HM Government – Written evidence (GAM0090)

The Gambling Act 2005

The Gambling Commission’s remit, as set out in the Gambling Act 2005 (‘the 2005 Act’), is to permit gambling in so far as it is consistent with the licensing objectives: keeping gambling free from crime, keeping it fair and open and protecting children and vulnerable people from being harmed and exploited. These principles aim to ensure that the interest of society as a whole, customers, and those particularly vulnerable to harm, including children, are all protected and continue to be the focus of the Commission’s work. The Act, as well as establishing a range of criminal offences linked to gambling, gives the Commission broad and flexible powers to set and enforce licence conditions. 

The Gambling Commission and local authorities share responsibility for licensing land-based gambling. The 2005 Act provides scope for the Commission to set an overall direction at national level, while leaving local authorities in the lead locally, with appropriate support from the Commission. This includes issuing guidance to local authorities on how to apply the principles of the 2005 Act. Local authorities are responsible for licensing premises, but if there are serious failures or widespread vulnerabilities in an operator’s policies or procedures to prevent underage gambling, the Gambling Commission may take formal regulatory action in addition to any action being taken on premises licences.

The growth of the internet and mobile technology has changed many aspects of our lives. The Gambling Commission acts to ensure its regulation keeps pace with technological change and responds to changes in the market. A major development to our regulatory system was made in 2014, with the Gambling (Licensing and Advertising) Act. The 2014 Act provided for a switch from a ‘point of sale’ to ‘point of consumption’ model; meaning that any operator providing gambling services to people in Britain, including offshore online operators, must be licensed by the Commission and comply with its Licence Conditions and Codes of Practice (LCCP). Great Britain was one of the first jurisdictions to bring all online gambling within the remit of its gambling regulator and our regulatory system is still considered as a model by many countries, with the Commission receiving many requests for advice from overseas.

The Commission recently announced it will be strengthening requirements for operators to interact with customers who may be at risk of harm, and it has already taken action to tighten rules around identity and age verification, which came into force in May 2019. Online also offers an opportunity for strong protections. All online gambling is account-based and the accessibility of data can help operators and the regulator to understand customers, detect vulnerabilities and intervene. Additionally, for people in need of support, there are also digital tools that make it easier to take control, seek help or stop gambling. For example, the multi-operator online self-exclusion scheme GAMSTOP allows individuals to sign up to be self-excluded from all of the operators on the scheme simultaneously, which now covers over 90% of the market.  The Government is clear that the risk of harm should not be affected by whether individuals are gambling online or in land-based venues.

In recent years the Commission has taken an increasingly firm enforcement approach, with financial penalties rising from £1.7million in 2016/17 to £19.6m in 2018/19. It has a range of powers to enforce licence conditions, including fines and, where appropriate, suspending or revoking a licence, and bringing criminal prosecutions where relevant.  In many cases the Commission agrees a settlement with an operator who has admitted fault, payable to a charity for socially responsible purposes, including to address gambling related harm or in some way promote one or more of the licensing objectives. It can also impose individual as well as general conditions on a licence where necessary to protect the licensing objectives. 

In terms of a legal duty of care, gambling operators are already subject to a specific and extensive regulatory and licensing regime, deriving from the 2005 Act, which offers a range of protections and assurances to customers. As mentioned above, the Gambling Commission has a broad range of regulatory sanctions available, which include financial penalties, divestment of money voluntarily to victims and the power in section 336 of the Act to void bets and order repayment of any money paid in relation to a bet. In addition, the courts also recognise that a common law duty of care can arise as between a gambling operator and a particular customer or class of customers.

Social and economic impact

Information on problem gambling rates in Great Britain has been collected at intervals over the last twenty years, drawn from British Gambling Prevalence Surveys (BGPS) in 1999, 2007 and 2010 and questions about gambling participation and the experience of gambling problems in national health surveys since then.  The 2012, 2015 and 2016 Health Surveys for England and Scotland as well as the Problem Gambling Survey Wales 2015 and Wales Omnibus in 2016 have been used to assess rates of problem gambling.

The most recent Health Survey figures, based on the 2016 survey, estimate that 0.7% of the adult population, or approximately 340,000 individuals, are problem gamblers. Men were more likely to be problem gamblers than women. As problem gambling is relatively rare, confidence intervals are relatively broad, but we can be 95% confident that the actual figure is between 250,000 and 460,000 adults. Rates of problem gambling have been relatively stable at under 1% for many years. The 2015 Health Survey figures showed a problem gambling rate of 0.8%, but the fall between 2015 and 2016 is not statistically significant. 

