18
Examination of witnesses
Grainne Hurst, Dan Waugh and Vaughan Lewis.
Q8 The Chair: Welcome, everybody, to the second part of today’s meeting, which is following up on the work of the Select Committee on the socioeconomic impact of the gambling industry. This inquiry is focusing specifically on gambling advertising, marketing and sponsorship. Thank you to Grainne Hurst, Vaughan Lewis and Dan Waugh for attending. I do not think you were in for the earlier session, were you?
Grainne Hurst: No, but we listened to it.
The Chair: Right, so I will not repeat everything about taking a verbatim transcript. If you need to add extra information or change anything, you are welcome to contact the committee.
Q9 Lord Butler of Brockwell: Good morning. The Gambling Commission’s gambling survey of Great Britain suggests that approximately 1.4 million adults in Great Britain score eight or higher on the problem gambling index. That suggests that one in 11 adults is directly or indirectly harmed by their own or somebody else’s gambling, but there are also 1.4 million suffering directly. Of particular concern is that the research indicates that as many as 80,000 children suffer from gambling harm. In the light of that, who or what is responsible for that amount of suffering which arises from gambling?
Grainne Hurst: Thank you for the question, which is really important and crucial to the debate. It is right that we are having this discussion to get the right protections in place for those people.
The gambling industry, as Culture Secretary Lisa Nandy says, can bring joy to millions of customers. We know that 22.5 million customers enjoy our products every month. We are very clear that a number of people—0.7% is the NHS survey for England’s accredited statistic—are at risk, which is why the industry has invested millions of pounds in safer gambling measures. Before the mandatory levy came into place, we voluntarily funded £170 million-worth of research, education and treatment around the causes and consequences of harm. We have funded programmes delivering educational awareness courses to young people, in universities and to doctors, in order to make sure that a conversation is happening. We have also funded treatment centres; obviously, that is now moving on to a mandatory footing.
The industry has also implemented a number of changes, including product restrictions and marketing restrictions. We now have online staking limits as a result of the White Paper. So I would say that the industry takes this issue incredibly seriously and has continued to invest in it. We do have some questions, though, on the stats from the Gambling Survey for Great Britain; I will hand over to my colleague, Dan, to talk about those in a moment.
On your specific question about responsibility, our view is very much that it is a shared duty among everybody in the ecosystem. The operators and BGC members have a role to play in that, in terms of making sure that their products adhere to the licensing objectives: not targeting the young or the vulnerable; keeping crime out of gambling; and making sure that we deliver our products in a fair, transparent and open system. I shall now hand over to Dan for the GSGB figures.
Dan Waugh: Thanks, Grainne. I preface this by saying that harmful gambling is a serious issue. It is, therefore, incumbent on us to make sure that we treat it seriously and really get behind some of the data points. It is also worth saying that the Health Survey for England suggests a problem gambling population estimate of around 350,000, which is still a meaningful figure. This is not an attempt to suggest that the harms are not real and not important.
Lord Butler of Brockwell: It is an increasing figure, is it not?
Dan Waugh: No, it is not. If you take a look at the health survey series, the problem gambling rate in the last Health Survey for England, which was in 2024, was below the level in 2015. It has been within range since the health survey series started.
We presented evidence to the Gambling Commission and DCMS showing that the GSGB substantially overstates participation in gambling. We were able to do that by testing against hard data from the industry, including from the football pools, exchange betting and casino games played in casinos, which were the only three sectors on which we were able to get data. So we see a real question mark there.
It is also worth bearing in mind that the GSGB provides substantially higher figures than all other previous official statistics, including those in the British Gambling Prevalence Survey, the NHS Health Survey for England, the NHS Scottish Health Survey, the NHS Adult Psychiatric Morbidity Survey, the DCMS’s Taking Part Survey and the Gambling Commission’s own quarterly gambling survey. So we have to be quite careful here. There is a lot of evidence that the GSGB is not accurate.
The final point I would make in this respect is that, if we believe the GSGB to be a more accurate measure than the NHS statistics, it implies that the NHS has been seriously and serially underreporting on a wide range of health behaviours for around 35 years. We have to be quite careful when we are looking at these statistics. You will hear from Sarah Gardner from the Gambling Commission later, but there is clear evidence suggesting that the GSGB may not be a reliable instrument. That said, I come back to my earlier point: whether it is 350,000 people or 1.4 million people, it is still a serious issue.
On the 80,000 children, I think that that figure is from the Young People and Gambling Survey in 2023. Again, I am not seeking to belittle the issue, but, if we understand what the survey data is actually telling us, we can arrive at more informed decisions on what to do about it. The figure of 80,000 is based on 25 children in the survey who were classified as DSM-IV-MR-J problem gamblers. That is not the same classification as in the adult surveys. In fact, the adult survey showed a nil rate of problem gambling using the DSM-IV classification for 16 and 17 year-olds.
