David Clifton: Licensing Expert – Those were the forecasts that were

It’s always interesting to look back at my industry forecasts of a year ago to see if I got anything right at all.

So, why don’t you come with me back to my December 2020 article for SBC News entitled “Ten forecasts and a hope for 2021” so we can go through my ten forecasts of a year ago and find out how I did, with my, albeit rather arbitrary, marking system (although you’ll see a common theme emerging with some of the marks):

1. A lesser Gambling Act Review agenda: 0/10

That forecast was based on 2020’s rush of LCCP changes that had already served to considerably reduce what might otherwise have been on the Gambling Act Review agenda. As it turned out, not much has happened this year to cut the agenda down further.

However, that is likely to change imminently as we await publication of the Gambling Commission’s delayed response to its Remote Customer Interaction Consultation and Call for Evidence (which attracted 13,000 responses by the time it closed in February) and anticipated consequential LCCP changes, including in relation to affordability. The Commission said (on 9 December) that this will mean that “all of the Commission’s formal guidance for remote operators on customer interaction will be updated and consolidated into one formal guidance document”.

Does that mean no such updated guidance will be produced for the land-based sector? We await to find out but, in the meantime, this first forecast of mine was not a good one.

2. The Gambling Commission will survive to fight another day: 10/10 

By way of contrast, this was a rather more accurate forecast. In March, Neil McArthur jumped what might have seemed to many at that time a sinking ship as the Football Index debacle gathered pace, ultimately resulting in the regulator’s knuckles being firmly rapped in September. The subsequent recruitment ad for a replacement CEO (as well as that for a new Chair of the Commission) made clear that transformation of the regulatory body was essential.

By July, things were looking better. The then Gambling Minister, John Whittingdale, confirmed that the Commission was “undergoing a reboot” and two months later, Oliver Dowden, the then Culture Secretary, welcomed the Commission’s newly appointed Chair with the words: “new leadership will bring a new direction and focus for the Commission”, adding that this would lead into a “new era of gambling regulation for the digital age”.

Any lingering doubt about the regulator’s future that might have been raised by the Parliamentary All-Party Betting & Gaming Group’s Investigation into the competence and effectiveness of the Gambling Commission (the results of which are presently awaited) was, to all intents and purposes, dispelled by the current Gambling Minister, Chris Philp, at the annual GambleAware conference on 8 December when he praised the Commission for its “excellent work over recent years to protect vulnerable customers”.

3. Compulsory RPT levy: 4/10

This forecast seemed like a surefire bet a year ago. That was not long after the Advisory Board for Safer Gambling had described the current RPT funding model as unviable in the longer term and “no longer fit for purpose”, citing (a)  a lack of transparency and perception of a lack of independence from industry, (b) a lack of equity (in terms of financial contributions) across operators, (c) funding for research and prevention being neither sustainable nor sufficient and (d) treatment services being neither comprehensive nor sufficiently integrated with the NHS. That probability increased even further when, as fully expected, GambleAware came out informal support of a compulsory levy in March

However, the reason I don’t yet score myself any higher is because (a) the previously promised publication of the Gambling Review White Paper proposals is now delayed until next year (and then not before the end of March at the earliest, in my opinion) and (b) my forecast was incorrect as no compulsory RPT levy was imposed last year. As a result, I’m only going to award myself 4 out of 10, but I think those few paltry marks are nevertheless fully justified because my previous forecast remains wholly unchanged for the coming year.

4. Enhanced player protections through technology: 9/10

Last year’s forecast took into account, amongst other things, a recommendation previously made to the Gambling Commission by its Digital Advisory Panel that it should develop its understanding of the technologies being used by its licence holders in order to create regulations that will keep in step with technological advance.

In June, DCMS confirmed the Government’s affirmative response to its proposal to increase the Commission’s fees. One of the principal reasons for this was to enable the regulator to recruit “more specialist technical staff (including a Chief Product Officer) to understand and translate the impact of technological changes, and staff with technical and investigative expertise” on the basis that this would assist the regulator to address the challenge created by “increased technological developments including product and payment innovation”. The Commission’s fees were duly increased in October, so we presently await to see the results that will be derived from that additional fee income.

