If you read UK newspapers, it can feel as though the writing is on the wall for the Gambling Commission of Great Britain (GC). Rarely a day goes past without its efforts being condemned by one party or another.
But has the GC really run out of steam just 13 years after it was installed as the industry’s regulator via 2005’s Gambling Act?
Only last week, a prominent politician stood up in Parliament to call for the GC’s abolition. Ian Duncan Smith is a senior Conservative Party member, serving as the leader of the party while in opposition between 2001 and 2003.
Addressing Nigel Huddleston, parliamentary under-secretary of state for sport, heritage and tourism at the Department for Digital, Culture, Media and Sport (DCMS) on 8 December, Duncan Smith alluded to “appalling” abuses of VIP schemes by gambling companies before calling for the outright abolition of the GC.
“Is it not now time, instead of looking only at the powers of the Gambling Commission, to get rid of the Gambling Commission altogether and institute a body as powerful as, say, Ofcom [the broadcasting regulator] or all the other bodies that monitor and regulate these industries?” he inquired. “Now is the time to make bold moves, to make sure we get proper control and that the abuses and the addiction end.”
Of course, Duncan Smith is not the first to have proffered this solution to dwindling confidence in GC. The regulator has found itself much maligned over the years, both in the eyes of legislators and the industry itself. Such is the burden of many regulators, who are rarely in a position to completely satisfy either side.
However, the terms of reference of the gambling review do not seem to pose a direct existential threat to the GC at this stage, although the effectiveness of the regulator does come into scope.
Verbatim, the review will assess “the effectiveness of our regulatory system, including the Gambling Commission’s powers and resources to regulate and keep pace with the licensed market and tackle unlicensed operators, and funding flows from the industry to the regulator”.
None of the consultation questions in the review ask whether the GC should be replaced and throughout the terms of reference, the regulator’s efforts to improve its staffing, evidence base for consumer protection and general effectiveness are all highlighted.
One issue that is likely to be high on the agenda is how the GC is funded. Currently, it is funded through licence fees paid by the industry. In 2019-20, it had an income of £19.9m, up from £17.07m in 2014-15. But calls for a more significant industry levy, based on the risk posed by particular games, may see that income rise post-review.
Staffing levels at the regulator have increased from 269 in 2014-15 to 340 at present and a restructure is currently under way to improve the allocation of regulatory resources to the burgeoning online-gambling industry. Clearly, the GC recognises that to stay effective, it has to do more to keep pace.
The GC is often criticised for failing to act more expeditiously to increase player protections around online and mobile gaming. It is true, of course, that since 2005, the online industry has boomed. Smartphones were not on the agenda when the legislation was written.
The first iPhone wasn’t even released until 2007, coincidentally the very year that the GC assumed full powers over the industry. It took the reins from the Gaming Board for Great Britain, which had been in charge of regulation of arcades, betting, bingo, casinos, slot machines and lotteries prior to the implementation of the 2005 Act.
In answering Duncan Smith’s call for wholesale reform of the regulator last week, Huddleston did not give much away. “I am confident that the evidence-led review may reveal further options and avenues”, he said, confirming that “the Gambling Commission’s scope and resources are part of that review.”
In light of all that has gone on this year and is sure to follow, DCMS may not have the stomach for a full-scale overhaul of gambling regulation. To put it in local parlance, it may be seen as “throwing the baby out with the bathwater” – in other words, there is enough good there to make changes only where necessary.
However, loud voices are baying for blood and Duncan Smith is neither the first nor likely the last to suggest that the GC be scrapped. It was in every party’s manifesto at the last election to review the Gambling Act, and as such it can only be assumed that much of the motivation behind it is to please the electorate.
What better way to communicate an effective overhaul of legislation to the lay person than to slap a new label on the regulator? There will be other headline news, of course — changes to the rules around sports sponsorship and deposit and loss limits — but they have just as much potential to irk voters as to please them. Making changes to oversight bodies may seem a more decisive way to protect the public.
At this stage, reform to some degree seems inevitable, with the addition of a consumer-facing body, such as an ombudsman, highly likely to come into the debate. Whether the baby survives the bath remains to be seen.
