Westminster Media Forum - Ian Angus keynote
24 April 2023
‘Regulation, reform and the future of the gambling industry’
Please note: This is the speech as drafted and may slightly differ from the delivered version.
Thank you, it’s great to be able to join you today. As many of you will already know, we at the Gambling Commission are committed to making gambling in Great Britain safer, fairer and crime-free. They are our Licencing Objectives and are fundamental to everything we do. Whilst, as I will go on to discuss, we think we have made progress in recent years, it’s clear to us that the next few years will provide a real opportunity for all parties to make a decisive difference towards gambling in Great Britain being safer, fairer and crime-free.
So this afternoon I want to spend a little time telling you how we think things have been going, why recent years have seen escalating enforcement action by the Commission but also increasing efforts at collaboration too. I’ll talk you through where we see the priorities for the coming year, and why, and I’ll shed light on a couple of important pieces of work. But first, I think it’s useful to start with looking at where we stand right now.
I think the first thing to say when we look at the state of gambling in Great Britain today is that it looks like the mature market that it is. When we look at the stats we have published:
- The year to end of March 2022 saw Gross Gambling Yield at £14.1 billion
- When we look at participation, the year to end of December 2022 saw 44% of adults taking part in a gambling activity in the last 4 weeks.
Whilst there is plenty of detail underneath these two headline stats, coming as they do in a world still working through the aftermath of the pandemic, that these statistics are relatively close to where the gambling sector was at the start of 2020 is worthy of reflection in and of itself.
Beyond this, whilst land-based gambling continued to recover last year, now back to 28% participation from 25% the year before, online has plateaued compared to the year before, at 27%. So although the long-term trend is still for growth online, there is no explosion in online participation.
Our latest figures for gambling harms are also statistically stable but I’ll talk more about those later.
The picture though that these numbers illustrate is the same one we see when we look across the gambling industry in Great Britain in general: we have a mature market where operators who want to grow need to be hyper innovative and ultra competitive.
Neither of these things are, in and of themselves, problematic. Neither does the Gambling Commission expect gambling businesses to stop trying to grow their businesses and their profits. But the nature of how an operator chooses to compete or innovate can have very different implications for consumers.
For example, last year saw a number of the largest operator groups stating revenues are down due to safer gambling measures they are introducing. Now we aren’t saying these groups are getting everything right, but this is a development that has our attention.
Sadly though, as a result of operators failing to comply with our rules and meet our standards, the last year has also seen the largest penalties that operators have ever had to pay. The numbers tell part of the story:
- Since the start of 2022 the Commission has concluded 27 enforcement cases with operators paying over £76 million because of regulatory failures.
- This compares with just three operators paying out £1.7m because of failures in the 2016/17 financial year.
But it’s not just about numbers. The reason we’ve been forced to escalate our enforcement action like this in recent years is because each failing is not just a failing against our rules, it’s a failing for ordinary people, some of whom have suffered terrible harms as a result. For example, recent cases have included:
- One customer was allowed to open a new account and spend £23,000 in 20 minutes without any checks.
- One customer was allowed to deposit £43,000 and lose £36,000 within seven days without being identified as being at risk of harm.
- And one customer was allowed to lose £70,000 over a 10-hour period just a day after opening the account because there were no controls in place to prevent large levels of high velocity spend by new customers.
All three of these examples are from different published enforcement cases that you can read on our website but there are sadly many more I could have shared. At the Commission we’re clear: failings like this cannot continue.
Where we find operators failing to meet our standards we will continue to take unrelenting action. We think the action we are taking makes clear what our expectations are. And at the volume we’re now broadcasting them, we are pretty sure those operators who were still deaf to them a year or two ago, are now getting the message.
Driving up the standards of gambling operators through our compliance and enforcement work is an important focus and will remain so. But we also want to work with the industry to improve protections for consumers as well as improving the evidence base and our regulation in general. Whilst we have previously been criticised for our efforts to be collaborative, we are clear that working together can lead to more progress, more quickly. And the results bear that out.
I led on one of the Commission’s ‘Industry Challenges’ a few years ago. Those projects - to make better use of Ad-Tech online to protect children and vulnerable people, to make online games safer by design and to clean up poor practice in so-called VIP schemes led to fundamental changes:
- An industry code of conduct, codified in our rule book, on the targeting of adverts online
- A raft of online games features phased out and banned, such as auto-play
- And a 70% decline in the number of customers within VIP schemes even before we brought in stringent guidance for operators.
