Independent Betting Adjudication Service (IBAS) – Written evidence (GAM0048)
Introduction
IBAS was founded in 1998 to provide a service that could be used by consumers to raise grievances about the way that betting transactions were settled by bookmakers. Before the introduction of the 2005 Gambling Act the law provided no protection to bettors. Bookmakers decided individually whether to become registered with IBAS, which meant agreeing to be bound by the decisions of our adjudication panel.
Since 2015, licensed gambling operators in this country have been required by the Gambling Commission to offer Alternative Dispute Resolution (ADR) to their customers. IBAS is one of a number of ADR services which have been approved by the Gambling Commission. Recent estimates have indicated that IBAS receives and processes approximately 90% of complaints from gamblers across all sectors of gambling. We have received over 70,000 requests for adjudication since we were established and 6,386 in 2018.
Ombudsman Ambition
IBAS is a ‘Complaint Handler’ member of the Ombudsman Association of Great Britain and Ireland and it is our stated ambition to grow and evolve into an ‘Ombudsman’ member, becoming in the process the first Gambling Ombudsman. We believe that a single, gambling ombudsman would be in the best interests of clarity and consistency in decision making, as well as reducing potential confusion for consumers.
We also anticipate that having a single gambling ombudsman would provide a more solid platform for developing the most constructive working relationship with the Gambling Commission.
Current and Future Scope of ADR in Gambling
In October 2018 the Gambling Commission published new Standards and Guidance for ADR Providers (in the gambling sector).
Part of the purpose of the standards was to define which types of complaints should be considered by ADR providers and which should be referred to the Gambling Commission as a regulatory issue. Complaints falling into the latter category were typically those that related to an alleged breach of the Licence Conditions and Codes of Practice (LCCP) by a gambling operator.
The divide is the Standards and Guidance is logical; in essence, ADR providers examine ‘disputes’, complaints that individual bets, games, or offers have been handled incorrectly, mistakenly, unfairly or unreasonably. The Gambling Commission handles complaints that companies are acting in a less transaction-specific, more generally unfair manner or are breaking the law (e.g. by permitting gambling by those aged under 18).
The Gambling Commission also handles complaints that a company has breached the codes of conduct which govern ‘responsible gambling’, i.e. that a company has acted irresponsibly in allowing an individual to gamble, either at all, or to have gambled excessively and in a way that was likely to be unaffordable to the affected person over a period of time.
When someone contacts IBAS with a complaint that ought to be referred to the Gambling Commission we direct the complainant appropriately. It is not unusual though to receive further contact from the same person, typically because they become aware that the Gambling Commission’s investigation will not result in the receipt of a case or customer specific decision.
This has prompted calls for a change in how certain types of complaints and disputes are handled.
Complaints Relating to Potential Gambling Harms
Among the typical complaints that are referred to the Gambling Commission are:
- ‘A gambling operator allowed me to lose more than I could afford without conducting proper checks’
- ‘A gambling operator allowed me to gamble further after I had asked to be excluded from their websites/premises’
- ‘I received emails about special offers and promotions from a gambling company even after my self-exclusion agreement had been processed’
The majority of those whose complaints are of this type contact us because they believe they should be entitled to either a full or part refund of money they lost, or compensation for the distress and difficulty that they have been caused.
By way of balance, we also receive less frequent complaints along the lines of:
- ‘A gambling company’s “safety limits” unfairly prevent me from trying to win back money I have lost’
- ‘A gambling company has closed my account which they say is for my own good, but this should be my decision and not theirs’
Growth in Social Responsibility/Gambling Harms Complaints
When IBAS was launched and in its first 10 years, complaints of the nature outlined above were extremely infrequent, typically fewer than 10 such complaints each year.
Reporting Year | Social Responsibility Complaints Received |
2015/16 | 228 (3.5% of all complaints to IBAS) |
2016/17 | 322 (5.5%) |
2017/18 | 396 (7.6%) |
It is unclear whether the growth in complaints reflects a worsening of the problem, a development of the debate and understanding around gambling harms, or a combination of the two.
Complex and Challenging
Whichever agency handles complaints of this nature in the future, it is unlikely to be a straightforward task. Throughout the world, relatively few complaints of a gambling company accepting business irresponsibly have been heard in courts of a higher standing. As a result it would be difficult for ADR providers, which typically look to the High Courts for legal precedents/equivalents to reach decisions.
I would anticipate our adjudicators to immediately raise questions such as:
- How should the amount that a person can afford to lose be measured?
- To what extent should reassurances from a customer that they are in control of their gambling direct a company’s decision whether to continue to accept their business?
- Should gambling operators be expected to share data to measure the extent of an individuals total gambling losses?
- Is it unfair to refund the losses from a bet or series of bets which the counterparty to the bet would have had to honour those bets had they been successful? Does that create a consumer-biased unfairness or is that just the price of trading ‘irresponsibly’?
- How can an ADR provider practically assess a claim that a person’s gambling was affected by other factors such as mental illness?
- What level and timing of intervention from a gambling operator should we expect?
IBAS Responses to Questions in the Call For Evidence
The Gambling Act 2005
1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?
Our view is that the objectives of the Gambling Act are largely being upheld. We believe that IBAS has played a meaningful role in supporting the ‘fair and open’ objective, not simply in adjudicating on disputes but by providing feedback to operators and the Gambling Commission about persistent problems and potential solutions to avoid them resurfacing repeatedly.
However, we believe that despite considerable improvements in the services available to help people control their gambling, the increased access to gambling (particularly online) fuelled largely by developments in technology and mobile connectivity have undermined efforts to protect those most vulnerable to gambling addictions.
