Name and shame betting companies for poor behaviour
28 June 2020
“Complacent” DCMS and “slow, weak” regulator it oversees lagging behind industry moves and public attitudes to gambling harm; both have “failed to adequately protect consumers”; whole system of regulation needs a “radical overhaul”.
The Department for Digital, Culture, Media & Sport (DCMS) and the Gambling Commission it oversees have an “unacceptably weak understanding” of the impact of gambling harms and lack measurable targets for reducing them. The Gambling Commission has “no key performance indicators” and the departmental leadership lacks urgency to address this.
In a report published Sunday 28 June 2020, the House of Commons Public Accounts Committee says the Gambling Commission is not proactively influencing gambling operators to improve protections, and consistently lags behind moves in the gambling industry. Where gambling operators fail to act responsibly, consumers do not have the same rights to redress as in other sectors.
There are an estimated 395,000 problem gamblers in the UK, with a further 1.8 million people ‘at risk'. The effects can be devastating, life-changing for people and whole families, including financial and home loss, relationship breakdowns, criminality and suicide.
The Gambling Commission is a non-departmental public body funded by licence fees from gambling operators. In 2018-19 it took £19 million in these licence fees: less than 0.2% of the £11.3 billion gambling yield that year. In contrast to the Commission's £19m fees a year, the gambling industry has agreed to spend £60m to treat problem gamblers.
'Prevention is better than cure'
The government has approached other public health issues on the basis that prevention is better than cure. However, the Department was unwilling to accept the premise that increasing the Commission's budget to prevent harm would be preferable to spending on treating problem gamblers. The Commission increased the value of the financial penalties it enforced from £1.4 million in 2014-15 to £19.6 million in 2018-19, but it doesn't know whether this has strengthened the deterrent to breaking rules for operators.
The Gambling Commission also has little understanding of the impact of its other regulatory action, including its ban on the use of credit cards for online gambling.
The Committee finds the pace of change to ensure effective regulation has been slow and the penalties on companies which don't effectively tackle problem gambling are weak.
Failure to protect consumers
It says the Department and Commission together have “failed to adequately protect consumers” at a time of considerable change in the sector, as gambling increasingly moves online and new games become popular. The collection of evidence has been patchy and behind the curve as the nature of gambling has changed, and the Commission has failed to develop responses even where it has identified potential problems, such as during the Covid-19 lockdown.
The temporary ban on gambling ads during lockdown has now been lifted – in its response to the report the Commission should provide an update on gambling patterns and industry behaviour during Covid-19, and any regulatory action it has taken to tackle the industry.
The Committee calls for a new, published league table of gambling operators' behaviour towards their customers, naming and shaming poor performers. It says the Department must urgently begin its long-planned review of the Gambling Act, setting out a timetable within three months of this report.
The Committee concludes:
- The Commission should develop a plan for how it will be more proactive in influencing the industry to treat consumers better, including using reputational tools such as league tables indicating how well each operator treats its customers
- The Commission should urgently investigate the impact of fixed odds betting that falls under “lottery” legislation and is accessible by 16 and 17-year-olds
- The Commission and the Department should urgently look at online fixed odds betting and report back to the Committee with how they intend to increase effectiveness of online harm reduction within three months.
- The Commission needs to “radically improve” the data and insight it collects to know what is going wrong for consumers and develop better information on its own performance: Within three months the Department and Commission should set out to the Committee what actions they will take to ensure they have the research and evidence base needed to better understand gambling problems, and to design an effective regulatory response.
- The Department and Commission should work together to strengthen consumer rights assess the impact on consumers of gaps in redress arrangements and examine options for increasing statutory protections with an individual right of redress for breaches of the Social Responsibility Code of Practice.
Meg Hillier MP, Chair of the Committee, said:
“What has emerged in evidence is a picture of a torpid, toothless regulator that doesn't seem terribly interested in either the harms it exists to reduce or the means it might use to achieve that. The Commission needs a radical overhaul: it must be quicker at responding to problems, update company licence conditions to protect vulnerable consumers and beef up those consumers' rights to redress when it fails.
“The issue of gambling harm is not high up enough the Government's agenda. The review of the Gambling Act is long overdue and an opportunity to see a step change in how problem gambling is treated. The Department must not keep dragging its feet, we need to see urgent moves on the badly needed overhaul of the system.
“Regulatory failure this comprehensive needs a quick pincer movement to expose the miscreants and strengthen those they harm.”