Slot Gods on Andrew Rhodes’ 13 May 2024 speech in London
On 13 May 2024, Andrew Rhodes, CEO of the UK Gambling Commission (UKGC), spoke at the Westminster Media Forum, updating attendees on the progress of the Gambling White Paper recommendations and implementation.
During the speech, Rhodes discussed the current state of the UK gambling industry, which is now the “largest regulated online gambling market in the world” with a gross yearly value of £15 billion. He also spoke of recent compliance improvements (in 2022-23, the UKGC fined operators a total of £60 million) and how and when the new rules for game design and financial risk assessments will be implemented.
Tackling illegal online gambling
Interestingly, Rhodes used almost a third of his speech to discuss the Commission's work targeting illegal online gambling – a major ongoing objective.
So, what did he have to say?
According to Rhodes, the Commission’s new approach to illegal gambling is to “undertake high impact interventions, to disrupt unlicensed operators”, making it harder to offer unlawful gambling at scale.
Where possible, the Commission is taking a combined approach, working with the National Crime Agency (NCA), Police Intellectual Property Crime Unit (PIPCU), and His Majesty's Revenue and Customs (HMRC). This is leading to "risk-based, high-impact, upstream disruption outcomes” that are designed to restrict supply and access to illegal gambling.
Essentially, the Commission has been using tech to identify the largest (riskiest) illegal gambling sites and requesting their removal. They have also been working with other service providers, including payment systems, banks, search engines, social media, and UK-licensed software providers, to ensure they are not facilitating illegal gambling by providing services on these platforms.
Lastly, the Commission is also reviewing online content – advertorials and affiliates – and requesting the removal of anything that recommends or advertises illegal gambling services.
What has the Commission achieved?
Mr Rhodes said that the actions taken by the Commission to disrupt illegal gambling upstream have resulted in:
98 cease and desist and disruption notices issued in January 2024 with 39 successful disruption outcomes.
In the 6 months to May 2024 over 7,000 website URLs were referred to Google, resulting in them being removed from search results.
In 2023, the Commission issued 452 cease and desist and disruption notices. This included 291 cease and desists notices to illegal websites and 161 referred to Facebook for closure, resulting in 212 instances where supply was disrupted (79 online websites and 133 Facebook closures) .
Since 2022, UKGC enforcement activity has increased by over 500% – from 89 in 2021-22 to 452 in 2022-23.
Treble the number of successful, positive illegal website disruption outcomes – from 25 in 2021-22 to 79 in 2022-23.
These figures highlight both the good and bad.
Firstly, they show how much the Commission has ramped up its efforts – fantastic – but it also reveals just how little the UKGC was doing pre-2021 to fight illegal gambling sites and protect the legal market. Meaning, of course, that the interests of legitimate operators, paying for the privilege of access to this market, were being underserved until relatively recently.
In terms of how effective the UKGC’s actions are, in 2023, cease and desist orders had a 46% success rate in disrupting operations (212 out of 452), while at the start of 2024, this fell to 38% (39 of 98). Thus, even when threatened with potential legal action, less than half of illegal operators take note.
Disrupting, not stopping
Mr Rhodes used the word “disrupt” more than ten times when discussing the Commission’s new policy – a very prudent choice of words. It highlights the reality that even when an illegal website is taken down, statistics show it takes as little as 30 minutes to half a day to migrate a site and set it up again using a new URL. The choice of vocabulary acknowledges that the Commission cannot currently, nor will it likely, be able to stop illegal operators in the near future.
While we don’t mean to criticise the Commission’s efforts overly, and obviously, we always welcome enforcement action against illegal operators, it's an almost impossible fight in a country that allows gambling websites. It’s an irony of sorts that countries where gambling is not legal, simply banning all gambling URLs does the job. Those authorities have an easier job as they don’t need to distinguish between legal and illegal and can use stronger, blanket enforcement measures.
Proactive, not reactive
Clearly, the Commission needs greater powers to tackle illegal gambling effectively. That said, one element that does stand out, and for all the right reasons, is the change in stance from reactive to proactive. This is becoming more visible in many of the Commission’s recent policies and aligns with player protection as it is about acting before harms occur rather than after.
Moreover, we have to acknowledge that an upstream, collaborative approach is definitely the right one when it comes to tackling illegal gambling. However, whether other services are motivated to get on board is questionable as it means compromising what is, in many cases, a significant stream of revenue.
So, let’s consider why Mr Rhodes and the UKGC are now placing so much emphasis on a seemingly impossible task.
Motivations
The Commission is clamping down on illegal gambling. The announcement of specific Gambling Act review measures on stake limits and affordability checks are considered too restrictive by many within the industry. Indeed, it can confidently be argued that the proposed affordability checks border on infringing upon personal freedoms. Critics of both measures argue they are likely to push players offshore into more dangerous situations instead of achieving the purpose of offering greater protections.
Operators have cited both research and cases in other European countries where similar rules have caused an uptick of up to 90% in illegal gambling participation.
In our view, the Commission must also be seen as taking action so that the UK market remains attractive to operators, especially in the face of compliance fines and new regulations that verge on creating a hostile environment for legal operators. These could incentivise offshore operations or encourage them to look at licensing in other, more friendly countries.
What else was worth noting?
As a straight shooter and seasoned industry expert (and probably anticipating criticisms such as those we’ve highlighted around the Commission's approach to tackling illegal gambling), Rhodes rounded up his speech by tipping his hat to the new UKGC three-year Corporate Strategy.
In particular, the Commission is focusing on “improving the way we work,” including a “review of our people plan, approach to stakeholder engagement, and ensuring we have the right resources to regulate efficiently".
Last thoughts
The key takeaways from Rhodes' speech are that the Commission is doing more to address the concerns of gambling operators and other stakeholders and that no matter how difficult the task, under Rhodes’s leadership, they will be tackling it head on.
However, as this policy currently stands, we don’t see it delivering long-term benefits unless there are more robust measures and more vigorous enforcement options available to the UKGC.