The Health Surveys include two problem gambling screens, the Diagnostic and Statistical Manual of Mental Disorders IV (DSM-IV) and Problem Gambling Severity Index (PGSI), the results of which are combined to come up with the most robust figure. This mirrors the approach taken in the British Gambling Prevalence Surveys. They are large scale surveys: 14,765 people answered questions about gambling across the three nations in 2016.  For comparison, the BGPS had 9003 participants in 2007 and 7,756 in 2010. The Health Surveys, like the BGPS,  only include adults living in private households, so groups such as  people serving in the armed forces, students in halls of residence, people in care homes and prisoners are not included.

Problem gambling screens ask about a wide range of harms, including whether someone has risked a relationship, job or education opportunities because of gambling, has become restless or irritable when trying to stop gambling or committed a crime to finance gambling. However, this does not go as far as measuring the wider costs on society.

There have been attempts in recent years to generate information about the cost of problem gambling to wider society. The Institute of Public Policy Research’s Cards on the Table, commissioned by GambleAware in 2016, looked at excess fiscal cost associated with problem gamblers and estimated a range of £250m to £1.16bn per year. The report characterised the estimate as ‘the first step along the journey to understanding the total cost to government of problem gambling in Great Britain, and the starting point for future estimates as more data is collected’. This was largely due to the difficulty of isolating problem gambling from other comorbidities. Health Survey figures show a link between problem gambling and a range of other issues. Problem gambling prevalence was higher among those with probable mental ill health (2.2%) than those with no evidence of mental ill health (0.2%). Associations between problem gambling and different types of costs were also estimated from different data sources, meaning they were not directly comparable.

Work is underway to broaden understanding of the wider impact of gambling related harm.

The Advisory Board for Safer Gambling and the Gambling Commission published Measuring Gambling Related Harm: A Framework for Action in July 2018 setting out a framework for how gambling-related harm might be measured.  The report defined gambling-related harms as adverse impacts from gambling on the health and wellbeing of individuals, families, communities and society. These harms affect resources, relationships and health. The report proposed that the following areas could be used to measure the cost of gambling-related harms:

●        Loss of employment

●        Experience of bankruptcy and/or debt

●        Loss of housing/homelessness

●        Crime associated with gambling

●        Relationship breakdowns/problems

●        Health-related problems

●        Suicide and suicidality

The Gambling Commission has commissioned the London School of Economics and the Personal Social Services Research Unit to scope and recommend different methodologies for estimating the social costs of gambling-related harms.

Public Health England (PHE) has been commissioned by government to undertake a comprehensive independent evidence review on the public health harms of gambling (see under the section on Treatment).

Benefits

Gambling gives pleasure and enjoyment to many people as a leisure activity, although as with the costs of gambling, this is very hard to quantify. The 2016 Health Survey figures showed gambling participation was lower among participants with the lowest well-being scores (52%, compared with 58% of other participants), although 2.6% of those with the lowest well-being scores were classified as problem gamblers, compared to 0.5% of other respondents.                                                                                   

Last year, Gambling Commission’s participation figures show 46% of the population had gambled in the last four weeks, 32% if people who only played the National Lottery are excluded. A report by GambleAware in 2016 looking at potential issues in bingo reported 84% of surveyed bingo players stated that it was the social aspect which attracted them, with  58% reporting that it provided intellectual stimulation and 51% that it staved off boredom. Research conducted at Southampton University found bingo players were faster and more accurate than non-bingo players on tests measuring mental speed, the ability to scan for information, and memory.

There are also economic benefits: the gambling industry employs more than 106,000 people, last year it paid £3bn to the exchequer in gambling duties and the National Lottery gave £1.64bn for good causes. The trade association BACTA’s (British Amusement Catering Trade Association) response to the Lord’s Select Committee on Regenerating Seaside Towns and Communities argued that Family Entertainment Centres are vital to the economy of many seaside towns, generating £242 million in revenue and employing almost 5,000 people[1] It also said that Family Entertainment Centres play a considerable role in extending visits to coastal towns and in boosting local businesses reliant on tourism footfall (e.g. renovation of Weston-Super-Mare pier).

British racing contributes £3.5bn in GDP and supports rural communities, employing around 17,000 people and consistently draws huge crowds across the UK. Around 6 million people attend race meetings every year, with many millions more watching live racing on ITV. Horseracing is Britain’s second largest sport in terms of employment and revenues generated annually. It is also a significant soft power asset to the UK and is at the forefront of international horseracing.

Funding for Research, Education and Treatment

Most dedicated research, education and treatment for gambling addiction is currently commissioned and provided by the third sector, funded from industry donations.  Government does not determine the levels of contribution or direct how the voluntary funding donated by industry should be spent. The commissioning of services is currently governed by the arrangements set out in a Statement of Intent[2] between the Gambling Commission, its expert advisers (then the Responsible Gambling Strategy Board, RGSB, and now the Advisory Board for Safer Gambling, ABSG), and the charity GambleAware.

