The recent announcement from the UK government of the new board at the Gambling Commission was very strong on the great and the good, but not so great and good when it came to having any prior knowledge of the industry they are hoping to oversee.
Among the luminaries are an anti-corruption expert and economic-crimes lawyer (Lloydette Bai-Marrow), the ex-chief executive of The Pensions Regulator (Charles Counsell OBE), an international lawyer, consultant, and current board member of the Human Tissue Authority (Helen Dodds), the executive director of Risk and Compliance Oversight at the Financial Conduct Authority (Sheree Howard), a criminal lawyer who has prosecuted drug, tax, and money-laundering offenses for the Revenue and Customs Prosecutions Office and fraudulent trading offenses for the Department for Business (Claudia Mortimore), the chair of NHS Professionals Ltd and chair of the Chartered Insurance Institute (Helen Phillips), and a former senior civil servant from the Department for Culture, Media and Sport (David Rossington CB).
Given these commissioners, an observer would struggle to identify the sector they were set to oversee. Certainly – and this might be doing the individuals an injustice – it seems unlikely the new commissioners (Rossington aside, maybe) have much by the way of a working knowledge of any aspect of the gambling industry.
Does this matter? In a sense, no. Their job, after all, is to oversee the work of the Gambling Commission itself.
But in a wider sense, the industry will be right to be dismayed that none of its eminences – whether currently or formerly part of the industry – have been called upon to play a role. And while the announcement came from the government, it certainly has the fingerprints of the UK Gambling Commission all over it.
Speaking after the Reputation Matters event that took place in London in late October, Dan Waugh, partner at the gambling-industry consultancy Regulus Partners, said one of his takeaways from the afternoon of discussion was that “very few people seem to trust or respect the Commission these days.”
He points out that this wasn’t always the case. Back when the Commission was led by Philip Graf, then Jenny Williams and Sarah Harrison, the Commission was “not always liked, but it was respected.”
“The lawyers are a good barometer and they’re fairly open in their criticism compared with earlier years,” he adds. “Under Williams and Harrison, things were much more constructive. The Commission in those days listened to licensees and lawyers.”
The rest is politics
For Waugh, the issue is the extent to which the Commission is now becoming a political animal.
“It no longer seeks to execute its statutory duties in a morally neutral manner,” he argues. “Instead, it wishes to reinterpret its role through the lens of critical social-justice theory or public health. This has led it into trouble.”
The latest flashpoint between the industry and the Commission remains the soon-to-end consultation on the introduction of financial-risk checks. For Peter Hannibal, chief executive of the Gambling Business Group, the mess over the meaning of frictionless checks is one of their own making.
“There is some confusion over the Commission repeatedly saying, ‘The consultation is not about whether affordability checks are to become regulation, but about how,’” he says. “Yet conversations held by the Minister and the content of the recent Westminster debate have been very much about not imposing them unless they’re proven to be ‘frictionless.’ This disconnect does the GC’s reputation no good at all.”
Worse, perhaps, than the perception that the Commission might not be dealing from the top of the deck is that once again, it has adopted an antagonistic stance with regard to the industry it oversees.
“Its dogmatism has got in the way of effective engagement with its licensees,” says Waugh. “And it has led to situations where the Commission’s behavior has been inconsistent with the Regulators’ Code, as well as its statutory duties. It has also created a situation where the Commission is no longer willing to admit error – and this is disastrous for trust.”
Some optimism was expressed at the event that the relations between the industry and its regulator are improving, but as Waugh says, this is “relative to a dismal nadir.”
Specifically, questions remain over whether the Commission has treated data presented either in its name or at the very least with a nod of approval.
“Whilst the GC’s outward optics may appear to be looking better, we still see the old culture prevalent in their dogmatic pursuit of affordability checks (despite what the evidence, the public, and Westminster is telling them) and their decision to effectively ignore the responses to their recent consultation on the reporting of suicides, only to go ahead and impose it anyway,” says Hannibal.
Waugh agrees. “The Commission has created situations where it has undeniably misrepresented evidence, sought to mislead the government, or been complicit in the dissemination of misinformation.”
Such is the backdrop for the selection of new commissioners. Welcome to the sector and its discontents.