We also challenged the industry to work with the tech sector and the Information Commissioner’s Office to develop a lawful, viable and effective Single Customer View solution to mitigate the risk of serious gambling harms. The BGC has led on that piece of work and will soon trial the first phase of GamProtect, its multi operator risk sharing solution. We look forward to the trial going live and the subsequent evaluation and development of the model.
And collaboration does not stop at the border either. Over the past year we have stepped up our engagement with other gambling regulators around the world, sharing best practice, experiences and discussing how we can work together and support each other in our own jurisdictions to achieve safer, fairer, and crime-free gambling. As more and more countries and jurisdictions look to open up and regulate online gambling this work is only going to become more important. Where strong relationships already exist between regulators, we are increasingly seeing the bad practice and bad behaviour of some licensed and unlicensed operators being shared and discussed. And that helps us look at those operators’ practices and operations in our own jurisdictions.
To be clear: No operator should want to be in this position. No operator should want to be the subject of discussion between regulators in different parts of the world.
So at the Commission we know that where it’s appropriate, we can work with industry and others to deliver better results for consumers across England, Scotland and Wales quicker through collaboration than we can alone. Allied with our continuing work to drive up standards, this approach leads on to a number of the areas we’re prioritising in the year ahead.
Now of course, it will be an important point for everyone with an interest in gambling in Great Britain when the White Paper is published for the Gambling Act Review. And for anyone who has read our Business Plan for the coming year, you will see that we are expecting a great deal of work for the Commission to come from it.
But waiting for the White Paper hasn’t stopped us taking action where we have felt it necessary to make gambling safer and fairer before:
- We announced and introduced strict measures to make online games safer by design
- Since last September we have introduced new, more prescriptive rules on customer interaction
- And as I’ve already said, we’ve continued to support efforts to develop a Single Customer View solution
It hasn’t stopped us taking action. And in our planning for the year ahead it hasn’t either.
Many of you will have heard our Chief Executive, Andrew Rhodes, talking about three principles that make up what we are calling the Commission Story. Principles that we want to run through our work going forward. They are:
- Putting people first
- Doing the right thing
- Regulation that works for all
Our collaborative work with the BGC and ICO on the Single Customer View is an example of putting people first.
And our investment in improving the evidence base we think makes clear our commitment to doing the right thing. Building on the ‘Setting the Evidence Agenda’ Conference we held in March, we will soon be publishing next steps outlining how to fill some of the evidence gaps we see over the next three years. Just last week we also published an update on the development of a new methodology for our Participation and Prevalence statistics. These projects bring us back to a key focus for the Commission that flows naturally from the three principles I have just mentioned: better data, better research and better evidence will lead to better regulation and better outcomes for consumers, industry and everyone else involved in gambling.
This is certainly true of the statistics we at the Commission publish and arguably, none are more important than our statistics on gambling participation and the prevalence of gambling harms.
Last year we held a successful pilot of a new methodology and published the data from that pilot. Since then we have been in the ‘experimental’ phase, and our update last week details the work of refining the methodology and getting it ready for scaling up to official statistics later this year. That very much remains our plan 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.
The pilot of course presented figures regarding levels of gambling related harms different to our current methodology. Whilst our current figures show the overall problem gambling rate is statistically stable at 0.2%, the pilot data suggested that rate for participants was 1.3%.
The figures are different. We make no apology for that.
As I have already said today, better data will lead to better regulation and better outcomes. The same is true of better numbers on gambling harms and that is what the Commission is most interested in.
And in terms of regulation that works for all, building on our collaborative approach, we will work with the gambling industry to explore how we can roll out account management with more effective and earlier engagement for operators – secure in the knowledge that where operators do not make efforts to meet our standards, our compliance and enforcement work will ensure serious repercussions.
I started today by saying that at the Commission, it’s clear to us that the next few years give a real opportunity to make a decisive difference towards gambling in Great Britain being safer, fairer and crime-free. Hopefully having listened to what I have to say, you agree. The Gambling Act Review is a big part of that but I think the steps that the Commission is already planning besides that, lay the ground work already.
And we want to continue by working with gambling operators, as well as others, to make more progress more quickly. But compliance is the first step. Where operators continue to fail in their obligations, we will continue to take uncompromising action.
So let’s prioritise compliance, prioritise safer, fairer and crime free gambling and through that prioritise the 22 million people who gamble in Great Britain.
Thank you.
Last updated: 24 April 2023
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