In addition, mental health services commissioned by the NHS and specialist substance misuse provision commissioned by local authorities are likely to be in contact with and treating individuals for whom gambling is an associated problem. Although numbers are not centrally recorded, in some cases this treatment for associated conditions may also help address the gambling problem and services may also screen and refer to specialised gambling treatment. GambleAware funds two specialist NHS clinics which treat the most severe and complex cases of gambling addiction and NHS England recently announced that it plans to create up to fourteen new clinics as part of its Long Term Plan.

The Gambling Commission requires licensed operators to make an annual financial donation to an organisation that contributes to research, prevention and education, or treatment. Most opt to give funding to the charity GambleAware who in turn suggest operators should give a sum equivalent to 0.1% of their gross gambling yield (GGY), the money taken in bets or stakes minus the money paid out in prizes or winnings. GambleAware’s Board of Trustees is wholly independent of the gambling industry and involves a range of experienced NHS and public health professionals.

The RGSB measured progress against previous two strategies, and found that despite positive developments, it had been slower than hoped, although due to the way the priorities were framed it was hard to determine when an objective had been met. In particular it highlighted the need for a better understanding of what works in harm prevention and treatment, and a focus on evaluation. GambleAware commissions independent evaluation for all the activities and services it commissions, including a large-scale evaluation of its treatment services. The National Institute for Health Research (NIHR) is also carrying out an evidence review to evaluate the effectiveness of interventions, which is due to report in spring 2020.  The Gambling Commission published a harm reduction strategy in April and will publish a plan for measuring progress.

In 2018 the RGSB estimated that the cost to GambleAware of delivering its part of the strategy would be £9.3m in 2017/18 and £9.5m in 2018/19, plus its administrative costs, or roughly £10 million[3]. GambleAware has recommended a voluntary donation of 0.1% of an operator’s GGY to cover this.  GambleAware raised £9.6 million of its £10 million target in 2018/19. However, it was fully funded for its £16 million budget, with voluntary donations being supplemented by payments from regulatory settlements made by operators following Gambling Commission enforcement action. We know operators also sometimes give to organisations other than GambleAware.

Government explored the arrangements for research, education and treatment, including funding, as part of the Review of Gaming Machines and Social Responsibility Measures. It noted that introducing a mandatory levy, as provided for in s.123 of the 2005 Act, would be one option if industry failed to provide the necessary funding.

The Review recognised that the system for delivering research, prevention and treatment needs to be sustainable and transparent, and that funds must be spent in the most effective and cost-effective way.  It set out a range of measures by the regulator, health bodies and third sector partners, to strengthen the current system. The Gambling Commission will make clear which bodies it considers appropriate recipients of donations and improve transparency, as part of its commitment to strengthen the voluntary system for funding support.

Work is underway to build evidence of treatment needs and effectiveness, and evidence reviews by PHE and the NIHR will report in spring 2020. GambleAware has commissioned research on treatment needs and gap analysis within the services it commissions, due to report later this year. In advance of that, the Gambling Commission has not yet costed its strategy, but five of the largest gambling operators have already agreed to increase financial support for safer gambling ten-fold, raising the current 0.1% voluntary contribution of their Gross Gambling Yield (GGY) from the UK over the next four years to 1% in 2023. This tenfold increase will reach a contribution of approximately £60 million from the five companies in 2023 and be maintained at that level in future years. As part of this funding commitment, the five companies will spend a cumulative £100 million on treatment over the next four years.

A statutory levy created by the current power in the 2005 Act would have to be paid to the Gambling Commission, the industry regulator, to provide financial assistance to projects related to gambling addiction, other forms of harm or addiction related to gambling, or any of the licensing objectives. It would not be the only way in which support could be funded from industry taxation; in fact hypothecated taxes are not a usual way of funding public services as they risk raising too much or too little for the purposes for which they are intended. Treatment services for alcohol and tobacco addiction are not funded in this way; products are taxed in recognition of their social costs and support services are funded from general taxation, according to need. The gambling industry currently pays £3 billion per year in gambling taxes.

Research

The Government funds public research through research councils and NIHR, which focuses on research in the health and social care field. Last year, NIHR put out a call for proposals for research into which interventions are most effective at reducing or preventing gambling-related harm. One was approved for funding: ‘Football Fans and Betting: piloting an intervention to reduce gambling involvement among male football fans’. NIHR is also carrying out a review of the effectiveness and cost-effectiveness of existing policies and interventions for reducing gambling-related harms.

