board of GREF- the Gaming Regulators European Forum. It is clear that there is a growing appetite for regulators across Europe, and indeed more widely, to work much more closely together. The risks that can come from the so called ‘black market’ is just one of those issues that really lends itself to cross-jurisdictional cooperation. In particular, where an operator that is licensed in one jurisdiction is operating illegally in another regulated jurisdiction there seems to be considerable scope for those two regulators to take more co-ordinated regulatory action- for illegal activity in one regulated jurisdiction to have regulatory consequences in another. It is my hope and expectation that you will see more and more examples of regulators working in lock step across international borders.

So to close, when we look at gambling today, we see a vast interconnected global market, of increasing innovation and technological advancement. One that’s always changing. And for many people that change is exciting and rewarding. But that same spirit of innovation also needs to be harnessed to ensure that this global market doesn’t advance in a way that fails to fully address the harms that people can face when gambling. We at the Gambling Commission remain dedicated to making gambling in Great Britain as fair and as safe, for everyone, as possible. We aren’t waiting, we are getting on with the job. And we look forward to working with you all to do just that.

Thank you.

Last updated: 6 July 2022

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