Questions
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 it’s taken some time for the industry to achieve a standard that meets the objectives (down to the complexities of a technically fragmented supply chain more than apathy) but we believe these aims are now being upheld. By way of example into each objective:
Fair and Open Provisions
Since the joint investigation from the Competitions and Marketing Authority (“CMA”) and the Gambling Commission (“GBGC”) around unfair terms and provisions, all customer Terms and Conditions, including those around bonuses and wagering have become more transparent and understandable to customers.
In addition, the GBGC and the Advertising Standards Agency (“ASA”) work as effective ‘checks and balances’ stakeholders ensuring the advertised provisions for gaming are fair and open. The ASA has investigated specific examples and issued rulings where Terms and Conditions have been unclear or significant terms have not been presented as part of an advert or promotion. This has helped to ensure that the industry continues to improve. Specifically, the industry has simplified explanations around the use of bonus funds and applicable wagering requirements to make them clearer and more prominent.
The introduction of the General Data Protection Regulations (“GDPR”) has also increased the level of transparency regarding Data Subject’s rights and how their information is stored, processed and used by operators within the gambling industry.
The frequency of such rulings has been reducing steadily over time, showing an increase in the industry’s compliance with terms.
Focusing on the gambling product itself, the online industry has moved towards more visible and readily available tools to assist all customers, especially those who could be at risk of harm, to control and restrict their own gambling. In recent years, companies have developed standalone portals for such information and these tools are becoming more prominent and, in some cases, a required part of the customer journey.
The continuing improvements to the licence conditions and codes of practice (“LCCP”), as further developed by the GBGC, mean that all aspects of the supply chain are continually improving; gambling software developers and game suppliers are also required to constantly monitor their games to ensure that they are operating within normal and expected parameters, so as to protect customers when they are not. All games are also required to carry with them very clear pay tables, return to player information and game rules so customers can be as informed as possible before wagering.
Protect children and other vulnerable persons
Industry: The GBGC have recently updated their requirements for Age and Identity Verification of remote gambling customers, which now prevents anyone participating in gambling before they have been verified as being over 18.
The ASA also enforces its codes with regards to:
The industry has also undertaken a number of initiatives to educate users about the harms of gambling, through funding organisations like GamCare, the Senet Group, YGAM and other charities.
Prevent Gambling being a source of Crime and Disorder
All Gambling companies licensed in Great Britain fall under national Anti-Money Laundering legislation and are regulated by a statutory AML Supervisor. They are required to not only follow the Regulations, but the guidance that is issued by the GBGC.
Gambling Companies are also required under the legislation to assist the Sports Betting Integrity Unit (“SBIU” - Part of the GBGC) as well as all Sports Governing Bodies (“SGBs”) listed in Schedule 3[1] of the Act in investigations relating to potential match fixing or breaches of SGB rules.
Further to this, the industry is improving its standards of affordability checks on customers that pose a higher risk for Money Laundering or markers of harm. These sorts of checks go well beyond other sectors when it comes to protecting the customer and are akin to the sort of credit controls put in place by financial institutions when offering mortgage and debenture products.
BetVictor is a member of the International Betting Integrity Association (“IBIA”)[2] who work with most major gambling companies to identify concerning betting behaviour that might be associated with Match Fixing, analyse its prevalence across the industry and, where necessary, raise a report to the relevant SGB.
There are many other industry groups that look to supplement the legislation and the LCCP and whilst they are not mandatory (such as IBIA, GamShield, RGA, and CIFAS) they are further pushing the industry forward and, for those that are members, helping improve fraud detection and prevention.
In summary we believe the standards as mandated by the Gambling Act and the GBGC in the GB online gambling sector are stronger than all other publicly perceived ‘vice’ sectors, and stronger than most other consumer entertainment sectors or luxury consumer product sectors. There are no such rules and regulations stopping consumers from taking high interest credit facilities to buy luxury items or luxury consumer goods beyond the consumers’ affordability, likewise no obligations or systems enforced on retailers to ensure customers are aware of how much alcohol or tobacco is being purchased and consumed. Even looking at digital entertainment, today children and vulnerable persons can spend £’000 on virtual currency without any oversight or obligation on curbing such spending or spend excessive hours on addictive social media platforms being exposed to potentially damaging content. We strongly believe the licensing objectives are being upheld and, in many cases, more upstanding licensees are going above and beyond.
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?
There are a few areas that we consider pose a risk to the objectives of the GBGC, but are currently not covered in the legislation:
The risk that these technologies pose is mostly regarding the protection of children and other vulnerable people. While the industry seeks to exclude children from gambling in all cases, they are still being exposed to the concepts of gambling through other mediums, such as social gaming, loot boxes and the advertising of softer gambling products.
