“Storm clouds” are gathering over the industry and are in danger of bursting – so said the Gambling Commission’s representative at an industry conference last month.
Just a couple of weeks earlier, the Gambling Commission’s executive director confidently predicted, at a seperate industry conference, that the escalation of Gambling Commission fines, which have increased more than eleven-fold from £1.6m to £18m in the last year, is set to continue.
These are portentous statements, and the message for the gambling industry in the UK is clear. Regulation has become tougher, and it will continue to get tougher, unless and until the industry can bring about change in the current negative public, political and regulatory narrative.
The Gambling Commission’s warnings come on the back of a stream of sensationalist headlines from the mainstream press – the Sunday Times front page headline “Gambling sites forced to stop luring children” being one example. With public concern having been whipped up and put in the spotlight by press campaigns, MPs have also become increasingly engaged in anti-gambling rhetoric and policymaking.
To complete this connected cycle of events, regulatory authorities including the Gambling Commission, the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA), have come down hard on the industry with concrete regulatory action.
This has included CMA undertakings on bonus promotions, wagering requirements and restrictions on withdrawals, tougher new UK gambling advertising standards and a number of harsh ASA rulings.
Most topically, the Gambling Commission’s new Social Responsibility Code provisions came into force on 31 October. These new requirements mean that (among other things) a breach of the UK advertising codes, or sending direct e-marketing without specific and informed consent, will constitute a breach of the operator’s gambling licence.
A breach opens up the full range of regulatory sanctions including unlimited fines and licence suspension and revocation, which stands regardless of whether the offending activity was conducted by the operator itself, or by an affiliate without the operator’s approval.
In the press and in Parliament, the principal area of focus is currently pre-watershed gambling advertising on television, mirroring similar campaigns in Australia, Belgium and Spain – and, of course, in Italy, where a far broader blanket ban will soon come into force.
It must be said that the gambling industry has not been an entirely innocent victim. I think many readers would concede that parts of our industry have been slow to react to regulatory mood music over a period of time, have not always reached the high standards of compliance they would expect of themselves, and have not necessary helped themselves in the way they have sought to justify certain activities – the FOBT maximum stakes debate being an example of the latter.
Making progress
However, the industry’s tone and approach has changed markedly over the last year, with abundant examples of lessons having been learnt. From what I have seen, the industry has increased its focus on compliance yet further, increased its emphasis on (and investment in) responsible gambling, and is taking more positive steps to influence the debate, including offering qualified support to the idea of tighter restrictions on pre-watershed television advertising.
The industry has got the message, and is working hard to improve its image. If it is to succeed in doing that, and go the way of the alcohol industry rather than the tobacco industry, it will need objectivity and rational, evidence-based decision making from those that matter most.
That may be too much to expect from certain elements of the mainstream press in the short term, but it should not be too much to ask of the regulators. In Britain, the Gambling Commission should support the industry not just to comply but also to grow, and should regulate in a proportionate and risk-based way. Now more than ever it is crucial for the industry that the Gambling Commission keeps those principles in mind.
One area where this will be particularly pertinent is in enforcing the new social responsibility code relating to breaches of the advertising codes. The ASA’s decision-making process is designed in the context of its own relatively limited sanctioning powers, and can throw out unpredictable and somewhat subjective results. It is therefore crucial that the Gambling Commission takes a selective and proportionate approach to pursuing operators for adverse ASA rulings. The Commission has said it will do just that, which is a positive sign.
There are other ways in which the Gambling Commission could contribute to the restoration of objectivity and evidence-based decision making in public debate. As well as pre-watershed television advertising, there has been vociferous criticism of the use of cartoon characters in games. What these two issues have in common is they are easy targets for the press and politicians: they look bad. But are they actually the areas in which regulators should be concentrating their resources, when there is little evidence of them causing harm?
Public concern about pre-watershed gambling advertising on television and its effect on children is genuine. However, according to Ofcom’s November 2017 report into media use and attitudes amongst children and parents, children aged 5-15 spend on average 14 hours per week watching television, compared to over 40 hours on the internet, mobile or gaming.
In a similar vein, do cartoon characters actually encourage children to start gambling, or are they rather less likely to appeal to 12-17 year olds who may be more drawn to content that is more “grown-up”?
Surely the best way to protect the young and vulnerable is not to get carried away with areas of press focus, but rather to maintain an objective, evidence-based approach and divert regulatory resources to areas which could be much more significant in minimising harm – unregulated skins betting, for example.
With the enforcement stakes being raised to unprecedented levels, the actions of the regulator — not just the industry — will come under increasing scrutiny.
Andy Danson is a partner in the commercial department at Bird & Bird and a member of the law firm’s media, entertainment and sport group based in London.