Department of Health and Social Care, Department for Digital, Culture, Media and Sport and the Department for Education – Supplementary written evidence (GAM0020)

 

The information below provides the additional information requested by the Committee during the officials evidence session on Tuesday 16 July. The Government will provide a separate response to the committee’s call for evidence by the deadline 6 September.

 

Details of the recently announced Industry Package

Five large gambling operators - Bet 365, GVC, Flutter (formerly Paddy Power / Betfair), Sky Betting and Gaming and William Hill - announced they will increase their financial contributions to support problem gamblers tenfold, from 0.1% to 1% of their gross gambling yield (money staked minus money paid out in winnings) over the next four years. This will involve an initial increase from 0.1% to 0.25% in 2020, rising to 0.5% in 2021 and 0.75% in 2022 until it reaches 1% by 2023, estimated to amount to an annual contribution of approximately £60 million at that point.

It is too early to say precisely what this increased funding will be spent on, but the five companies have committed to spend most of the funding on expanding treatment services, amounting to a cumulative total of approximately £100 million over the four year period. The five companies also committed to work with the Department for Digital, Culture, Media and Sport (DCMS), the Department of Health and Social Care (DHSC), providers of existing treatment services, and the NHS, to determine how additional funds are appropriately deployed.  More recently, on 2 August, they announced that they have asked Lord Chadlington to chair the independent committee that will recommend how best to administer funds committed to safer gambling initiatives, including the treatment of problem gambling.

We are continuing to build evidence on treatment needs. This includes an evidence review by the National Institute of Health Research (NIHR) on which interventions are effective in preventing and reducing harm. For context, GambleAware, the leading charity commissioning services, is currently spending around £7 million per year on treatment, so an additional £100 million is a very significant uplift. We want to make sure this money is spent wisely, and it will take time to scale up service provision. This is a similar timescale to the NHS Long Term plan, which commits to opening up to 15 NHS clinics by 2023/24. 

Gambling Commission’s licence conditions and codes of practice (LCCP) require all operators to make an annual financial contribution to one or more organisation(s) which between them research into the prevention and treatment of gambling-related harm, develop harm prevention approaches and identify and fund treatment for those harmed by gambling.  This is part of a wider set of requirements covering social responsibility, which primarily focus on how the operators conduct their operations and engage with those who may be at risk of harm. It is for the Gambling Commission to assess whether LCCP requirements have been met by operators they license

Currently the licence condition does not specify how much any operator should donate, nor to which organisation. Most operators opt to give funding to the charity GambleAware, which in turn suggests operators should give a sum equivalent to 0.1% of their GGY. There are examples of operators giving less than 0.1%, and a small number give only a nominal amount to GambleAware. We know that GambleAware raised £9.6 million of its £10 million target in 2018/19, but 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 want to see all operators taking their responsibilities seriously, and we know operators also sometimes give to other organisations and initiatives, such as the safer gambling advertising campaign, announced in the Gambling Review. This is being delivered by GambleAware but funding is additional to their core funding target of £10 million.

As part of its commitment to strengthen the voluntary system for funding support, the Gambling Commission has recently announced a change to the licence requirements which will mean operators must donate to an organisation approved by the Gambling Commission. We work closely with the Gambling Commission and had several discussions about both the development of the National Strategy for Reducing Gambling Harm and the LCCP change. Both of these have been discussed at the cross government steering group.

 

Enforcement action

Over the past three years, penalty packages and settlements have totalled £39.7million.  The Gambling Commission’s approach has toughened significantly over that time - in 2016/17 £1.7million settlements were agreed, rising to £18.4million in settlements and penalties in 2017/18. The Gambling Commission’s enforcement action in 2018-2019 resulted in £19.6million in penalty packages and the surrender of three Personal Management Licences (PMLs). The Gambling Commission has pointed out that revocation of an individual or an operator’s licence is appropriate where this is the only means of protecting consumers and maintaining public confidence.

Alongside regular enforcement work, the Gambling Commission launched an investigation into the online casino sector 18 months ago. It assessed or engaged with 123 online operators and since then five operators have surrendered their licences and can no longer transact with consumers in Britain.

 

Kenya - Gambling Regulation

With regards to the recent media coverage of alleged breaches of Kenyan law, the British High Commission in Nairobi are currently organising a visit by the Kenyan National Assembly Departmental Committee on Sports Culture and Tourism to London in September or October.