The Gambling Commission produces its own reports into gambling participation, behaviour, awareness and attitudes in Great Britain, including a report on gambling and young people, some of which form official statistics.  Gambling prevalence and problem gambling are measured through the Health Surveys, which provide insights into the link to demographic characteristics and other issues like alcohol, mental health, and the rate of problem gambling by activity.  The Gambling Commission’s annual participation and attitudes report, based on quarterly phone surveys, includes how people gamble online.

GambleAware commissions research specific to gambling using funds made available through the voluntary system, and extensive governance processes are in place around commissioning of this research. Within the research programme, the Gambling Commission sets the research agenda and the research questions taking into account the advice from the ABSG. Priorities are set in the Research Strategy and then commissioned by GambleAware, which has no industry trustees.

The Gambling Commission published the most recent research programme in December 2018, setting out the priorities for research to be commissioned in the period from April 2017 to March 2019. This sets out six core areas, including building understanding of gambling-related harms, changes in gambling over time, and what works in treatment. It also defines overarching factors which should be considered when research is commissioned and delivered.

One of these themes is ensuring the perspectives of children and young people, including how they interact with gambling and experience harms, are taken into consideration when research is commissioned. Under the previous research strategy, GambleAware had a programme of research dedicated to improving understanding of gambling in relation to children and young people.

One of the research programme priorities is the change in gambling behaviour over time, with the aim of understanding the factors that cause people to start, continue and stop gambling at different points in their lives. NatCen has been commissioned to scope and recommend different methods and approaches to help to better understand changes in gambling behaviour over time, including the determinants of change. This will lead to the development of a brief for commissioning a longitudinal study by the Gambling Commission.

There are plans to increase accessibility of data. Work is underway to make both industry data and survey datasets more openly available to researchers and GambleAware has been scoping the development of a national data repository. 

Education

We believe that many of the factors that cause gambling addiction or are a consequence of gambling are already addressed in the school curriculum. The curriculum includes developing young people’s financial literacy through subjects such as Citizenship and mathematics. These subjects cover topics on the importance of personal budgeting, money management, credit and debt, and the need to understand financial risk. The DfE is also working with the Money and Pensions Service and HMT to explore ways in which we can continue to support financial education for young people.

The new subject of Health Education, which will be mandatory in all state-funded schools from September 2020, alongside Relationships Education (primary) and Relationships and Sex Education (secondary), will include teaching young people about the risks relating to gambling including the accumulation of debt. The statutory guidance was published June 2019. Through Health Education, pupils will also be taught how to recognise the early signs of mental wellbeing concerns, including common types of mental ill health (e.g. anxiety and depression).

We expect many schools will deliver the new subjects as part of their existing Personal, Social, Health and Economic (PSHE) education. Schools are free to cover issues around gambling in their PSHE provision. We know that many schools draw on the programmes and support available from subject associations and experts such as the PSHE Association. The PSHE Association’s non-statutory programme of study includes teaching about gambling including its psychological and financial impact. 

The DfE has also published in June 2019 “Teaching online safety in schools” - new non-statutory guidance which aims to support schools in teaching pupils how to stay safe online within new and existing school subjects, such as Relationships Education, Relationships and Sex Education, Health Education, Citizenship and Computing. The guidance addresses many of the online issues that are linked to gambling and online advertising e.g. teaching could include that age verification exists and why some sites require a user to verify their age, on sites such as online gambling sites.

The DfE is currently working with schools and teachers to develop a programme of support for the implementation of the new subjects. This will focus on tools that improve schools’ practice, such as an implementation guide, support for staff training and easy access to high-quality resources across the teaching requirements, including on gambling.

There are several activities underway by third-sector organisations to complement the statutory school-based education on gambling-related risks.

GambleAware’s delivery plan for 2018-20 includes plans to develop and promote a ‘knowledge hub’ of resources and guidance for teachers and those who work with young people, as well as working with agencies that support young people’s mental health and supporting parents to have conversations with children.

GambleAware is working with the PSHE Association to develop a programme of work to improve the delivery of school based preventative gambling education, including resources for schools to help ensure the safe and effective delivery of gambling harm education by those with lived experience, and resources for primary school aged children.

GambleAware has commissioned Fast Forward, a Scottish education charity,  to further develop its work promoting youth gambling education and prevention across Scotland. It will deliver a nationwide programme of training support for teachers and youth workers designed to reach young people in formal and informal education settings. This will be evaluated in 2020 and, depending on the outcome, there are plans to subsequently commission similar national programmes in Wales and in England.

Building a better understanding the attitudes and needs of young and particularly vulnerable people in relation to gambling will help GambleAware and others deliver targeted services and campaigns and better engage with these audiences. GambleAware has commissioned the Royal Society for Public Health (RSPH) to produce a report on gambling and young people, with a particular focus on how those aged 13-24 years understand gambling and what impact this can have on young people’s emotional health and wellbeing. Separately, a report on the views and attitudes towards gambling of children and young people (aged 9 - 24 years) from BAME communities is due to be published shortly.