Of those 25 children, two-thirds reported playing amusements in seaside arcades. A further 56% reported placing bets with friends and family. Some 40% gambled on lottery games. Another 40% played cards with friends and family. Sorry—that earlier figure was for private betting. Some 36% reported playing fruit machines in pubs, social clubs and arcades, while 28% reported playing bingo at social clubs or holiday parks.
That is what these problem gamblers in the Young People and Gambling Survey are doing. Their participation in age-restricted activities is extraordinarily low. If you take online gambling, it is almost entirely facilitated by parents allowing them to use their own online gambling accounts. So, again, I am not trying to belittle the issue, but it is important to understand what these statistics mean.
I will say one more thing about the survey. Some of the data suggests that it is potentially not the most reliable survey. In the survey, one of the 25 children with a problem gambling classification reported doing all of the following in the week prior to taking the survey. He or she said that they had bought National Lottery tickets, National Lottery scratch cards and National Lottery instant wins. They said that they had played seaside amusements; fruit machines in pubs, social clubs and betting shops; cards with friends; bingo in licensed bingo clubs; bingo at a holiday park or in a social club; bingo online; casino games online; and casino games in a licensed casino. They also reported placing bets in shops and online on e-sports, as well as with friends and family.
Baroness Fookes: Good God.
Dan Waugh: We have to look at all this and ask: is it plausible that a 13 year-old child could have done all these things? We have to remember that these surveys take place in classrooms, and children are not always scrupulously honest in how they answer these exercises.
Vaughan Lewis: I would like to add a couple of points, if I may; I thank the committee for giving me the opportunity to speak. I have had the benefit of operating in a number of countries with varying degrees of restrictions on advertising, so I can bring some experience of the impacts of that on the market and what they mean in practice.
Before I do so, I would like to add to what Dan said. We have a problem here: conflation of the regulated market and other forms of gambling. Dan has explained this for the underage population specifically. Those people are not gambling with regulated operators. They are playing cards with themselves and playing slots in the arcade at the seaside. These are not regulated products, so a restriction on regulated providers will have no impact on them.
My second, broader point is that, in my view, population-wide measures do two things. First, they make the implicit assumption that all gambling is dangerous. I would strongly disagree with that. I am a very enthusiastic gambler myself. Like the 20 million customers who bet frequently, I enjoy it and derive great benefits from it. We risk making population-level decisions where the committee potentially needs to ask whether more targeted interventions would be more appropriate and would deliver more of the objectives.
On where the responsibilities lie, as Grainne ran through, there are multiple layers. The most important one, perhaps, is a question for Parliament: what are the objectives of gambling regulation? As we look across international markets, there are real trade-offs. There are trade-offs between economic activity, channelisation, blanket restrictions and targeted restrictions. These are really serious issues, where full consideration of the consequences is needed.
Q10 Lord Foster of Bath: May I ask a quick follow-up question? You said categorically that not all gambling is dangerous. Which bits of gambling are dangerous?
Vaughan Lewis: The vast majority of people who gamble do not incur harm, so their gambling is not dangerous. As with any product, there is risk of excess consumption and excess spending. That is not unique to gambling, but there are some factors around gambling that make it riskier than other products, which is why there is regulation. Parliament needs to determine the goals for that regulation.
Lord Foster of Bath: Just help the committee. You are going to say what you are you going to say, but I am interested in your own view, with your expertise and your involvement in the industry. Which aspects of the industry do you believe the UK should regulate more stringently than it does currently because, in your view, they have some of these dangerous aspects attached to them?
Vaughan Lewis: In my view, that is a question for Parliament, in terms of the objectives.
Lord Foster of Bath: We are asking for your specific expertise. Parliament can only make decisions based on experience and evidence. We are asking for evidence from you. Where do you think we should regulate more stringently than we currently do?
Vaughan Lewis: There are real trade-offs here. The more stringent the regulations are and the more restrictions are put in front of people, the more they will find their way to alternatives that do not do this. This morning, I received a promotional email from a black-market site promoting the fact that it has no KYC checks and no requirements. That is a specific form of marketing to people like me, who engage very happily in gambling but get frustrated with document checks, so that market is real. I cannot tell Parliament which route to take until there is a very clear objective on what the requirements are.
Lord Smith of Hindhead: Who do you report that black-market approach to?
Vaughan Lewis: Who do I report it to?
Lord Smith of Hindhead: Yes. You have received an email; who do you call it to?
Grainne Hurst: The Gambling Commission has a central system where you can report black-market operators. We would obviously like to see more done on that, and more quickly. I was completely shocked actually. Some of you may know Alex Wood, who runs the “Scam Secrets” programme on BBC Radio 4. He did some investigation into this issue, and he was not only allowed to sign up to an illegal market using the name “Little Bo Peep, age six”, but he was able to place a number of bets on those sites as “Little Bo Peep, age six”. He also signed up with the name of the FBI’s most wanted criminal on a number of these illegal sites. Again, they were willing to accept his bets and take his money.
