Five things we learned from the Gambling Commission’s media briefing

EGR delves into key aspects arising from the regulator’s first round of white paper changes, with CEO Andrew Rhodes and executive director Tim Miller giving their thoughts behind the measures
The post Five things we learned from the Gambling Commission’s media briefing first appeared on EGR Intel.  

More than 12 months since the white paper into the Gambling Act 2005 review was published last April, we have some movement. The glacial speed of this policy shift, which was first announced in the Conservative Party manifesto for the 2019 General Election, has been beset by political upheaval, public furore and an extensive consultation period. At the centre of this is the Gambling Commission (GC), which, after poring over the feedback received from the first consultation period, which concluded last October, has revealed its first set of changes that will be borne out of the seemingly mammoth process.

As a headline, the much-maligned affordability checks, or “financial risk assessments”, have been given some clarity. “Light touch” checks will begin for bettors with net deposits of £125 a month, starting at £500 net deposit in August, before dropping to the new level in February 2025.

At the upper level, the same degree of clarity has not yet been divulged. Instead, the GC is to carry out a six-month pilot scheme, after which it will decide if “permanent rules” will be introduced, along with a promise of frictionless financial risk assessments for the “vast majority of customers”.

Those upper checks may be informed by the Betting and Gaming Council’s (BCG) new voluntary code on checks, with net deposits of £5,000 a month initiating a risk assessment, while a higher £25,000 threshold in a rolling 12-month period will see operators undertake a thorough check, including enhanced due diligence.

Changes are also due to be introduced for marketing, online casino games, personal management licences and land-based operations, but, for now, all eyes are firmly on the affordability checks, which have drawn such ire from both sides of the debate.

Battle scars

As the debate over affordability checks has rumbled on, the Racing Post led a campaign to scrap the measures due to the damage inflicted on horseracing’s finances. Following the announcement from the GC and BGC yesterday, a piece from the paper’s editor, Tom Kerr, described the new voluntary code as a “hard-won victory”. Setting the battle-inspired imagery aside, it does beg a question of whether the GC got it wrong in the first place.

Financial risk checks will now be based on net deposits, not net losses, with upper level checks, if using the BGC’s code, set to be way above the loss triggers of £1,000 in 24 hours and £2,000 in 90 days.

When asked by EGR if the GC had to concede anything or got things wrong, Rhodes and Miller suggested the journey to this point had been a learning process.

Miller said: “I don’t think this is about conceding things. It’s that it was a genuine consultation. We recognise that the proposals we set out were very much based on the government’s white paper. The whole reason for consulting is to make sure that your final position is as evidence-based as possible.

“Where we’ve made changes, this is not about conceding or otherwise, it’s about the fact we’ve listened to the responses we’ve had, and we recognise that people spent a lot of time putting together their responses and sharing evidence with us. It’s right that we listen to that,” he added.

Rhodes said the BGC code would bring about a “series of minimum standards” that will bring “some consistency to the area” that both customers and operators had been calling out for.

What’s that coming over the hill?

A stick that has been used to beat the government and GC with since the release of the white paper has been the increased risk of driving customers to the black market with regulatory changes.

Anecdotal evidence suggests WhatsApp and Telegram bookmakers are more accessible and bigger than ever, while the rise in so-called ‘Non-GAMSTOP’ operators, as shown by a single Google search, points to a large problem.

In the past, the GC has said that the threat of the black market would not see it browbeaten into delaying or deciding not to make regulatory changes to protect consumers. Those changes will now come into the offing, albeit at a higher level and with a different methodology, but leakage concerns remain.

Rhodes argued that while the black market is a “much-debated area” in the UK, he was confident its scale was nowhere near as large compared to other jurisdictions.

He said: “I don’t suggest it is a problem anywhere on the scale that you see in other parts of the world and in Europe. VIPs are a slightly different issue, where we have been doing a lot of active work and have had some successes around closing WhatsApp betting groups, for example, where people are offering gambling illegally; but if you look at what’s proposed, this is about removing friction for people.”

For Miller, who reiterated the GC is not “complacent” to offshore, suggested the drivers for people heading to the black market in the UK was different to elsewhere.

He added: “In terms of the UK primarily, illegal overseas operators are not targeting your average consumer or even your VIP consumers.

“They are targeting people who have self-excluded from gambling. Those are people who have actually chosen not to continue gambling and are not being pushed out because of any regulatory requirements – they actually want to take a break. That is why we are working with a range of partners to address those [non-GAMSTOP] sites.”