Treatment

The NHS Long Term Plan includes a commitment to expand geographical coverage of NHS services for people with serious gambling problems, and work with partners to tackle the problem at source. As set out in the Long Term Plan Implementation Framework, NHS England and Improvement (NHSE/I) has allocated up to £1m for gambling harm services in 2019/20. This includes targeted funding to develop a hub and spoke model for problem gambling from 2019/20. This hub and spoke model will comprise of central clinics which have satellite clinics in neighbouring populations.

Specialist face-to-face NHS treatment for gambling addiction has only been available in London but the Long Term Plan is making treatment available across the country. Up to 15 NHS clinics are being opened by 2023/24.

There is a need for a comprehensive needs assessment/ prevalence survey to determine geographical coverage of need and prevalence of gambling related harm. This is essential if we are to base the expansion of NHS specialist treatment on need. Existing datasets do not provide comprehensive information at a local level.

The support available for gambling related harm must be considered as an integrated system wide approach. There should be clear clinical oversight and a robust referral / assessment process to ensure the right care is delivered at the right time.

The government is also committed to creating a better understanding of gambling-related harms so it can determine how best to prevent harms from occurring and support those negatively impacted by gambling-related harms. Public Health England (PHE) has been commissioned by government to undertake a comprehensive independent evidence review on the public health harms of gambling. This is the first ever review of evidence on the public health harms relating to gambling in England. A progress report outlining the scope of the PHE evidence review in more detail will be submitted to the committee in a separate submission.

In addition, the National Institute for Health Research (NIHR) has commissioned a complementary review of the effectiveness and cost-effectiveness of existing policies and interventions for reducing gambling-related harms. Both reviews will provide an independent review of the existing research in this area to establish what is known, where there are clear gaps in the evidence, and to provide the best available evidence to support national and local policy and decision making in addressing gambling-related harms.

The NIHR full evidence review is expected to report alongside the PHE review in March 2020.

We know that there may be wider lifestyle factors associated with gambling addiction that may link to poor mental health, and that gambling addiction can create a cycle of debt that can also have a significant impact on mental health and wellbeing. In extreme cases it may lead to thoughts of suicide. We also know that young men are often more susceptible to gambling addiction - yet men are far less likely to talk about mental health problems or reach out for help and support. The Government committed to addressing suicide risk and gambling in the latest progress report to the National Suicide Prevention Strategy and the Cross-Government Suicide Prevention Workplan, which was published in January 2019.

There is currently no reliable estimate of the number of suicides linked to gambling addiction or problem gambling in the UK. Addressing the gap in the evidence to increasing our understanding of the link between suicide and gambling is a cross-government priority. GambleAware has commissioned some preliminary research into gambling-related suicide, which was published in July 2019. The Department of Health and Social Care has invited GambleAware to return to the National Suicide Prevention Strategy Advisory Group to discuss the research findings and what further research may be needed in this area. We will continue to work with GambleAware and other stakeholders as data is developed. 

Gambling Advertising

Protections around gambling advertising were considered as part of the Gambling Review, alongside available evidence on the impact of advertising and levels of exposure. There were already strong protections in place; for example, the content and targeting of gambling advertising. The Review did not find evidence to suggest that gambling advertising was harmful as long as it complies with the rules, and concluded that the current evidence did not support legislative action. Instead, it set out a package of measures to strengthen existing protections and fill gaps in the evidence base.

Measures in the Review included tough new guidance on interpretation of the rules to protect vulnerable people and children and a multi-million pound safer gambling advertising campaign aimed at reducing risky and impulsive gambling. GambleAware commissioned major new research on advertising, part of which has already been published with the remainder due this year, and the Gambling Commission has brought in new rules meaning it can take tougher action if operators break the advertising rules.

Gambling operators who advertise in the UK must comply with the advertising codes. These are written by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) and enforced by the Advertising Standards Authority (ASA), the UK's independent regulator of advertising across all media.  The BCAP Code applies to all advertisements on radio and television services licensed by Ofcom. The CAP Code applies to non-broadcast advertisements and promotions, including online and social media. Adverts that breach the Codes have to be amended or withdrawn. If serious or repeated breaches occur, the ASA can refer advertisers to the Gambling Commission and broadcasters to Ofcom.

A wide range of provisions in the codes are designed to protect children and vulnerable adults from harm.  Adverts must not condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm, and advertisers must not play on people’s financial concerns, or encourage specific risk factors in problem gambling. As part of the package of measures in the Review, guidance on interpretation of the rules has been reviewed and strengthened twice over the past 18 months. In April 2018 stricter guidance was introduced around protecting people who might be vulnerable to harm, restricting adverts that create an inappropriate sense of urgency and preventing approaches that give an erroneous perception of the risk or the extent of a gambler’s control.

