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Great Britain: Regulation – The Invisible Hand of Gambling Market Regulation
Some years ago, Britain’s Gambling Commission announced that it had banned the term ‘responsible gambling’. At the time it seemed like an odd move. Notwithstanding legitimate concerns about the misuse of ‘responsible gambling’ by some licensees (see for example, http://regulusp.blogspot.com/2014/11/the-recklessness-of-gambling-responsibly.html), there is generally something a little unsettling about state agencies censoring language.
Based on recent statements, one could be forgiven for thinking that the concept of responsible regulation might also have had its day. In an interview for the Smart Betting Club, GB Gambling Commission CEO, Andrew Rhodes appeared to wash his organisation’s hands of any responsibility for devising affordability checks; claiming that the current informal regime is the result of licensees reacting to enforcement cases rather than regulatory diktat. The theory of ‘spontaneous adoption’ however requires us to overlook the fact that in 2020, the Commission warned licensees that: “customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three months’ payslips, P60s, tax returns or bank statements which will both inform the affordability level the customer may believe appropriate with objective evidence whilst enabling the licensee to have better insight into the source of those funds and whether they are legitimate or not.”
Mr Rhodes’s assurance that the Government does not want gamblers to produce payslips might be more convincing if it were not for the fact that this is precisely what the Gambling Commission has demanded of them. During the podcast, he described plans for financial risk checks and financial vulnerability assessments as Government policy, which the regulator has been asked to execute. This much is true; but it is also the case that the Commission has been the principal architect of that policy. Rhodes suggested that the Commission’s own plans for checks had been overtaken by the Government’s review of the Gambling Act, stating that: “a lot of people were saying that this is a really big policy topic and it’s really a matter for the White Paper – the Gambling Commission shouldn’t be trying to address this. And we agreed.” The fact is however, that when the Commission launched its call for evidence on affordability checks in November 2020, it did so in the full knowledge that the Government’s own review was imminent. Papers released under the Freedom of Information Act show that the Commission had originally expected the DCMS call for evidence in October – a month before its own was launched. Its refusal to publish the results – including the views of 12,125 individuals (understood to be mainly customers) – cannot be justified by reference to the White Paper alone. The Commission’s view that there is “no outstanding public interest” in releasing the information (1,169 days later and counting) is unlikely to be shared by those who took the trouble to respond.
Mr Rhodes also confirmed his expectation that “the black market in the UK will grow because it is being targeted” by unlicensed operators. There was little recognition however, of the contribution – positive or negative – of market rules to the creation of conditions in which illegal activity expands, rather like governments printing money and then blaming commodity prices for inflation. He also claimed that coverage of black-market issues by the Racing Post had been not “entirely helpful” – but it wasn’t clear what this was intended to convey. One possible interpretation is that the RP’s coverage may itself have encouraged bettors to use unlicensed bookmakers – a claim that requires substantiation if it is to be advanced (we stress that we do not know what Mr Rhodes meant by the remark; merely that this is one reasonable interpretation).
Andrew Rhodes cuts an increasingly frustrated figure these days – often giving the impression that everything would be fine if only people could be made to understand. He deserves credit for agreeing to take part in the SBC podcast. Engagement with a wide range of stakeholders is an essential ingredient of good market regulation. For it to be meaningful however, engagement requires a willingness to deal frankly with difficult issues, even if this involves occasional admission of responsibility or fallibility. To err is human; to evade is political. If the Government really wishes to sort out the mess of affordability checks, it should initiate a review to identify how the current system came into being and what the effects have been (in terms of harm prevention, consumer behaviour, law-breaking and market functioning). The truth is that a series of pilot schemes for affordability checks has been running for several years now. The effects of this programme should be independently assessed and evaluated – but this seems unlikely to take place. The lack of curiosity from officialdom about the origins and effects of affordability checks is telling.
Watch the podcast here: https://youtu.be/WnGvzO7F0pw?si=bSl_3LBWBCq8SvuH
Geoff Banks Online Reports 