I think we need a collective effort from all of us to tackle the black market more than we currently do, because currently there is no age verification. As we can see from that example, you can sign up aged six. There are no deposit limits. There are no staking limits. You can gamble with a credit card, which you cannot do in a regulated sector. You are able to use crypto, which obviously you cannot do in the regulated sector. There are no self-exclusions. There is no “return to player” on their games. There is no intervention. There are no markers of harm. They are literally targeting our young people, as Vaughan says, through social media and through internet search engines, and they do not care where the money is from. That is something that I think we can all agree, no matter what side of the argument we are on, needs to be stopped. Therefore, there is a lot more that the Gambling Commission can do, social media companies can do, payment providers can do, to strike at the heart of these criminals’ financial schemes. And obviously the Government as well.
Q11 Baroness Gill: Thank you for acknowledging that gambling can harm. The industry maintains that advertising has no effect on consumption and that it basically helps operators differentiate product offerings and helps customers see which brands can be trusted. However, research from the Gambling Commission reflects the contrary to this and suggests that advertising does influence gambling behaviour, particularly prompting people to have unplanned spending, and may also drive participation and normalise gambling.
I have five parts to my question. First, why would you say gambling companies advertise? You might perhaps give us some insight as to how much they spend on it. Secondly, in your opinion, does gambling advertising influence gambling behaviour and lead to increased problems among adults and under-18s? Thirdly, what research actually highlights that gambling advertising does not lead to increased gambling harm? Should under-18s be able to see gambling advertising? And does gambling advertising normalise the link between sports and gambling?
Grainne Hurst: Thank you; I am happy to kick us off on that. It is a really important question, because we heard the figure in the previous session that the industry is spending £2 billion on advertising in the UK. That does not differentiate between the regulated advertising sector and the illegal advertising sector. There is a report from the World Advertising Research Centre which has looked into this: it was originally committed to the £2 billion figure and has since said that the regulated sector is about £1.1 billion of that, and the illegal sector is £800 million to £900 million-worth of advertising spend. That should be and is incredibly shocking for all of us in the regulated sector.
More worryingly, we know from a similar report that, in two years’ time, the illegal market is going to outstrip the regulated sector in advertising spend. We have seen that booming over the last three to four years as tax and regulation in the UK has become stricter. Hopefully, that answers your question on spend. What I would quickly say is that the regulated gambling advertising spend has been declining, year on year, over the last five to six years, and just for some context, the regulated gambling advertising spend may be about 2.5% of the total advertising spend in the UK, which I think is important for context.
As to why companies advertise, I will hand over to Vaughan in a moment, but there are a number of reasons for that: to compete with one another and obviously to acquire new customers. Traditionally, what we have seen is that BGC members would be advertising to compete with one another, but the landscape has completely changed in recent years because of the illegal market, which follows none of the rules, regulations and restrictions that are, rightly, on the regulated sector when it comes to advertising. I am happy to cover that in more detail later, but if Vaughan wants to take the “why” question, I can come back to the rest.
Vaughan Lewis: Thanks. Advertising has multiple roles. The primary role is around competition, as with any product. So, there are people who want to engage with services—who want to buy entertainment, who want to buy a car or whatever it might be. The role of advertising is to put your brand in front of mine, so that you have your brand messages out there, your positioning, where you stand out, what are the reasons to use your product or your services relative to another one. That is the primary role. It breaks down across multiple levers when you go into the details across brand positioning, new customers, customer retention or reactivation of customers you used to have: there are multiple levers within it, but the primary role is around competition.
I think it is really important at this point to describe the nature of the UK market. Having operated, as I said, across multiple markets, the UK really stands out in a number of ways. The first one, and it is one that will possibly surprise many people, is that it is not a growing market; it is actually a shrinking market. If we look at the market in total gambling spend, it is £18 billion across all regulated products, including the Lottery. If we roll back 10 years in real terms, as we do with all government spending, debt and so on, the market 10 years ago was over £20 billion, so the industry has actually declined by 7% over the last decade. That is despite several years of population growth, so spend per adult over the last 10 years has declined by 15%.
That is not something that you will hear very often: in my former role leading a business in this sector, I would not like to proclaim that, but that is the blunt reality. This is a very mature industry that is very well regulated and tightly controlled, so the role of advertising within it is very clear: it is around market share. Now, what we have been seeing in the industry is that demand has been shifting. It has been shifting between channels, moving from betting shops to online; and it has been shifting between products, from sports betting to gaming. What that has meant is that operators have had to evolve their products, their experiences, their brands and their positioning to cater for those changing dynamics. So, the role of advertising is very clearly around competition.
To add to Grainne’s point on your question about harm, this is an industry where there is some harm. People do spend too much. Everybody who works in the industry is conscious of that. What we and other industry operators and regulated operators share with the former witnesses is that we do not want to see that. We want to see harm reduced. Where we are seeing that harm, and where there is an uncontrolled environment, is in that black market, which is competing against all of us, with no controls and no processes.
