White Paper delivers substantial reform, gambling industry already pushing back
With the dust having settled following the publication of the government's long awaited White Paper on gambling reform, it is fair to conclude that the policies announced represent a big step forward. As I told Sky News shortly after the Secretary of State summarised the government's response to its gambling review in the House of Commons, the White Paper contains most of the reforms that Clean Up Gambling has pushed for, alongside other campaigners. It includes many more than those summarised here, but these reflect our priorities in the review.
There will be a statutory levy on gambling operators to pay for research, education and treatment, which will be administered independent of the industry. This will likely raise around £150 million a year, and comes in spite of aggressive lobbying by the Betting and Gaming Council (BGC) opposing its introduction, in favour of maintaining the voluntary system that has enabled the sector to control where funding goes. A government consultation on the levy's implementation will commence in the summer of 2023, with DCMS Minister Stuart Andrew recently committing to an implementation timeframe of a year.
There will be affordability checks for online gambling, with financial risk checks at much lower levels of spend. Again, the BGC lobbied aggressively against what it called "blanket checks", instead arguing in favour of, somehow, entrusting operators to use technology to spot people who are addicted and intervene in some unspecified way. Instead, affordability metrics will be requested if losses exceed £1,000 in a day or £2,000 within 3 months. The thresholds will be set at lower levels for those under 25, and DCMS estimates checks will impact around 3% of gamblers online. As I wrote in The Guardian, this is a sector that derives 86% of its profit from the 5% of people who are addicted or at risk, so these thresholds appear to be in the right ballpark. A Gambling Commission consultation will commence in the summer of 2023, with the process usually spanning a year before implementation.
Affordability data will be shared across operators using a system called the Single Customer View. This data must not be used for commercial purposes. To this end, the Gambling Commission will have better access to operator data to assess compliance, and more resources to ensure delivery on its responsibilities including monitoring and tackling illegal gambling. There will be a government consultation on reviewing the Gambling Commission's budget in 2024.
Stake limits will be introduced for online slots to bring them more into line with the land-based sector. The government will consult on a limit of between £2 and £15 per spin. For under 25s, the options will be a £2 limit, a £4 limit, or an approach based on individual risk. Given FOBTs are capped at £2 a spin, and most land-based machines are £1 or less, there is no jusitification for stakes online in excess of £2. And given the accessibility of online slots by comparison, and that the terms of reference for the government's review sought to bring "analogue laws into the digital age", a £15 stake is inconceivable. According to Gambling Commission Risk Based Algorithm Data, 52% of those gambling at stakes of between £2 and £5 were flagged as at-risk. Given the stake limit will ultimately be a decision for Parliament given its implementation will require secondary legislation, the influence of the All Party Parliamentary Group on Gambling Related Harm and Peers for Gambling Reform, as well as the strength of the evidence, mean £2 is a plausible outcome. The government will commence a consultation on this in summer 2023 and that process should conclude within a year.
A consumer ombudsman will also be established in conjunction with the industry, although there will be the option to put this on a statutory footing if it fails to deliver. An outcome that would be in keeping with everything else the gambling industry does voluntarily.
The disappointing omission from Clean Up Gambling's perspective is in relation to advertising, promotion and sponsorship. While the work of The Big Step and the Coalition Against Gambling Ads ultimately pressured the Premier League into agreeing to ban front-of-shirt gambling sponsors, the government could have gone much further. Were it not for vested interests beyond the gambling industry, such as in sport and the media, lobbying against reform then perhaps DCMS might have. In any case, their proposed reforms to the sector will at least make the industry safer given the promotion of it will continue.
Direct marketing, such as bonuses and free bets, will however be consulted on this year to ensure they are operated in a socially responsible way. We would like to see the ICO's investigation into gambling industry data abuse feed into that, as our research revealed one operator's extensive behavioural profiling and targeting of consumers likely to be experiencing harm. Inducements to stimulate engagement directed toward those known to be at-risk, so-called "dark nudges", should not be permitted and these run entirely contrary to any notion of safer gambling.
The BGC has used every trick in the book in an attempt to stifle reform, so it was interesting to see them "welcome" the White Paper. They also lamented the "polarised" debate on gambling. Having called any proponents of reform "anti gambling prohibitionists", they shouldn't need to wonder for too long who's responsible for that.
Their tactics in this review have been very interesting to observe. Any campaigners have been labelled prohibitionists, or painted as extremists, despite our proposals for reform garnering overwhelming public support and our priorities framing the review itself. Clearly it's not "prohibitionist" to argue for more consumer protection regulation. Nor have we ever argued for "intrusive" affordability checks at low levels. We wanted an honest debate, in good faith, on what the loss thresholds should be where income data should be assessed in a frictionless manner, possibly through open banking platforms already in development by industry suppliers. Given there are already requirements for operators to do these checks, for both social responsibility and anti-money laundering purposes, we were proposing a solution which could codify a standardised process so as not to put any operator at a commercial disadvantage for good compliance.
But the BGC saw fit to describe anyone proposing an affordability model, such as the Social Market Foundation, a "nanny statist" on the basis such a system would protect consumers from excessive losses. At every point, there has been a failure to engage with the substance of the agenda in good faith. Those they view as their opponents have been consistently misrepresented, and this has ultimately been at the expense of their sector's interests. Either the BGC wanted to create a radical 'straw man' opposition to delegitimise their opponents (which failed), or they did so in order to say to their members, funders and the public: "look, we stopped the worst from happening". In which case, all they succeeded in doing was creating the political space for the reforms announced in the White Paper to appear moderate when they are substantive. And while they may not wish to concede defeat, their surrogates are already lobbying against the statutory levy, and one of their biggest members has revived its astroturfing campaign to push back against affordability checks and stake limits.
The gambling industry made a mistake appointing a bunch of reputation managers to run their self-described "standards body". They shouldn't be surprised that the reputation these people care about most are their own personal ones. They are not experts in gambling, and certainly don't care about those harmed by it.
For this reason, the BGC avoided engaging in a sophisticated policy debate, reducing their position to soundbites and their strategy to increasing MP hospitality spend by a factor of 10. One of their leading Parliamentary advocates is under investigation for getting caught up in a Times sting where he offered to lobby Ministers on behalf of someone posing as an investor in the gambling industry.
These lobbyists should have a very scaled down influence on the implementation phase of this review. The government and the Gambling Commission's response to the consultations should be evidence-based policy, untainted by industry influence as the representatives of this sector have shown themselves to be unable or unwilling to engage in good faith.
The online gambling sector is at a crossroads: either it grows up and carries itself like other public companies in established industries, or it continues down a path of trying to revive "the good old days" when regulation and compliance didn't matter because they were in an offshore tax haven. Some still are, mind!
If the gambling industry's "standards body" won't be the critical friend the sector needs, then operators must stop treating everyone advocating for reform as a prohibitionist. Failing to come to terms with the urgent need for the changes proposed in the White Paper will only create bigger problems for the industry further down the line.
Pressure from Clean Up Gambling on government will continue in order to ensure the reforms are delivered within the advised timeline. We will keep you abreast of how to respond to the consultations as they are published.
Thanks for your continued support