Tag: commission

If the Government does not want consumers to be asked to produce bank statements and tax returns in order to spend their own money, why is this happening?

‘If the Government does not want consumers to be asked to produce bank statements and tax returns in order to spend their own money, why is this happening? ‘

Great Britain: Regulation – Will Commission‘s slight return strike a blue tone with bettors?

“You don’t have to have the solution,

You’ve got to understand the problem,

And don’t go hoping for a miracle,

All this will fade away.”

‘Slight Return’, the Bluetones (1995)

The long-awaited publication of regulatory policy on affordability checks for gambling consumers in Great Britain may have provided clarity of a sort – but last week’s announcement was also notable for what it did not contain. 

The Gambling Commission’s intention to run a six-month pilot of financial risk checks had been well-trailed. It was surprising therefore that its announcement contained so little information about how the tests would be conducted; by whom; and what criteria would be used to determine success. In 2017, the Gambling Commission’s Responsible Gambling Strategy Board published an Evaluation Protocol, based on the principles of ‘robustness and credibility’, ‘proportionality’, ‘independence’ and ‘transparency’. As things stand, it is unclear to what extent – if at all – the Commission intends to comply with its own protocol (or indeed the Government’s Magenta Book).

The Protocol states, for example, that good evaluation “should include a clear articulation of what an intervention is intended to do, the outcomes it is intended to achieve, and how it is envisaged these outcomes will come about”; and also that it “has data collection which is planned before the intervention is implemented – so that, if necessary, baseline data can be collected before the policy starts.”  

The Gambling Commission has stated that the purpose of the new regulation is to create greater consistency for consumers; to regularise the patchwork quilt of trigger points and thresholds for checks that currently exists. At the same time, it has been remarkably incurious as to why this system of checks came into being in the first place and what effects it has had. If the Government does not want consumers to be asked to produce bank statements and tax returns in order to spend their own money, why is this happening? How has the existing system affected consumers, the functioning of the licensed and unlicensed markets and the finances of British horseracing? Without understanding this, how will we know that the Commission’s new system is better? Without robust analysis of the problem the policy is intended to solve, how will the success or otherwise of the pilot and any succeeding regulation be assessed?

The results of the 2021 ‘short survey’ into consumer attitudes towards affordability checks is another significant omission. Last year, the Gambling Commission committed to publish “the results from the survey”, which was completed by 12,125 individuals, thought mainly to be bettors (horserace bettors in particular were encouraged to submit their views). Instead of this, the Commission has published what might best be described as a narrative description of responses to the overall call for evidence – which is not at all the same thing. The market regulator’s reluctance to publish the actual results will prompt speculation that it perceives the views of consumers to be inconvenient or of marginal relevance to its mission. The Commission may find that a failure to do what it said it would, hinders rather than helps its goals of increasing transparency and building trust.

Last year, the Gambling Commission denied a request, made under the Freedom of Information Act, to release the survey results. It claimed that the “necessary preparation and administration involved in publishing the information” outweighed the “legitimate public interest in promoting the accountability and transparency of public authorities”. What had seemed a doubtful excuse at the time now seems highly implausible. It is difficult to believe that the composition of a single webpage on responses to the 2020/2021 call for evidence involved very much “preparation and administration”. Having been forced to wait for more than three years for publication, this single page may strike the thousands of people and hundreds of organizations who took the trouble to respond as a rather slight return. Those who believe that the Commission has no interest in the views of recreational consumers are likely to feel vindicated. In a paper published in 1999, Bill Eadington, the father of modern gambling studies, described the way that gamblers are often treated as “customers whose demands are not fully respected in the public policy formulation process.” He had a point.

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Dan Waugh

E:  dan.waugh@reguluspartners.com

W:  www.reguluspartners.com

Sample Bias – the new normal

 
Great Britain: Regulation – Is the Great British Gambling Debate heading for a Terminal solution?


Last week’s House of Lords debate on gambling advertising was in many respects the same tired old combination of mistruths and moral indignation; but it was notable for providing a glimpse into the next phase of gambling policy discourse in Britain. Lord Foster of Bath, who instigated the short debate told the House that:
 
“I suspect public concern is about to rise because, in July, the Gambling Commission will release new figures about gambling harm. The Gambling Minister in the other place has already indicated that they are likely to show that 1.3 million people will classify as ‘problem gamblers’ and that a further 6 million are at risk. If confirmed, these figures are far higher than those used to inform the Government’s work on their White Paper. This is a real cause for concern, further strengthening the call for action.”