Of course we want to see harm reduced, but there are questions for the committee and for Parliament. What are the best ways to do that? What goals are we trying to achieve? What are the implications of the restrictions that we put in place? We do not live in a world where restrictions have no impact.
I am a father of two teenagers. Despite my having worked for some of the most storied brands in the market—you know, William Hill, Sky Bet—the brands that my children recognise most are Rainbet, Roobet and Stake. Those guys not only sponsor football teams and F1 teams, they promote themselves aggressively through influencers, streaming platforms and social media. When you ask how we can address harm through restrictions, the regulated sector is fully aligned with the goal of bringing gambling spend into the regulated sector.
The final point I would make is that we need to be conscious about how we are addressing this. The vast majority of gamblers are people like me. I am grateful to be here today; I turned down an invitation to Royal Ascot, so I could have been in my top hat and tails with 50,000 people enjoying a world-class sport where the UK really does lead. That sport is heavily reliant on support from the gambling industry, and 5,000 people will be there today, betting very happily and very enthusiastically on each race. Blanket restrictions that treat all of us as if we were being harmed have to be seriously questioned. We have to consider the implications of that approach, not just for gambling but for other sectors. If we remove individual responsibility, the implications for that are quite significant for other sectors, in my view.
Grainne Hurst: I will just come back to your other question, Baroness Gill, on influencing behaviour. The truth is that advertising, per se, will influence some people’s behaviour and, equally, will not influence other people’s behaviour. We see that, these days, what is more important are things such as peer reviews or whether your friends have had a good experience and are passing that experience on. To get to the crux of the matter, there is little evidence to confirm any causal link between gambling advertising and gambling-related harm, which I think was your second question.
You have the Government and the Gambling Commission coming after this. They confirmed it in the White Paper, which—I will quote very briefly—states that “the call for evidence submissions showed a lack of conclusive evidence on the relationship between advertising and harm. The limited high-quality evidence we received shows a link between exposure to advertising and gambling participation, but there was little evidence of a causal link with gambling harms or the development of gambling disorder”.
We are obviously keen to see additional independent research conducted across the board. I know that part of the remit of the mandatory levy will be to look at research, so we may well see additional evidence coming through. As of the current moment, however, there is little evidence to confirm or conclude any link there.
I think your last point was on underage gambling. I want to be really clear for the committee on this point that the BGC and its members take an absolutely zero-tolerance approach to children being targeted with ads or being able to access our sites. We are an adult product with adult content. We have very strict rules and regulations in place to make sure that young people cannot access our sites. We do not target children with our advertising. It would be a complete breach of our ASA codes and our Gambling Commission licensing codes, and that is not something that we do. What we can say, though, which Vaughan has obviously alluded to, is that the illegal market is using streamers, TV personalities and Premier League footballers. It uses imagery that appeals to children, which the regulated sector is not allowed to do, in order to attract them to sites.
Only yesterday, I saw on a social media site that they were claiming, with a deepfake, that Ronaldo—obviously, a famous footballer—was on Sky News, celebrating that a 15 year-old girl had won £720,000 with this particular illegal operator and calling other young children to do the same. That was completely shocking. It does not, and would never, happen in the regulated sector. Again, that is why we all need to do more to tackle the illegal market.
Baroness Gill: My last point was actually about normalising the link between sport and gambling, but I will come back on one other point very quickly. From what you are saying, most of the issues are with unregulated markets and unregulated gambling organisations. Surely it would help if there were restrictions on advertising on, say, social media, which is the forum they use.
Grainne Hurst: We agree with you, and with what was said in the previous session, that there should be a ban on illegal companies being able to advertise on social media and also to appear on search engines—100%. You can open up your phone or laptop and type into Google, “Not on Gamstop casino” or “Not on Gamstop betting” and pages and pages of those will come up.
The Chair: That leads very well to Baroness Garden.
Q12 Baroness Garden of Frognal: I have got a very short question, so maybe your answers can be short too. Since the 2020 report, the number of people signing up to the national self-exclusion register Gamstop has increased substantially and over 1.5 million people have now signed up. If the licensed online gambling market is safe, why have half a million people applied?
The Chair: It says half a million, not 1.5 million.
Baroness Garden of Frognal: I am so sorry, I am so enthusiastic, you see. If half a million have signed up to bar themselves from using it, how come it is so safe?
Grainne Hurst: I will hand over to my colleague Dan in a moment, who has done more research in this space. Gamstop is a really effective tool for those people who would like to self-exclude from the regulated sector. They can do that for different periods of time, whether it be six months, a year or five years. We can see that the number you cited is reflective of the 0.7% from the NHS survey that shows that that percentage of the adult population is at risk.