Gambling adverts must not be targeted at children, or appeal particularly to children or young people. In April this year, tighter new standards were brought in to protect children and young people. These build on existing rules preventing children being targeted by gambling advertising, and giving further examples of types of content, including certain types of animated characters, licensed characters and celebrities, that are likely to be of particular appeal to children and is therefore unacceptable.

The current evidence on gambling advertising shows a relatively small effect on problem gambling. This is largely based on a large study of evidence by Per Binde in 2014, which identified advertising as one factor among many which make up the environment, although it identified areas for further research. GambleAware commissioned research to assess the nature and impact of gambling marketing on children, young people and vulnerable groups. The first tranche, published in July, looked at tone, content and volume. The second, looking at impact, should be published in autumn.

Although figures show that television gambling advertising impacts for children and 16-24 year olds rose until 2013 and have declined each year since. Children saw on average 2.8 gambling adverts on TV per week in 2017. During a period when gambling has become more visible and advertising volumes have grown, under-age participation has been in a trend of decline since 2007.

We recognise that technology has changed the nature of advertising and marketing across most industries, including gambling, where the vast majority of marketing spend is now online. It is more difficult to monitor impressions online than impacts from TV adverts, but two recent studies using avatars found no evidence that children and young people are being deliberately targeted online.

Technology brings challenges, but also opportunities for greater protections. The ASA has made clear that operators advertising on social media platforms must use data to target adverts away from customers whose online behaviour implies they might be under 18. There have been several recent rulings where the ASA ordered operators to remove adverts that had not used interest-based data when developing targeting strategies.

Five operators recently agreed to take this further and where technology exists that can identify a user showing problem gambling behaviours, and then target gambling adverts away from that person, they will use it.

Gambling and Sport

There has long been a relationship between sports and betting. Early football pools were introduced in 1923 and grew in popularity from the 1960s as a popular and social aspect to betting on the outcome of matches. Sport remains outcome based, which makes it attractive to people to place a bet to predict that outcome. Betting on sport remains a popular pastime with the Gambling Commission’s recent industry statistics for “gambling participation in 2018: behaviour, awareness and attitudes” pointing to the fact that betting on sport (6.7%) is the third most popular activity for participants behind betting on the National Lottery draws (28%) and scratchcards and other lotteries (both 11%).

Despite the popularity of betting on sport, the evidence does not suggest that gambling has become an integral part of sport or that sporting fans are turning away from attending and enjoying live games in preference to betting solely on the sporting result. For example, live occupancy in English Premier League club stadiums stands at 96%. Similarly, the English Football League (EFL) recorded its highest cumulative attendances for almost 60 years in 2016-17, with more than 18 million fans attending matches. Live attendance and demand to see live sports such as cricket, rugby, tennis are similarly impressive: over 3 million people attended Rugby Union games in the 2017/2018 season and 1.6 million went to cricket matches in 2018.

Gambling companies are legitimate and visible sponsors of sport, and through this provide an important revenue stream for sport, but sponsorship is not the biggest contributor to sport financially with most sports reliant on revenues from broadcasters to grow the sport at all levels. In the case of the English Premier League, broadcasting rights are the most significant revenue stream for top-tier football clubs, and within that overseas markets are a significant contributor: 46% of all the League’s broadcasting revenue now comes from overseas.

Research from GambleAware found that betting companies have tended to advertise heavily around sport. There are protections around gambling advertising and sponsorship designed to ensure that an association with sport does not make gambling harmful to children. Both advertising and sponsorship arrangements must be socially responsible and must never be targeted at children. Operators’ logos must not appear on any commercial merchandising which is designed for children, including replica football shirts in children’s sizes.

In response to concerns over the amount of sports betting advertising that takes place on television, the gambling industry has also introduced a whistle to whistle ban which will prevent advertising from five minutes before a match or other daytime live sporting event begins to five minutes after it ends, substantially reducing the numbers of gambling adverts seen around sport.

Sponsorship rules are not enforced by the Advertising Standards Authority (ASA). However, advertising guidance prohibits the use of  sportspersons under age 25 in gambling adverts, and the ASA plans to engage with other regulators about concerns regarding the links between sport and gambling in the minds of children. The Gambling Act 2005 includes sponsorship in its definition of advertising and the Gambling Commission requires operators to be socially responsible in their sponsorship arrangements as they are in advertising.