We believe the government should take a harder line on virtual currency gambling, loot boxes, and pay to play digital entertainment as they currently do not have any standards or social responsibility requirements.
Bingo is traditionally perceived as a softer form of gambling, and as such is still permitted to advertise before the watershed and also as advertorials in magazines. We are concerned that this also provides an introduction to gambling for young people, even if the age restrictions for play still apply. This is an overtly visual form of gambling, that includes casino games and we therefore believe that pre-watershed advertising restrictions should be expanded to encompass Bingo.
We have included our concerns around the national lottery under question 16.
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?
The GBGC has undertaken a large body of work to enforce its Licencing Conditions by reviewing a number of licence holders, most often around the areas of Anti-Money Laundering and Social Responsibility.
Results of these reviews have caused Gambling Companies to refund to customers where their procedures have failed to uphold the licencing objectives.
So far in 2019, the Gambling Commission has issued 9 enforcement actions that have resulted in a total of £13.5million in fines, and the revocation of one operating licence.
The GBGC are fair in their assessments and use an effective system to enforce their licensing conditions. The regulations in Great Britain are often seen as a benchmark to other jurisdictions looking to introduce or improve their own regulatory framework. A licence in GB is regarded as a mark of excellence when applying for a licence in other jurisdictions.
There are areas of concerns for offshore operators, predominantly where such operators have no substantive presence within a fellow licensing EEA member state, or where offshore operators advertise offshore gambling facilities through sponsorship deals with GB institutions. The most obvious concern is non-GB (or even non-EEA) betting companies taking English Premier League sponsorship. This sort of activity brings the sector into disrepute where those operators sit outside the reach of the GBGC in how they offer gambling services; and unfairly disadvantages reputable licensed GB operators through unfair sponsorship and advertising pricing. In such circumstances, the football clubs themselves are advertising unlicensed gambling services to GB customers yet all parties fall into a grey area of the legislation.
4. Should gambling operators have a legal duty of care to their customers?
As stated in our answer to question 1, we believe the standards and regulations mandated by the GBGC set a high burden already with notable fines and penalties being enforced against breaches by licensees. We do not believe a legal duty of care should exist between a licensed operator and a customer as ultimately gambling is an entertainment/hobby product that is not used by the majority of the population (in the same way that the general public will need to access medical services, or obtain gainful employment or even consume food and drink in public places).
Gambling is a discretionary pastime that is already well controlled by the GBGC through the LCCPs at a time when the industry is genuinely changing and improving. Furthermore a lot of the regulations particularly around AML and safer gambling are subjectively applied for each and every customer and it would be nearly impossible to introduce a standard duty of care framework that could be applied to every case to clearly identify the legal obligation and standards on the licensee and how they can be navigated by the licensee. Introducing a legal standard may also create a ‘risk free’ betting environment where more customers who wouldn’t otherwise trying gambling, do so on the illusion that no matter what happens, the operator has a legal duty to protect the customer come what may. Again, this is very different to the medical profession or an employment scenario where there is clear contract for services, where-as fulfilment of a contract in the gambling space between a licensee and a customer is subject to a variety of elements, random luck and entropy being two.
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.
Not answered.
6. What are the social and economic benefits of gambling? How can they be measured and assessed?
Gambling provides the following economic benefits to society:
Social benefits of gambling are harder to measure, but there has been literature and research into such topics, which have raised the following points:
As a practical example and in addition to the above, BetVictor furthermore has established a social responsibility program, which:
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?
No. The fact that 5 major operators have agreed to commit extra funds over the next five years demonstrates that the industry understands that the levy currently is not delivering sufficient revenues to fund the necessary research, education and treatment.
The Voluntary Levy is not effective enough. The point above helps demonstrates this. There is also currently not sufficient transparency with regard contributions (there is simply an annual published list with no benchmarking) and therefore an unlevel playing field as some companies fulfil or over-pay against the minimum requirement while others do not meet it.
The GBGC has updated its licensing conditions to require gambling companies to only provide their donations to charities that are deemed by them to be fulfilling a prescribed list of criteria regarding the use of the funding. This will come into effect in January 2020.
Donations should be made part of the quarterly Point of Consumption Tax collection performed by HMRC. Every single operator must account for their UK revenues and pay the tax due. The industry and regulator should agree a levy percentage as part of that process, get HMRC to collect it and pass it on.
A recent consultation[7] on the matter indicated that the gambling industry as a whole recommended to the GBGC that a body be set up to receive and allocate all donations to aid in attaining the objectives set out by the Advisory Board for Safer Gambling (“ABSG”) in its 3-year National Strategy.
It should also be noted that Gambling Companies undertake their own research in the field of problem gambling, investing significant time and resources outside of funds donated through the levy.
We do however agree that a more strategic and focused approach to the allocation and use of the funds raised by the levy would allow for a more efficient and effective use.