There are two important things that I would like to point out from the Gamstop evaluation, which Dan may also come to. The first is that roughly one-third of those on the Gamstop register have said that they do that to take a break rather than to self-exclude completely for other reasons. It is really interesting and telling, given what we have been talking about today, that the recent Gamstop evaluation report suggests that it would like to see more action taken on illegal sites because it is finding that the people who are self-excluding are using illegal sites. Dan, do you want to come in?
Dan Waugh: I will add a bit more. This is Gamstop’s own research. It surveyed a portion of its users and asked about their motivations for using it. There were a variety of reasons: to take a break from gambling or to reduce the time and money people spent on the activity. If you had similar self-exclusion regimes for other forms of consumption, you might find similar levels of people taking part, for similar motives. You do not necessarily need to have a problem with gambling to decide to self-exclude; it can just be a support mechanism.
To Grainne’s point, about six in 10—three in five—use the five-year option, but the rest, a significant proportion, tend to use shorter windows of exclusion, which suggests that it is not a harm-prevention measure as such but is more about support. One-third say they use it to prevent harm and one in five say they use it to support their recovery. It is good in a way that lots of people are using it, because that is what it is there for. We would be worried if you set up a self-exclusion system and people did not use it. However, it would be wrong to infer that all the people using it have gambling problems.
Grainne Hurst: I will just come in briefly with an additional point. The Betting and Gaming Council has voluntarily introduced a new scheme called GamProtect, which is, if you like, an additional layer on top of the existing self-exclusion schemes. GamProtect allows operators that are members of the scheme to share information about customers who are at high risk in order that they can be excluded from the operators that are within that system. We are in active conversations with the Gambling Commission to see whether that could be mandated beyond BGC voluntary members to increase the levels of protection.
The Chair: Shall we move on to the regulatory framework? Lord Filkin has a question.
Q13 Lord Filkin: There are quite a lot of questions here, but I want to focus just on the second one, which is perhaps the fundamental one. It is a question, essentially, to get your views on the record on whether the current regulatory framework for gambling advertising, first, adequately protects under-18s from exposure to gambling advertising and, secondly, protects adults from harm. I should be grateful if you would focus on the regulated sector, because you have already spoken extensively about the illegal sector and the committee is interested not just in the illegal sector but in the regulated sector itself. Would you focus on that, please?
Grainne Hurst: I am happy to take that and then I will hand over to my colleagues. The existing system of regulation is, if you like, a triple lock system, whereby we have the Gambling Commission as the statutory regulator, which sets mandatory licence conditions and, obviously, ensures and demands that there is strict compliance with the advertising codes. We then have the ASA and the CAP codes, and then the third layer is the industry voluntary-led codes. Five or six core advertising principles are at play in the existing regulatory scheme. The foundational requirements are, obviously, that any advertising in the regulated sector has to be socially responsible. What does that mean and what does that look like in practice? It means that we must not target minors or young people via any strong appeal, which we have already talked a bit about, but that is using people who may be celebrities, pop stars, you name it, but also imagery, cartoons, and language that might be appealing to children. That is obviously a key one for us. We also, as a foundational requirement, must not exploit the vulnerable.
Lord Filkin: Could you tell us what should be changed, not what you are doing at present? What should be changed?
Grainne Hurst: Yes, sure. Again, I think that the regulatory framework is strict. We have strict rules and robust enforcement in place to make sure that young people are not being targeted, that the vulnerable are not being targeted, and that we are not linking gambling to successes or any lifestyle changes. Obviously, if there are any breaches to that code then there are fines or loss of licence. On what could be changed, sometimes the policy framework has not kept up to date, as we have heard, with creator-led content. There is an area there where the regulator and the ASA could potentially extend their remit to look at some of these illegal sites that are currently advertising to young people. But I would say that the existing system is effective. If you look at the number of breaches in the regulated sector, it is between, I think, 0.01 and 0.06.
Lord Filkin: May I ask why you think the overwhelming proportion of the public think there should be significantly tighter regulation of gambling advertising? Are they all wrong?
Grainne Hurst: My starting point is that gambling is a legal, legitimate and highly regulated industry.
Lord Filkin: We agree with you and the commission about that; we are absolutely clear on that. We are not anti-gambling; we are anti-gambling harm. So why do the public think that it should be more tightly regulated?
Grainne Hurst: I can only presume that that is a perception that they have because there is not a distinction between the regulated sector and the illegal market.
Lord Filkin: That speaks to your book, does it not? Obviously, the illegal market is leaching business away from you. It is highly convenient to attack the weak regulation of the illegal market, which many people would probably agree with, but it is a focus on what you as an industry think should be done to better regulate the legal market at present.
Let me put it more clearly. Many people see this as a complete muddle between the various bodies meant to be regulating the advertising of gambling. Secondly, as you have said yourself, and you are right, they are usually behind the game in terms of product development and marketing techniques. Perhaps you could give us a bit more focus on that, if you would.