A major safer gambling advertising campaign, Bet Regret, was launched in February. The first phase of the campaign is targeted at young men aged 16-34 who gamble regularly on sport, mainly online. The campaign is funded by industry as part of the commitments made in the Gambling Review last year. Development has been led by GambleAware, with expert advice from academics and Public Health England.

The Gambling Commission’s Sports Betting Integrity Unit works closely with the betting industry and with sports governing bodies to understand potential threats and help protect the integrity of sport and betting.

Young People and Children

The Gambling Review looked at the impact of gambling on children in a number of aspects, including the impact of category D gaming machines, age verification for online gambling and the impact of advertising (as outlined above).

As a consequence, in May this year the Gambling Commission tightened age and identity verification requirements online. Under the new rules, operators must verify the age and identity of a customer before they are able to deposit money and gamble. The change also means that age must be verified before free-to-play demo games can be accessed on operators’ websites. The decision was also taken not to raise stake and prize limits on category D machines without further evidence of the impact on children and proposals on how to strengthen already existing protections.

The Gambling Commission has a statutory licensing objective to protect children. Operators offering gambling services to people in Great Britain must have a licence from the Gambling Commission and must have effective policies and procedures designed to prevent underage gambling. Where there is a failure to prevent underage gambling, the Gambling Commission has a range of powers to act, including regulatory and/or criminal action.

For the most part, commercial gambling in Great Britain is legal only for those aged 18 and over. The exceptions are 16 year olds being permitted to legally purchase National Lottery, including scratchcards, society lottery products, and bet in football pools, and young people of any age playing category D games, which include fruit machines as well as pushers and cranes.

The RGSB provided advice to the Gambling Commission on children, young people and gambling last year[4]. It set out principles that should be applied in order to keep children safe, and recommended actions by different bodies to achieve this. The first principle was that commercial gambling should be regarded primarily as an activity for adults, which included looking at whether it was appropriate that children could access gambling activities legally under 18 years old.

The paper found that the balance of argument did not support a recommendation that Category D machines should be restricted to use by adults, but it did stress that operators need to make sure customers are not harmed, even with the small stakes and prizes involved.

In response[5], the Gambling Commission committed to working with industry to explore what more they can do to improve player protection standards, particularly in areas of the industry where there are opportunities for children to gamble, like the arcade sector and the National Lottery.

Since then, BACTA have responded to concerns that children are more vulnerable to harm from complex category D machines (slots) and are currently trialing age restrictions, with a view to making them part of their Code of Conduct later this year.

The government is also considering the framework for the National Lottery and has launched a 12 week consultation on the minimum age for playing National Lottery games. The consultation considers whether 16 is still an appropriate minimum age for playing National Lottery games ahead of the competition to run the 4th National Lottery licence.

There are three options presented in the consultation: to retain the minimum age of 16 for all National Lottery games; to raise the minimum age to 18 for National Lottery instant win games (i.e. scratchcards and online instant win games); and to raise the minimum age to 18 for all National Lottery games.

The government wish to adopt a proportionate, precautionary approach with a view to protect 16 and 17 year olds from possible or future harm. Our initial position, based on the evidence examined in the consultation, is to raise the minimum age to 18 for instant win games (scratchcards and online instant win games) and maintain the 16 limit for draw-based games, but we welcome views on this approach in the consultation.’

The Gambling Commission is also alive to emerging risks, especially around any crossover between video games and gambling. In 2016, they published a position paper on virtual currencies, esports and social casino gaming.[6] In response to the advice from RGSB, the Commission committed to continuing to make progress in this area and to work with international regulators to tackle common risks.

In September 2018, the Gambling Commission, along with 15 other regulators from Europe and the USA signed a declaration which outlined common concerns around gaming and gambling. The regulators agreed to work together to monitor the characteristics of video games and social gaming, and to raise parental and consumer awareness.

The Gambling Commission’s Young and Gambling Report 2018 found that 31% of 11-16 year olds surveyed had opened a loot box, and 13% had ever played a social casino game.

Where loot boxes are offered in games, these do not fall under British gambling law where the items received cannot readily be cashed out and are confined for use within the game. However, loot boxes are subject to Consumer Protection Regulations which protect against misleading or aggressive marketing. Last year the Video Standards Council Rating Board and PEGI introduced a new label for video games to warn parents where these include the opportunity to make in-game purchases, including loot boxes.

Where in-game items, known as skins are traded or are tradeable, they can act as a virtual currency. Where facilities for gambling with these skins, are offered, this is caught by gambling legislation. The Gambling Commission has shown that it will take action and prosecute unlicensed gambling with skins. In 2017 it successfully prosecuted the operators of the website FutGalaxy for illegally offering skins gambling, making it the first regulator in the world to bring such an action.