The GBGC has already sought information from the industry and other respondents regarding monitoring the effectiveness of the use of funds, research, tools and education[8].
Research
8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?
Not answered.
9. If, as the Responsible Gambling Strategy Board (RGSB)(1 Now called the Advisory Board for Safer Gambling) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?
Data should be collected from across the industry to allow for further statistical analysis.
There is also no analysis of customers that hold multiple gambling accounts with different operators, because we are unable to identify them or share information about them in the current environment. A data sharing arrangement through an independent party to conduct research should be undertaken.
Further research should be done amongst children and young people, as this will provide the most accurate information. Researchers should engage with A-Level, Vocational and University aged students (16-21) to understand how prevalent gambling is within those age groups, the levels of exposure and the propensity to suffer gambling related harm.
Research should also include information about what makes people start gambling. Where is the information about gambling obtained from and how are they encouraged to participate?
Education
10. Is enough being done to provide effective public education about gambling? If not, what more should be done?
There are already a number of companies that are offering educational training around the risks of gambling and gambling related harm:
Paul Buchanan EPIC
GAMCare Youth Voice Program
Wise Up
BetNoMore
Free online Training
YGAM
However, because there is no national standard, the quality of the training and resources varies among the different companies. The targets also vary, some focusing on the young people, others on the teachers and carers.
As with Drug and Alcohol awareness, Gambling Addiction should be taught as part of the national curriculum which would standardise information delivered and ensure exposure to all young people.
The only other forms of public education are currently television adverts, the “When the Fun Stops, Stop” campaign and messages on gambling companies’ websites.
More could be done among higher risk groups, for example as part of betting integrity training within sporting organisations, with charities that work with vulnerable individuals.
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?
Not answered.
12. What steps should be taken better to understand any link between suicide and gambling?
We suggest:
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.” (p12) Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?
Since the derestriction of gambling advertising in 2007, the social experiment has already taken place.
In response to such behaviour and exposure, a number of regulations regarding the advertising of gambling have already been implemented:
Further to this, the ASA is more rigorously enforcing its guidance and regulations around gambling advertising, having released new guidance in April for Gambling Companies with regards to protecting children and young people[10].
Gambling and sport
14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?
This was mentioned in our answer to question 3, however we believe the risks are:
However, these risks can be mitigated using a number of different measures that are already employed by a number of gambling companies, for example:
The flip side being that the sponsorship funds can be directed into areas within the club that wouldn’t otherwise have enough financing such as grass roots academies, subsidised tickets, away team transport and so on, which in turn is in the best interest for financially disadvantaged communities who wouldn’t otherwise be able to access the sports clubs.
Gambling by young people and children
15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?
We have identified two major concerns:
Social gaming
Social games often mimic traditional casino style games, and currently do not have a restriction on who can view or play them. Children can become addicted to these games when playing for fun money, which in turn can be transferred to a real money casino once they come of age.
In-game purchases
Such purchases, which are not monitored from a gambling perspective, can also be considered to be a form of gambling, when considering Loot Boxes, or spinning wheels for prizes (even when there is no money in kind value for those items).
16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. (p2) Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?
Draw based games and instant games (scratch cards or digital instants) provide for large value wins and in the case of the latter, high frequency wins which can be addictive traits. There is an increased risk with more immediate games, such as scratch cards, and online instant wins, which technically behave the same as games on remote casino operators’ websites. We believe that if Camelot wish to offer scratch games they should be done in accordance with the LCCP which essentially means being made available for 18+ customers only.
17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)?
There is not yet enough information to suggest a full ban, but we do agree that more research needs to be done to see whether there is a correlation between children that play Category D Machines and those more likely to experience gambling related harm at a later stage in life. Certainly, on these games we also believe there should be more information about the impact of skill and the return to player calculation for luck-based games.
6 September 2019
[1] https://www.legislation.gov.uk/ukpga/2005/19/schedule/3
[3] https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/betting-gaming-duties/
[4] https://about.gambleaware.org/fundraising/201819-supporters/
[5] https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Statistics/Industry-statistics.aspx retrieved 26th August 2019
[6] https://www.statista.com/statistics/254513/value-of-jersey-kit-sponsorships-in-the-barclays-premier-league-by-club/ retrieved 26th August 2019
[7] https://www.gamblingcommission.gov.uk/PDF/consultations/ADR-CI-RET-ResponseDocument.pdf Section 5 - retrieved 26th August 2019
[8] https://www.gamblingcommission.gov.uk/PDF/Strategy-consultation-responses-document.pdf retrieved 26th August 2019
[9] http://igrg.org.uk/wp/wp-content/uploads/2019/01/Gambling-Industry-Code-for-Socially-Responsible-Advertising-5th-Edition.pdf
[10] https://www.asa.org.uk/resource/gambling-protecting-under-18s.html