Grainne Hurst: I think the industry has come a long way in the regulated sector in this space, both adhering to the codes but also with the voluntary measures that we have introduced. We have voluntarily what we call an IGRG code, which makes sure that 20% of operators’ messages have to be safe for gambling ones. We also have a sports sponsorship code with all the sporting competitions and leagues, which looks at re-investing sponsorship money into the grass-roots clubs and at running educational programmes for the coaches, for the players, for the medics, et cetera who are part of that team. I think we have seen from Sky Bet that 8,000 people have been trained in safe gambling educational awareness courses as a result of that. I think the industry has come a long way, both from a regulatory perspective but also from a voluntary perspective. We are always open to discussions with the Government and the Gambling Commission about how we can continue to improve that. I was at a meeting with DCMS yesterday talking about these issues. We are always happy to engage in that process, but we need to make sure that the evidence base is there for that. I do not know if Dan or Vaughan would like to come in.
Dan Waugh: One observation is that I think, generally speaking, that most people I know, including me, have no great appetite for advertising in general. It is not something we seek out and demand more of, so I suspect that if you ask any people about the desirability to see more advertising or not that they will express negative views. Maybe there is greater antipathy towards gambling advertising—that is plausible—but you have to put it in the context of general attitudes towards advertising.
On the research on links between advertising and gambling harms, I think one area where it is fairly widely accepted is that if people are trying to cut down their gambling and trying to abstain from gambling then exposure to gambling ads can be problematic. The same would be for people who are trying to cut down on their alcohol consumption or eating, or who have problems with finance seeing credit card adverts and things like that. I do not think that is a reason to prohibit but it is a challenge for us and we should address ourselves intelligently to that.
We live in an age of technical wonder, and the technology exists—and has existed for some time—to screen out gambling adverts using adtech technology. To your question about what more could be done, more could be done using adtech that allows people who are vulnerable to reduce the amount of advertising they are exposed to. You cannot eliminate it because advertising is everywhere, but the technology certainly exists to minimise it on broadcast media and on the internet. Also, if you are a concerned parent and you do not want your children seeing betting adverts then the technology exists to really reduce the amount that your children will see. Rather than getting locked into these prohibit/allow debates, we should be thinking about smart interventions that use the technological capabilities that now exist.
Lord Filkin: The implication of what you said was that it would be better if the Gambling Commission alone was fully responsible for the regulation of gambling advertising, rather than it being split, as it is currently, between several bodies.
Dan Waugh: That is not what I intended to convey; I was simply making a point about the technology.
Lord Filkin: Let me ask you if you agree with that.
Dan Waugh: No. We have a regulatory body for advertising; it would seem strange to hive off this one sector from it and give it to a regulator that is already struggling, that has already burned through its financial reserves and is already struggling for resource. It is fine to ask these questions—where should the responsibility sit?—but I am not convinced personally that that would solve anything. The Gambling Commission is not an expert on advertising.
The Chair: We need to move on.
Q14 Lord Smith of Hindhead: For the benefit of committee members who are not gambling experts, could you tell the committee what are the four “E”s of gambling problems? You are not familiar with that term? It is very well used. It is escape, esteem, excess and excitement. They are the four “E”s that gambling gives people that can often lead to gambling problems. I am surprised you do not know them, but anyway, to my question. The special inquiry committee, which I served on, noted that those who are vulnerable to advertising for gambling products are especially susceptible to messaging which seems to be addressed to them personally. In May last year, the Gambling Commission implemented an opt-in system for direct marketing on a per channel and per product basis. Now that that opt-in requirement for direct marketing has been in place for just over a year, could you tell the Committee whether, in your opinion, it has done enough to reduce gambling-related harm, and would you make any suggestions for the reform of this regime?
Grainne Hurst: Thank you for the question. I was not aware of the four “E”s, so thank you also for educating me on that. In terms of direct marketing, as you said, the changes came into force a year ago, so customers have to now opt in on both channel and product. That is being evaluated as part of the Gambling Commission’s review of the 62 measures that were in the White Paper. We are expecting that in the coming months, possibly by the end of this year.
Vaughan Lewis: If I may add an operator perspective on the role of direct marketing, we heard from Mr Prochaska earlier about the skew in spend. A relatively small number of consumers spend the majority of revenue. That reflects a couple of dynamics. There are a huge number of very infrequent casual customers who just like a bet on the Grand National, on Royal Ascot today, or on the England match tonight—that kind of thing. Then, there are more frequent gamblers, like me, who dedicate a portion of their time and spend to gambling because it is one of their hobbies. For me, it is my main hobby.
The threshold to qualify for being that 5% who contribute the most to gambling is around £100 a month. We can debate whether that is a significant harm level, but that is just factually where it is to qualify for that group. What I would not agree with from the comments earlier is the characterisation around gambling companies looking to constantly replenish their customer base and extinguish their funds. This is simply not how businesses operate.