The ASA expects gambling operators to advertise in a socially responsible way, and this includes ensuring that gambling adverts online are targeted away from children. It has ruled that gambling-like video games or games that feature elements of gambling related activity should not be used to promote real money gambling products. More generally, marketers are required to avoid the use of themes or content associated with youth culture when advertising gambling. GambleAware has commissioned further research on the impact of marketing and advertising on children, young people and other vulnerable people. The first tranche of this has been published, and made a number of recommendations on advertising on social media and advertising esports.

Society Lotteries

Society lotteries are fundraising tools run for the benefit of charities and other non- commercial organisations, such as sports clubs and local authorities. In total, society lotteries raised £314 million for good causes in the year to September 2018.  The Gambling Act 2005 set limits on the level of proceeds a society lottery can raise per draw and annually, and also caps the maximum prize that can be offered.  There are currently around 500 societies holding around 850 Gambling Commission licences to operate lotteries (due to many societies holding both remote and non-remote licences), and is estimated that there are over 50,000 small societies registered with local authorities. 

Since 2005, the lottery market has become increasingly diverse, with the increased use of lotteries by major charities as a fundraising tool, and the promotion of large-scale ‘umbrella’ lotteries. The growth of the internet has enabled societies to sell more tickets remotely through their websites and reach greater numbers of potential players. Umbrella schemes - where an External Lottery Manager, a society lottery operator or a collective of society lottery operators, promote multiple society lotteries under a single brand (for example, the Health Lottery and People’s Postcode Lottery) - can provide marketing efficiencies, driving ticket sales and in turn prizes. Umbrella lotteries are not separately defined or recognised in the Gambling Act 2005, but they are entirely legal - each society within the umbrella brand is licensed individually by the Gambling Commission.

The Government consulted on reforms to society lotteries limits in 2018 and announced a package of increased limits in July 2019, with the aim of ensuring that there is an appropriate regulatory framework for lotteries, and that both society lotteries and the National Lottery are able to thrive.  The package of reforms is intended to enable society lotteries to continue to grow, while maintaining the unique position of the National Lottery.

Between December 2014 and March 2015, DCMS ran a Call for Evidence, informed by market assessment provided by the Gambling Commission, which invited views on the changing lottery landscape, and in particular whether the current regulatory regime maintained an appropriate balance between the National Lottery and the wider gambling and lottery market. In March 2015, the DCMS Select Committee held an enquiry on society lotteries. The Committee’s report made a number of recommendations, including reviewing sales and prize limits.  It also asked us to consider legislating for a separate class of lotteries (umbrella lotteries), with its own set of limits on individual draws, annual sales and prizes.   Following advice from the Gambling Commission, which was published alongside the reform consultation in 2018, Ministers decided not to pursue this.

A formal consultation was held between June and September 2018 and over 1,600 responses were received.  This was followed up with further engagement with the society lotteries sector, Camelot as the current operator and the National Lottery distributing bodies. Subject to amending secondary legislation, the following changes to the limits for large society lotteries were announced on 16 July 2019:

●        Per draw sales limit will increase from £4 million to £5 million;

●        Per draw maximum prize will increase from £400k to £500k;

(retaining the rule that the top prize should be no more than 10% of sales);

●        Annual sales limit will increase from £10 million to £50 million, with the ambition of running another consultation in the future to consider what regulatory requirements may accompany a higher £100 million annual limit.

As a result of increasing sales limits for society lotteries, we expect to see returns to good causes increase across the sector, especially by the largest umbrella lotteries, and we will monitor this carefully.  The announcement included an ambition to increase the limits further in the future, following careful monitoring of the potential effects of the new limits on the wider lotteries market.  The rule that the top prize should be no more than 10% of sales has been maintained, because we are seeking to balance the opportunity for society lotteries to grow with preserving the distinct space the National Lottery operates in, with a key feature being the offer of life-changing prizes. Changes will require affirmative secondary legislation.  Question 18 refers to lotteries being “taken over by larger commercial lotteries”.  Umbrella lotteries are not considered commercial because by definition they are not-for-profit organisations and raise money for good causes. Some charities utilise the expertise of External Lottery Managers (ELMs) to operate their lotteries to maximise returns to good causes.  ELMs are private companies and pay Corporation Tax in the usual manner. 

The National Lottery and society lotteries operate within separate legislative frameworks.  The current National Lottery licence expires in 2023. Work is underway between DCMS and the Gambling Commission to look at policy and licence design issues for the next (4th) licence, and engagement with the market has begun.  Bidding criteria have not yet been set.

In the conclusions of the Government’s Gambling Review in 2018, the Government committed to considering whether 16 remained an appropriate age limit to play all National Lottery products, including scratchcards, as part of work on the next licence competition.  A consultation on this issue was launched in July 2019. 

6 September 2019