On the roster

Back to the six-month pilot scheme, which will be run to eventually decide on the financial thresholds of the upper-level affordability checks. The GC said it will require operators from the three highest bands of operating licence fee categories to take part.

This would “represent a significant proportion of market share”, according to the regulator, but it failed to disclose how many, or even which operators, would be participating.

When pushed on this information, Miller said: “We’re not planning to give more detail on who’s involved in it [and there are] a couple of reasons for that.

“One is that the fee band different operators are in potentially then discloses commercially sensitive information, which we don’t want to do inadvertently through the pilot, so we do need to be mindful of that.

“I think also, in terms of the pilot work working well, what we don’t want to do is inadvertently drive unintended behaviours by providing all of that information. So, we’re being clear about the types of operators, we’ve been clear that actually it will cover a large chunk of the market. But beyond that, I don’t think we’re planning to provide much more information.”

EGR also asked the duo if the pilot scheme had ascertained how many customers or accounts per operator would be assessed or impacted during the period. Previous GC communications had suggested just 0.3% of all accounts would be affected by upper-level checks. Again, Miller said these details were not yet forthcoming.

He explained: “In terms of the number of customers, that’s part of the purpose of the pilot. The white paper set out for the range of checks, the broad percentage of accounts that it was estimating would be captured. That’s one of the things we’re going to want to test. At different levels with different types of data, are you capturing the intended kind of volume of customers? Are you capturing the right accounts?

“If you end up missing accounts that could be experiencing severe harm and dragging in loads of accounts that really you don’t need to be concerned about, then clearly, any final proposals would need to be adjusted to reflect that.”

Fact or friction?

While the GC continues to insist that checks will not be introduced until fully frictionless, there was a caveat to that claim in the announcement yesterday. As detailed in the response document, the GC said: “We have not made final decisions on the financial risk assessments. However, if the pilot progresses well, these would be frictionless checks for the vast majority of customers who undergo them.”

The “vast majority” would suggest there are punters who fall outside of this scope and could face checks that would not be determined as frictionless. EGR put this to the regulator, with Miller responding: “[It is one] of the questions that we’re expecting the pilot to be able to answer. The white paper gave some estimates there.

“We will use the pilot process to understand what types of customers, what volume of customers, if indeed any, are not being captured through a frictionless process that might be required to provide more information if you went down that route.

“Once we have that understanding, then clearly, we can look at if there are adaptions we can make to the design that will actually extend frictionless to wider group of people. Or if are there particular types of consumers that could never be considered in a frictionless way. The pilot will help us understand all these questions.”

When pressed for any projected internal expectations for customers outside of frictionless, Miller said: “We’ve got to approach this with an open mind rather than trying to use the pilot to drive to a particular number or threshold. What we’re doing is using the pilot to help inform any future decision about those things.”

Them’s the rules

The reframing of the sector will also see operators faced with new additions to the Licence Conditions and Codes of Practice (LCCP). With the changes outlined in this first tranche kicking in from August and being implemented through to February 2025, it is a longer-than-usual window for licensees to get their houses in order, according to Rhodes.

The reality, post-February and post-pilot scheme, is that new LCCP requirements could see operators put back under the microscope again for regulatory breaches. The pace of fines and settlements has slowed in recent months, with the GC championing a conducive working relationship with operators to ensure compliance.

Rhodes stressed that while each individual case would need to be treated as such, he issued a clear warning that a LCCP breach is still a breach, regardless of its freshness.

The CEO said: “I won’t get ahead of myself in terms of what happens if somebody is non-compliant because you would have to assess the circumstances. But once a requirement comes into force, you have to be able to comply with it. If you don’t, then clearly the relevant action will take place that depends on the nature of the breach, so I wouldn’t prejudge.

“But, requirements are requirements. Everybody knew this was coming. That’s been well known for quite a long period of time. We’ve given an extended implementation period longer than we normally would to allow people to prepare.

“If we go through implementation and there are some issues, the Commission will do what it always does and consider the evidence being put to us; but as I have said, this is something that’s pretty routinely used.

“Most operators have already got [these checks] as part of either their onboarding or early screening. This is less of an issue in terms of implementation and the timescales are based, in part, on their feedback,” he added.

The post Five things we learned from the Gambling Commission’s media briefing first appeared on EGR Intel.


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