However, the DAP had also recommended not only (a) regulation of software development techniques for mobile apps and web-based gambling sites that promote addictive and compulsive usage, but also (b) progress by operators of the single customer view initiative in conjunction with research driven by the Commission into markers of harm and specific gambling triggers, “so that this knowledge can be built into this service in the future”, and (c) progress by operators in directing their online advertising, free bets and bonuses away from problem and at-risk gamblers and children.

Taking those recommendations into account, I regard the above high marks as merited by reason of a combination of:

• implementation of new rules for online games design and changes to the design of online slots (announced in February and implemented in October),
•  the Commission’s October update on the Single Customer View industry challenge,
•  the recently announced formation of a BGC Ad-Tech Forum, and
•  the Commission’s imminent updated customer interaction guidance (that is likely to include reference to additional markers of harm and maybe specific gambling triggers too).

5. Greater controls on online gambling accounts: 5/10

We know from comments made by the then Gambling Minister in July that the government has been (a) carefully considering whether further controls for online play (including at account or product level) would be effective in preventing gambling harm and (b) working closely with the Gambling Commission on “its parallel work to improve how operators interact with customers”.

He also confirmed at that time that any new checks that the Commission will introduce “to increase protections for those who are financially vulnerable, binge gambling or losing significant amounts over time” will “harmonise with” the aims of the Government’s own Gambling Act Review. In this latter respect, the newly appointed Minister made it clear in his GambleAware conference speech earlier this month that he wants to make sure the government is “doing much more to protect that minority of gamblers who are suffering life-changing harms and to prevent others from falling into that position”.

Again, because we are still awaiting the White Paper, it’s impossible to properly score this forecast but it remains very firmly unchanged for the upcoming year, so I think half-marks are justified! 

6. Some relaxation of land-based gambling regulatory requirements: 6/10

 Had John Whittingdale remained the Gambling Minister, I would have been scoring this forecast more highly, not least because of his comment in July that in some cases existing restrictions imposed on the land-based casino sector “have become steadily more anomalous, and they clearly need to be updated”, adding that “casinos have been seen to offer a safer environment than almost any other form of gambling …. given the scrutiny of people who are gambling to ensure that they show no sign of having problems, as well as regular intervention and the self-exclusion scheme”.

However, it needs to be borne in mind that during 2021 seven separate land-based casino operators have faced enforcement action for both AML and social responsibility failings.

It appears there will be no greater degree of certainty in relation to the Government’s intentions until the White Paper lands. Nevertheless, I remain optimistic. Given the business disruption caused to all of the land-based gambling sector – i.e. bingo, betting shops and AGCs as well as casinos – over the last couple of years, they certainly deserve some measure of consolation from a regulatory perspective.

7. No affiliate licensing: 5/10

Very little publicity has been given to the subject of affiliates (at least from a regulatory perspective) during the course of this year other than, for example, ASA rulings against 888 Limited in November and Midnite eSports Betting in December.

As a result, in the absence of the White Paper, my forecast can only remain as it was a year ago. So it’s a case of half-marks again. There’s a theme emerging here, isn’t there?

However, before passing on, I would add that I would be much more surprised to see a government proposal to introduce a licensing regime for affiliates than to see a proposal to make changes to the white label regime.

8. Gambling Ombudsman: 7/10

I’m going to be more generous with my self-marking here, even though there has been no official notification yet with regard to the government’s intentions. However, I think a pretty clear indication was given by the then Gambling Minister in July when he said that consumer redress had featured in “a lot of the submissions” in response to the Gambling Review Call for Evidence. That was not surprising, given the clear evidence of public and media support for such a proposal because, as the Minister added, “understandably, concerns have been raised that the current system makes it difficult for individuals to seek compensation or support”.

In the same month, the BGC called on the government to set up a Gambling Ombudsman, its CEO, Michael Dugher, stating in ‘The Times’: “I firmly believe that an ombudsman would significantly improve matters and it’s an idea whose time has come .…. there really is no reason to delay introducing something which will give customers access to a new and improved way of handling complaints”.

I honestly think this is a done deal – hence the rather generous score I have given myself!

9. Advertising and sponsorship: more research: 5/10

As the government stated clearly in its response to the House of Lords Select Committee a year ago, the existing evidence base does not demonstrate a causal link between (a) exposure to gambling advertising that complies with the current rules and (b) problem gambling.