Additionally, we have observed that increased promotion of gambling, introduction of games that may be attractive to children and young people which include elements of gambling (often unregulated e.g. loot boxes) plus the sale of lottery tickets and scratch cards to those aged 16 and above have led to normalisation of gambling outside of licensed premises and without advisory communication warning of potential hazards there are limited protections.
2.What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?
Given that the development of technology continues, it would seem to us best to use regulations rather than legislation to manage change in the gambling sector.
In terms of gambling harm, we believe that all consumers of gambling products should be clearly signposted to both how they can complain and seek help. We support the current principle that all licensed businesses need to be registered with an Alternative Dispute Resolution service and promote access to that service on their website and in their customer-facing literature.
IBAS continues to give consideration to whether it would be appropriate for complaints relating to gambling harms to be considered by ADR providers, on the basis that clear rules and parameters are provided to the ADR providers about how those complaints should be assessed.
3.Is gambling well regulated, including the licensing regime for both on-and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?
On the question of whether gambling is well-regulated, our insight into consumer complaints and the responses received from gambling operators illustrates that regulation of gambling is far from straightforward. New products and technologies are developed at great speed and consumer expectations are high.
In the background, it must not be forgotten what lies at the heart of gambling – the hope to win money. In our view, it is inevitable that some people (sometimes operators but more frequently consumers) will push the boundaries of reasonable behaviour to seek financial gain.
Our relationship with the Gambling Commission is evolving and improving, but historically we have been frustrated by communication issues, including:
- The Commission has indicated that it wants more from ADR providers to help it tackle particular problems, but relatively little example-supported guidance has been provided by the Gambling Commission to ADR providers about what they consider to be acceptable and unacceptable practice.
- Some of our feedback has helped to influence the development of regulations but other persistent problems (e.g. that there is limited information to help betting shop customers establish whether they have placed late bets, or that there are no tools to prevent customers who have accepted bonus credit from placing bets which breach the terms of the bonuses) have been overlooked or ignored, sometimes missing the chance to reduce the impact of poor practice by early intervention.
- Investigations into problems identified by IBAS have generated little if any feedback to us so we do not know whether the Gambling Commission shared our concerns, acted on them or disagreed with them – this has included instances where gambling operators have advised us that they have objected to IBAS decisions, either on the basis that they are ‘wrong’ or on issues outside of our remit.
Our working relationship with the Gambling Commission has grown closer in the last two years, but we believe that it can be much more productive and that more use can be made of the substantial complaint case history and data capture that IBAS can draw upon.
4. Should gambling operators have a legal duty of care to their customers?
This point was considered carefully in the findings of Mr Justice Briggs in Calvert vs. William Hill Credit.
We believe that gambling operators have a limited duty of care that extends to offering their customers accessible and practical tools to control or limit their gambling and in ensuring as far as practically possible that they are applied successfully where requested. We also believe that gambling companies have a duty to monitor the gambling behaviour of their customers and to intervene when potentially problematic patterns of play are detected.
We recognise that there are practical difficulties on this latter point. Anecdotal evidence suggests that many people who are gambling do not want to be interrupted or ‘badgered’ with questions about the affordability of their betting. Arguably, this creates a potential competitive business advantage to companies which intervene less often. It may be that regulation needs to be substantially more prescriptive in order to satisfy all businesses operating in the market that acting responsibly is not simply driving potential profit to their competitors.
However, we also believe that customers are ultimately responsible for the decision to gamble. It is up to wider society and to government to determine what the safety net should be for people who have gambled, or been permitted to gamble, more money than they could reasonably have afforded to lose. It is up to regulators to intervene decisively when there is evidence that particular gambling operators are not taking seriously their responsibilities towards their customers.
Social and economic impact
5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.
We anticipate that others, including those with lived experience of gambling harms and organisations which help to support these people will be better placed to answer these questions than ourselves.
6. What are the social and economic benefits of gambling? How can they be measured and assessed?
Similarly, we believe that these points will be best answered by gambling operators, as well as those for whom gambling has proven to have a positive effect on their lives.
Levy
7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?
The voluntary levy has been effective to a certain extent but has allowed certain gambling companies to shirk responsibility and diverted some of the efforts and energy of GambleAware into fundraising which might be better used for distribution of funds. A statutory levy could raise more funds and could be distributed through the current GambleAware organisation. This would enable GambleAware to be seen as entirely independent of the gambling industry, reporting into the relevant government department. The income raised should be spent on prevention (research and education) and treatment as well as the new Ombudsman service, should one be introduced.
Education
10.Is enough being done to provide effective public education about gambling? If not, what more should be done?
We do receive a number of complaints which indicate a lack of understanding of gambling, particularly in relation to how probability can be applied to automated games (“I’ve lost x times and so now I should be due a win”) and on the meaning of statistics such as ‘Return to Player’ (RTP) percentages.
We are inclined to leave the specific recommendations about what can be done to those with more experience in education, though we suggest that more funds should be required to be spent by gambling companies to highlight the potential risks of gambling alongside the money they spend on promoting their gambling products.
Treatment
11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?
The move to provide NHS treatment centres across the UK is welcomed and a recognition of problem gambling as a major health issue which allows individuals to present at GPs and seek referral for treatment will be a major improvement on the current situation. The provision of residential treatment could be expanded to provide more bed spaces.
12. What steps should be taken better to understand any link between suicide and gambling?
Further research into the effect of gambling as a contributory factor to suicide as well as the collection of statistics recognising when gambling is a cause of ill health and criminal behaviour will increase understanding of the impact of gambling on individuals and wider society.
Advertising
13.The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?
19.Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries?
It seems anomalous that one of the most heavily promoted forms of gambling in the UK is available to customers aged 16. It also weakens the argument for the protection of young people from the harmful influences of gambling if we accept at the same time that it is acceptable for those aged 16 to gamble for substantial prizes in only certain forms.
6 September 2019