 
The intent could not be clearer. If the publication of the Gambling Survey for Great Britain (‘GSGB’) in July reveals a markedly higher rate of ‘problem gambling’ than the estimates relied upon by the Government in its White Paper, then the wisdom of the policies contained therein will be open to question. Lord Foster’s point is a fair one. In its White Paper, the Government relied on the 2018 Health Survey for England, which reported a ‘problem gambling’ prevalence rate of 0.38%; and the current Official Statistic (from the HSE 2021) is 0.25%. The Final Experimental Stage of the GSGB reported a figure of 2.5% – between six and ten times higher than the HSE. If the Government and regulator are confident that results obtained from the GSGB are reliable, concern groups will justifiably ask for a re-run of certain policy decisions (and possibly even Judicial Review, given the litigious bent of some activists).
 
The problem is, of course, that the Gambling Commission does not appear to be at all confident that results obtained from the GSGB will be reliable. Each of the new survey’s iterations – from the Pilot Survey in 2022 to the Experimental Stages in 2023 to Wave 1 of the official survey in 2024 – has revealed signs of sample bias. In an independent review (‘independently’ funded by the Gambling Commission), Professor Patick Sturgis of the London School of Economics, commented on the “non-negligible risk” that the GSGB would “substantially over-state the true level of gambling and gambling harm in the population”. He also urged caution, warning that “until there is a better understanding of the errors affecting the new survey’s estimates of the prevalence of gambling and gambling harm, policy-makers must treat them with due caution.” Such advice appears lost on the Commission (which prefers to gloss over inconvenient opinions). In addition to rates of ‘problem’ and ‘at risk’ gambling’, it plans to release survey findings in respect of suicidality, violence and abuse, mental ill-health and use of food banks – in the knowledge that the figures may very well be incorrect and misleading. Just when the Department for Culture, Media and Sport might have thought it was nearing the end of a long and tortuous journey on gambling reform, the Commission is throwing down new track.


 
The threat to the licensed betting and gaming market in Great Britain is severe. The public health establishment (including senior figures within the Department for Health and Social Care) has signalled its intention to “tackle gambling” (all gambling and not just harmful gambling) in the same way that it has dealt with tobacco smoking. Demands for total bans on advertising (including at racecourses), the sale of beer and wine in bingo clubs and casinos and the imposition of ‘plain packaging’ for all gambling products (no colours, logos or images – farewell Queen of Hearts), will intensify. In Scotland, it is reported that the SNP plans to raise the legal age of gambling if it achieves independence (presumably with a carve out for anti-gambling vitriol in its Hate Speech legislation) but this is only a stop along the route rather than a final destination. It is far from obvious however, that the industry realises the perilous nature of its current position. Tone-deaf advertising on bus stops and at railway stations only strengthens the ground for those seeking a terminal solution.

In the hands of a narcissist.

The latest from Regulus partners

 
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

Cracking the Code: Exploring the role of the Regulators’ Code in Britain’s gambling market 

By Dan Waugh, Regulus Partners

To what extent should the Gambling Commission be guided by the Regulators’ Code in discharging its duties? To what extent does it comply with the Code and how would we ever know? Does this matter? This is the discussion that we hope to stimulate with the publication today of our new report, ‘Questions of Principle: Assessing the Gambling Commission’s compliance with the Regulators’ Code and the Nolan Principles’. At present, there is considerable uncertainty about what influence, if any, the Code should exercise on the regulation of Britain’s betting and gaming market; and the perpetuation of this uncertainty, we argue, is unlikely to be in the best interests of consumers.
 
The Regulators’ Code was introduced in 2014 by the Department of Business Innovation and Skills. All statutory regulators in Great Britain – including the Gambling Commission – are required to “have regard” to the Code in exercising their duties – a phrase that accommodates a high degree of subjectivity. Last year, the Commission’s chief executive, Andrew Rhodes described the Code as “not a long document – just seven pages”; and “a sensible set of guiding principles” – a characterisation that drew rebuke from the legal community. On leading lawyer responded: “I am sure Andrew Rhodes wouldn’t like to see gambling operators treating, for example, its seven page Industry Guidance on High Value Customers as just a ‘sensible set of guiding principles’”. The exchange highlighted an unhelpful difference of opinion between the market regulator, its licensees and licensing lawyers.