Then in June this year, the then Gambling Minister maintained the same line in Answers to Parliamentary Questions on the subject of gambling advertising. That subsequently gave rise to a spirited exchange of correspondence between him and the Gambling Related Harm APPG on the question whether any evidence of such a causal link does exist.

That debate looks set to continue for a long time yet but I think that, academic or other research aside, politics will play its part in focusing parliamentary attention on whether greater controls will be imposed on gambling advertising in the context of sports sponsorship notwithstanding the introduction in November of revised CAP guidance on ‘Gambling Advertising: Responsibility and Problem Gambling’ (developed in response to the findings within GambleAware research published in March 2020 and entitled ‘The effect of gambling advertising and marketing on children, young people and vulnerable adults’). So it might all boil down to research versus politics – hence my 50/50 score on this one.

10. My firmest forecast of all – all of the above issues will still be the subject of very heated debate as 2021 slips into 2022: 10/10

Even if you disagree with some of my scoring, I imagine you will agree with the above, my final forecast from last year, taking me to a quite respectable total of 61/100!

Just in case you wonder, in this highly unpredictable world in which we all currently live, I’m making no forecasts whatsoever for 2022!

My hope for 2021 (and 2022 too)

The above said, let’s not forget what was my ‘hope for 2021’, namely that the Gambling Act Review will more than live up to the government’s stated ambition to ensure that it achieves “an appropriate balance between consumer freedoms and choice on the one hand, and prevention of harm to vulnerable groups and wider communities on the other”. I’m very certainly happy to carry that hope forward to 2022.

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And finally, just before we move on together to 2022:

Please let me just draw your attention to the following ‘almost final’ UK regulatory developments of this year:

1. Keep an eye on the 9 February 2022 deadline date to respond to the Gambling Commission’s Consultation on changes and updates to its Licensing, Compliance, and Enforcement Policy.
2. Check out the 25 November 2021 speech by the Deputy CEO of the Commission at the Bacta Annual Convention when she summarised current regulatory priorities including collection of participation & prevalence statistics.
3. Of interest is the refined list of gambling reform demands being pursued by the Gambling Related Harm APPG and Peers for Gambling Reform but I think it’s premature to expect that list to remain so confined as time goes by next year.
4. Very important AML and social responsibility learning is to be derived from the Greentube Regulatory Settlement, the regulatory sanctions imposed on Buzz Bingo and the report by the Commission on the conclusion of its investigation into IMME Limited.
5. Definitely worth reading are the keynote speeches delivered by (a) Gambling Minister, Chris Philp, and (b) Gambling Commission CEO, Andrew Rhodes, at the 9^th Annual GambleAware Conference. Of particular note was the former’s reference to the need for affordability checks to be proportionate “because people’s circumstances differ”, adding comment that “demanding payslips or bank statements from every customer spending £100 or so is likely to be unwelcome, disruptive and disproportionate to the risks”.

6. Please do not under any circumstances ignore the essential reading material for all UK licensed gambling operators and suppliers that is contained within the Gambling Commission’s Annual Compliance and Enforcement Report for 2020-21 – in my opinion, significantly less coherently structured than previous editions and flawed by the absence thi time around of critical material on ‘Customer Interaction/Social Responsibility’ and ‘Triggers/Social Responsibility’. That is not least because these are areas in which considerably greater clarity with regard to the Commission’s current and future expectations of its licensees is required.
7. You will note that I have used the phrase “almost final UK regulatory developments of this year”. That is because it remains possible that, this side of the New Year, we may yet see the above-mentioned material missing from the Commission’s Compliance and Enforcement Report. That is because it may appear within (a) its forthcoming Response to its Remote Customer Interaction Consultation and Call for Evidence and (b) any accompanying notification of future LCCP changes and updated Customer Interaction Guidance. We may also see a fresh Commission consultation on thresholds for identifying key financial risks in terms of ‘significant losses in a very short time, significant losses over time and financial vulnerability’ as flagged up by the Commission’s Executive Director, Tim Miller, at the KnowNow Annual Conference back in September.

8. Showing little sign of compromise any time soon is the continuing difference of opinion between the BGC and the Gambling Commission over the illegal black market threat.

Whatever 2022 may bring, I wish a Happy New Year to all!

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David Clifton Director Clifton Davies