Lord Smith of Hindhead: Yes, but it is a churn, is it not? It is how businesses operate.
Vaughan Lewis: It is not how businesses operate.
Lord Smith of Hindhead: It is how all businesses operate. Every business operates by creating a churn. That is why they advertise, because they need to have more people buying the product they sell. That is the market.
Vaughan Lewis: With respect, if brands were taking that approach to their business and treating their customers as if they are a resource to be extinguished and then replaced, I do not think they would last 90 years. William Hill is a brand that has recently celebrated its 90th birthday. The key goal for people within these businesses is to deeply understand their customers, understand what products they like, what they enjoy and then market directly to them around those. Huge investment goes in specifically looking at markers of harm and understanding where risk might be emerging and then taking intervention action on the back of those. Direct marketing has a positive role in harm prevention, as well as providing an improved experience to customers of that brand.
Q15 Baroness Alexander of Cleveden: I want to turn our attention to advertising in sport, notably in football. Obviously, if you start in the period 2020, there has been evidence to suggest that the self-regulating measures of the whistle-to-whistle ban and, since 2024, the code of conduct have broadly been ineffective in reducing overall exposure to gambling advertisements around sporting events. Given that, what would be the benefits and the risks of implementing the former Select Committee’s proposal to ban gambling advertising on sports kits or in and near sports venues, with the exception of horseracing and greyhound racing? This is really looking at whether the voluntary measures and their impact have reduced the overall exposure. It appears not. Should we revisit the ban on sport kits or in and around sports venues?
Grainne Hurst: Thank you for your question. I am actually incredibly proud of the whistle-to-whistle ban and its effectiveness. If we look at the statistics, we have seen that, as a result of the introduction of the whistle-to-whistle ban, children’s exposure to gambling is down 97%, which is a positive for all of us.
Baroness Alexander of Cleveden: So, 97% when, where and in what context? What is the definition of “down” for those children? Presumably they are watching before or after. Is that in the game? What is the 97%?
Grainne Hurst: The whistle-to-whistle ban is adverts five minutes before and five minutes after live sport before the 9 pm watershed. It is a reduction in children seeing those adverts in those time periods.
Baroness Alexander of Cleveden: The question here is not about that; it is about the overall exposure to gambling advertisements around sporting events and whether, given the pattern of exposure, that needs to be tackled, as the Select Committee suggested.
Grainne Hurst: I am happy to cover that. I fully appreciate the strength of feeling and concern on it. I am a mum of two boys myself and we watch sport together and enjoy it. They probably know a lot more about gambling because of the role that I do than most nine year-olds and six year-olds.
If we look at the operational reality and the stats, we see a positive: there has been a 63% reduction in betting brands’ visibility on shirts from the 2019-20 season to the previous season. There has also been a 15% decrease in visibility around what we call LEDs on the perimeters. Again, that is a positive development as a result of the voluntary measures that the industry has taken and the regulatory codes.
One of the positives, which sometimes gets forgotten or is not necessarily talked about, is the positive power of advertising and sponsorship. To give one very quick example, prostate cancer is a cause that is very close to my heart, for several reasons. Over the last few years, we have seen that the Paddy Power World Darts Championship and Prostate Cancer UK partnership has been used to increase awareness of Prostate Cancer UK’s online self-checker. Over 300,000 men who would normally be a difficult target group to reach have gone on to check their levels and to get that looked at. They have raised £2 million for charity as a result of doing that and they have been a big part of the TRANSFORM project, which, as we saw a few weeks ago, was launched as part of the Government. There is a broader role for advertising and sponsorship.
Would we like to see a reduction in the number of logos and licences from the illegal market in sport? Absolutely, because our position is that if you do not have a UK gambling licence, you should not be able to advertise.
Vaughan Lewis: I understand the committee’s frustration with us talking about the black market, but it is a major trade-off that needs to be considered. Taking sponsorship, Stake sponsors a Premier League team, it previously sponsored a Formula 1 team and, in jurisdictions where gambling advertising is banned, it flipped the branding of Stake to Kick, which is its partner streaming brand, a streaming platform a lot like YouTube which is more specifically for younger demographics. I encourage the committee to look at Kick.com. What you will see on there, the second most watched category, is influencers targeting young people, recording themselves playing slot machines at very high spin speeds at very high stakes. That is the dynamic we are dealing with here. There is a question of enforceability. If we look at Italy, where there is a total ban on gambling advertising, there are still three Serie A teams that are sponsored by gambling companies.
Baroness Alexander of Cleveden: Finally, and if Dan wants to add anything, there is common ground that there has been an overall increase in exposure. There is an agreement that there has been a front-of-shirt reduction. In the last evidence session, we heard about whether that was significant, because it might just be 9% of total exposure. We have also heard about the positive power of partnership advertising. Is there anything else you would like to add?
Dan Waugh: I think 9% is still a meaningful reduction; I do not know why that is trivialised.