The purpose of the delegation’s visit will be to understand how the UK;

  1. Prevents gambling from being a source of crime or disorder, being associated with crime, disorder, or as an accessory to crime;
  2. Ensure that gambling is conducted in a fair fashion;
  3. Protects children and other vulnerable persons from being harmed or exploited by gambling.

The planned visit be an opportunity for the Kenyan lawmakers to learn UK best practice, and potentially for the UK Gambling Commission to offer advice on the regulation of their gambling system

 

Advertising

The most widely-quoted figure on gambling industry spend on advertising comes from financial analysis by Regulus consultancy, which estimated the gambling industry spent £1.5billion on advertising and marketing in 2017[1].

GambleAware recently published the first tranche of research on advertising and marketing which included estimates of industry spend from the Ebiquity advertising database[2]. While the estimated £194 million spend on TV advertising was similar to Regulus estimates (£234 million), the overall Regulus results were much higher. Regulus included sponsorship (£60 million), and the cost of employing marketing teams, but the key difference was that Regulus estimated spend on online direct advertising, (£747 million) and on social media (£149 million). The GambleAware report only looked at online banner advertising, and estimated spend at £9 million. However, the GambleAware research also reported findings on exposure across different platforms. The second tranche of the research will explore the impact that exposure has on children, young people and vulnerable groups.

Detailed marketing expenditure is considered commercially confidential, so obtaining definitive figures is not possible. You suggested that advertising spend should be declared as part of operators’ regulatory returns. It is up to the Gambling Commission to advise whether this information is needed for assessing operators’ performance against the licensing objectives.

With regards to society lotteries advertising expenses, the government's response to the consultation on society lotteries[3] set out an aim to launch a further consultation on introducing a higher tier licence. This would gather evidence about what additional licensing conditions should be attached to improve clarity for players and boost returns to good causes, as we are particularly concerned that the regulatory framework is not currently suitably robust for larger scale society lotteries. We share the concerns raised by some respondents about the marketing costs and relatively low rate of returns to good causes from the largest umbrella lotteries. Measures to be more fully explored and examined in the consultation could include, for example, a higher stipulated minimum return to good causes and more robust measures to limit the amounts spent on marketing and advertising.

 

Education

As Richard Vaughan said during the discussion, the Department for Education (DfE) has a budget of up to £6 million in this financial year to start developing a programme to support schools in delivering the new subjects. This money will be used to develop a central programme of support for schools; it is not funding to be distributed to individual schools. Any further funding beyond the next financial year is a matter of the forthcoming Spending Review.

We intend to focus on tools that will help teachers to improve schools’ practice. The DfE is currently working with lead teachers, non-specialist teachers and schools to develop training materials that are suited to their needs. Our plans include:

(a)   an implementation guide to support teachers and school leadership teams to plan for the introduction of the new subjects.

(b)  targeted support such as training materials and resources that teachers need to teach the new subjects effectively. The DfE has completed a user research exercise with schools and teachers and is currently undertaking the next stage of the research to understand more clearly the types of support on training materials teachers will want to have access to, to help them teach the new subjects effectively and meet the needs of young people. We know that easy access to quality-assured teaching resources and good practice is a key need for schools, and we will respond to this. We plan to encourage some of the materials to cover the subject of gambling and debt management.

(c)  encouraging as many schools as possible to start teaching the new subjects from September 2019, so that we can learn lessons and share good practice ahead of compulsory teaching from September 2020. It is encouraging to see that approximately 1,600 schools have applied to become early adopter schools. We are planning to invite these schools to conferences towards the end of the year to discuss planning for teaching these subjects.

 

Research

On 19 July GambleAware published the results of a research project examining the link between problem gambling and suicide. Full details can be found here: https://about.gambleaware.org/news/gambling-and-suicide-research/

The National Institute of Health Research (NIHR) is carrying out a review of the evidence for effective interventions to prevent and reduce gambling-related harm.

 

2 September 2019


[1] Regulus estimates: (https://about.gambleaware.org/media/1857/2018-11-24-gambling-marketing-online-five-times-tv-ad-spend.pdf)

[2] GambleAware research: (https://www.about.gambleaware.org/media/1963/17-067097-01-gambleaware_interim-synthesis-report_080719_final.pdf)

[3]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/817544/Response_to_Consultation_on_Society_Lotteries_PDF.pdf