 
The Code itself consists of six provisions:Regulators should carry out their activities in a way that supports those they regulate to comply and grow;Regulators should provide simple and straightforward ways to engage with those they regulate and hear their views;Regulators should base their regulatory activities on risk;Regulators should share information about compliance and risk;Regulators should ensure clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply;Regulators should ensure that their approach to their regulatory activities is transparent. 
Regulators are required to adhere to the Code in the context of their wider statutory roles and they may exempt themselves from certain provisions, so long as they explain why. 
 
Our analysis suggests that, while the Gambling Commission (which has not announced any Code exemptions) is often compliant, there have been instances where it appears to have breached code provisions, sometimes on a repeated basis. Our report highlights particular concerns with regard to the Commission’s observance of the first and sixth Code provisions – supporting compliance and growth; and ensuring transparency.
 
The first of these Code provisions is often misinterpreted as a requirement for the Commission to encourage economic growth at all costs – something that is clearly incorrect. The provision is however, more nuanced than this. It asks that regulators “avoid imposing unnecessary regulatory burdens”; and that they “assess whether similar social, environmental and economic outcomes could be achieved by less burdensome means”. They should also “understand and minimise negative economic impacts of their regulatory activities”; “improve confidence in compliance for those they regulate, by providing greater certainty”; and “ensure that their officers have the necessary knowledge and skills to support those they regulate, including having an understanding of those they regulate that enables them to choose proportionate and effective approaches.”
 
These are sensible requirements for any market regulator; and yet we were able to find little evidence that the Commission actively pursues them. Its public consultations rarely (if ever) suggest active consideration of the need to understand and minimise regulatory burdens. Last year, the Commission’s chief executive, Andrew Rhodes observed (correctly) that “growth must come when the business is compliant, not instead of it”. This is undoubtedly true, but the fact is that most licensees are compliant (if they were not then they would cease, at some point, to be licensees). No market – even a monopoly – is likely to be 100% compliant all of the time; and it is clearly not the intent of the Code that regulators should withhold support pending universal compliance. It is also unclear why the Commission would see non-compliance as a reason to ignore its duty to “understand and minimise negative economic impacts” of its regulatory activities, or to “ensure that their officers have the necessary knowledge and skills” – particularly when it is often the customer who ‘pays’ for impacts and deficits. 
 
Our report highlights a number of instances where the Commission appears to have fallen short of the standards set by the Code. These include:The approval of regulatory settlement grants for organizations and individuals openly engaged in anti-gambling advocacy;The misuse of statistics and research – and the withholding of key evidence -in public consultations on regulatory reform;Inconsistent and often opaque approaches to policy determination (arising from public consultations);A failure to apply evaluation or scrutiny to the award of £90m of regulatory settlements between 2019 and 2023. 
In addition, as we note in our article for Cieo this week (Help! I have become an ‘issue’ – Cieo), we have uncovered indications of bias within the Commission’s Advisory Board for Safer Gambling, as well as the existence of secret meeting notes which should, in our view, have been published.  
 
Any review of compliance is necessarily selective – and no organization is perfect. It is important not to lose sight of the many achievements of the Commission in supporting a generally well-functioning market, characterised by low rates of illegal and underage gambling and a world-leading approach to sports integrity. The rate of ‘problem gambling’ is also very low by international standards, with 0.25% of adults estimated to be PGSI ‘problem gamblers’. This, at least, is the case at present – although the Commission’s plan to replace the ‘gold standard’ NHS Health Survey with its experimental Gambling Survey for Great Britain seems certain to result in much higher – and far less reliable – reported rates of ‘problem gambling’. 
 
The Regulators’ Code is a valuable document, designed to help market regulators to focus on their statutory roles, without getting distracted by alternative, often incompatible political agendas. The Commission has the opportunity to make far greater use of the Code by stating explicitly how it guides its strategy; by actively monitoring and reporting on its compliance (as some other regulators do); and by establishing a mechanism for constructive engagement with licensees and others in regard to suspected breaches. The absence of such measures will inevitably give rise to confusion and cynicism – neither of which is in the interests of the consumers who the Gambling Commission was established to serve.Please see our full report here:

Questions of Principle: Assessing the Gambling Commission’s compliance with the Regulators’ Code and the Nolan Principles
Disclaimer; The analysis provided in this report represents the opinions of the authors. Any assessment of trends and change is necessarily subjective. The information and opinions provided herein are not intended to provide legal, accounting, investment or policy advice, nor should they be used as a forecast. Regulus Partners may act, or have acted, for any of the companies and other stakeholders mentioned in this report.
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