Tombola – Supplementary written evidence (GAM0105)

Thank you very much for the opportunity to give evidence to the committee on 5 November. During the session Lord Foster asked what changes we would like to see in either legislation or regulation, and Baroness Armstrong asked for our views on the use of credit cards in remote gambling. I’ve included a few notes on me and tombola to add context.

tombola background

• Began my career with my family’s printing business, Edward Thompson, founded in 1867
• Edward Thompson has supplied half the bingo tickets in UK clubs for six decades
• I founded tombola limited in 1999 and it remains family owned
• Offering online bingo in UK since 2006, Italy 2011, Spain 2012, Denmark and Sweden 2019
• Market leader in UK, Italy and Spain in spite of lowest limits and smallest margins
• Strategy: Bingo specialists, differentiated content, strong community and low cost of play
• Revenue 2019 was £104 million from 80,000 daily players losing on average £3.60 per day
• This year we will pay £20 million in UK Remote Gaming Duty
• 600 employees, 500 working in Sunderland, building games and supporting players
• Both our revenue and number of employees have doubled in last four years
• £12 million invested in tombola’s Sunderland campus, £10 million more planned
• Julie Elliot our local MP helped us break ground on new HQ, opened in 2018

tombola Safe Play strategy

Since we first operated online bingo in 2006 we have always felt that our approach to responsible gambling has contributed to our commercial success. Limiting the rate of spend and limiting absolute spend has helped us build a more sustainable business where players are more likely to feel that they have had value for money, more likely to recommend our games to others and less likely to experience harm. Some of our initiatives:

• Maximum stake of £2 on Bingo and £1 on Arcade products
• Absolute maximum £500 in deposits in a week
• We reward players with £1 for setting a deposit limit
• Two thirds of players have a limit lower than the site maximum
• Lower cost products such as bingo Lite with maximum stake of 40p
• No VIP scheme and all customers treated the same
• No advance purchase of bingo games
• “Lock your limits” feature helping players control limits for longer
• “Game freeze” lets players block certain games
• First operator to offer lifetime self-exclusion
• First operator to run a Safe Play week
• Default stakes always set at cheapest option
• Never had wagering requirements with all winnings instantly withdrawable
• No sign up offers on TV ads since 2015
• Safe Play team launched in 2018
• Phase out of direct use of credit cards started earlier in 2019

• New feature being built – players able to set and lock lower stake limits e.g. 50p on Arcade

In October we won EGR’s Socially Responsible Operator of the Year award for the fourth time and the judges commented: “When you compare tombola’s business model, they stand out as the winner. It’s also simple and genuinely about focusing on player safety.”

Credit Cards

Baroness Armstrong asked for our view on the use of credit cards. When the Gambling Commission launched their review of the use of gambling cards, we decided to start phasing out their direct use on our sites and apps. Only 2% of our deposits were previously taken directly from credit cards. Since I gave evidence to the committee the Gambling Commission have announced the conclusion of their review banning the use of credit cards from April. We stopped all remaining direct use of credit cards last week. We will also ensure that any use of PayPal is compliant with the ban.

tombola’s recommendations

Stake Limits:

When I gave evidence to the committee, I said that I was in favour of stake limits for machine style games online. Even though I believe our strategy has been commercially successful in spite of and perhaps because of our self-imposed limits, Lord Foster was right to point out that another operator could successfully adopt a different strategy with higher stakes. In our view the need for limits is linked to the repetitive nature of the games, the speed of play and the continuous availability over twenty-four hours.

For quick games (with a minimum cycle time from the start of one game to the start of the next from

2.5 seconds to 60 seconds say) we would recommend the same stake limit as B3 machines in land- based establishments at £2.

We believe there is a case to be made for some traditional casino table games such as Roulette and Blackjack to have a higher limit but perhaps with a minimum cycle time of 60 seconds to better reflect real world play and limit the rate of spend. We don’t offer these types of games on tombola.

Regulation:

We believe that regulation governing remote gaming could be updated to include elements of best practise established by different operators. We have always said that if the Gambling Commission were to adopt one of our practises the one that we would recommend would be the “Lock your Limit” feature which was originally a suggestion from a tombola player: Current regulation ensures that players have an option to set deposit limits. However, customers are able to raise these limits and wait 24 hours for the new limits to take effect. With our “Lock your Limits” tool players can lock their limit for up to six months and 15% of our players have their limits locked for longer than the standard 24 hours.

Remote Bingo Duty:

In May 2018 when it was announced that the maximum stake allowed on Fixed Odds Betting Terminals (FOBTs) would be reduced to £2, it was also announced that the duty on Remote Gaming would be increased to offset potential reduction in Machine Duty from FOBTs. We believe the intention was to generate additional duty from casino style games such as slots and roulette and that an unintended consequence was that it increased the duty on Remote Bingo. In land-based establishments Bingo Duty has its own category whereas online Bingo is included within the general Remote Gaming Duty category. Remote Bingo therefore currently attracts duty at 21% compared to General Betting Duty of 15% for offline and online, and land-based Bingo Duty at 10%.

We believe that the mechanical and social characteristics of bingo that distinguish the game from other forms of gambling offline and lead it to be considered a “soft” form of gambling with additional social value are replicated online. We therefore wrote a paper for the Treasury proposing that a new category of Remote Bingo Duty be created mimicking the offline categories and attracting the same duty as General Betting Duty currently at 15%. We estimate that this would reduce Duty raised by

£10 million annually but that it would correct an unintended anomaly.

Thank you for the opportunity to respond in this way. If anyone from the committee or those supporting the committee would like to visit the tombola campus in Sunderland, we would be very happy to facilitate this. I hope meeting with our game developers, chat moderators and Safe Play team would give a useful insight into tombola’s way of operating.

The three buildings that make up the tombola campus in Sunderland

27 January 2020