Baroness Alexander of Cleveden: It is about whether the industry has any comment on the overall exposure around sporting events.
Dan Waugh: I have not been a member of the industry for 12 years, I think, but I can comment on the evidence I see. During the period from 2011 to about 2024, you saw quite a big increase in front-of-shirt sponsorship for gambling brands, both in the Premier League and the Championship. Over the same period, if we are concerned about children and normalisation, the rate of past week gambling by children collapsed. It declined by about two-thirds over that period. We know from research that children–and I do not blame them for this—often take fairly negative views about the gambling industry from the way it is advertised. Particularly in the past, industry standards of advertising have not been great.
When you come to suggest that we need to do more, particularly if it is some sort of ban, which is a form of censorship, we have to be very careful that we are clear about why it is justified and what the problem we are trying to solve is here. As I say, we should also look at whether there are more intelligent solutions that address the problem we are concerned about in a way that does not result in blanket measures being imposed that may have negative consequences far beyond you.
The Chair: Lord Foster might have a supplementary here, but I ask him also to ask his next question.
Lord Foster of Bath: First, I would like to confirm what I think you said, just to check that my hearing is right. Did you say, in relation to the voluntary measures, that it was positive that they had led to reduced advertising?
Grainne Hurst: The point I was making is that it is positive that children’s exposure has been reduced as a result of the whistle-to-whistle ban.
Lord Foster of Bath: So you accept that reducing advertising is a good thing?
Grainne Hurst: If we are talking about children’s exposure then we at the BGC absolutely do not want to be targeting children with particular ads.
Q16 Lord Foster of Bath: On that issue, you will not have seen—and I apologise for using something you have not seen—some very recent research evidence showing that some one-third of BGC members, in over 220,000 ads, are actually breaching your own rules in terms of minimising access to under-25s. While I accept that you have not seen that research, do you as a body look at whether your members comply with your rules? Please tell us a bit about that. It is important, given that we also heard evidence from Mr Prochaska that some of your members were supplying parts of the black market. You might want to comment on that.
The Chair: Are you also asking your question?
Lord Foster of Bath: Yes, that is it.
Grainne Hurst: As you say, I have not seen that information, but obviously I am happy to look at it. The BGC self-regulatory code is audited on a regular basis. We have found that, because BGC members are very competitive, they will report breaches to the BGC if they see that one of their competitors is doing something that they should not. I am pleased to say that that has not happened in the time that the code has been established. What we have had is one non-BGC member referred to us for potentially breaching the code but, unfortunately, we do not have remit over that.
Lord Foster of Bath: Just so I am clear, you rely on someone reporting somebody else to you. You as the “standards body” do not carry out any investigations yourselves into the behaviour of your members in relation to your code, particularly in respect of not getting involved in the black market.
Grainne Hurst: It is both. That is not a fair characterisation, but I probably did not finish my point. We rely on people telling us that someone has been in breach but we also provide audits of the code, which we share with the Gambling Commission and DCMS on an annual basis, normally in the summer months. I hope that has clarified the point.
Lord Foster of Bath: That is helpful. Presumably we will be able to get access to that.
Grainne Hurst: On your second point about what we heard in the previous session, I want to make it crystal clear that any accusation that our members do not take black-market activity seriously is completely false. We have spoken to all of the members involved, who have categorically denied that they are supplying the black market. I should say that I have not seen the evidence. Despite our regularly asking for the report that was referenced in the previous session, it has not been provided to us until it was published this morning; obviously, we will go through it in more detail now that we have it. However, I think it shows the sophistication of the criminality of the illegal market in effectively cloning our BGC members’ games and making them look legitimate by stealing their IP. That is at the crux of this issue. If any member of the BGC were found to be supplying the black market, not only would they not be eligible for BGC membership but they would lose their Gambling Commission licence.
Lord Foster of Bath: In relation to the debate we have had—everyone shares your concern about the black market, probably; it is universal, and we must do more—an argument that has been used is that if we somehow clamp down on advertising of the licensed market then that will lead to a burgeoning in the black market. Do you agree with that assessment?
Grainne Hurst: I think we have already seen that. Look at the growth of the illegal market already as a result of tax and regulatory restrictions, though not necessarily advertising restrictions. We have estimates that £17 billion will be staked in the online illegal market this year alone, and that will double in two years.
On your point about advertising, we know that in a period this year when the regulated industry will be voluntarily reducing our spend and volume on ads by about 10%, the illegal market is going to increase its spend by 32%. If the Government and the Committee would like to reduce the volume of advertising, we could effectively do that and cut it by half overnight if we were to tackle the illegal market.
Vaughan Lewis: This does not have to be a theoretical question. We can look at evidence across a wide range of international markets that have implemented restrictions on advertising, and the evidence from those international markets is clear that the tighter the restrictions are, the greater the leakage to the black market, so yes, it is a straight trade-off.
The Chair: Thank you all for coming. We will take a five-minute break.
