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A response to the Gambling Commission CEO's speech at ICE 2024

A response to the Gambling Commission CEO's speech at ICE 2024
Paul Clare
by Paul Clare Last updated:

The Gambling Commission’s interim Chief Executive Andrew Rhodes recently addressed several key issues around gambling regulations. In his speech at the Consumer Protection Zone at ICE 2024 (International Casino Exhibition) in early February, Rhodes outlined likely upcoming regulatory changes for the sector.

As the Commission moves forward with last year's government White Paper recommendations, Rhodes set out to give delegates an update. 

While the open dialogue with Rhodes is broadly helpful in giving industry representatives access to the regulator, there were a number of points in his speech we thought warranted comment

We consider...

  • Financial checks
  • Unlicensed / illegal operators
  • Gambling Survey of Great Britain

...and possible impacts on the industry.

Financial risk checks

Rhodes reported that financial risk checks was one of the most talked about proposals in the White Paper – player checks conducted by operators in a bid to ensure their customers are on a sound financial footing to gamble. 

However, despite lively debate around the wisdom and practicalities of mandating the checks, Rhodes said recommendations for financial risk checks would be carried forward. 

“We hope to be publishing next steps on Financial Risk Checks and other areas that we consulted on last Summer in the coming weeks. What I can say now though is that should we be in a position to take recommendations for Financial Risk Checks forward and of course, we are committed to a sensible implementation approach, such as phased implementation and use of pilots, to help ensure that they would be introduced smoothly for customers.”

The financial risk checks proposals, particularly controversial with operators, will likely kick in from a £125 net player loss – effectively forcing operators to conduct a financial risk assessment on players from this level. While the Commission has said that this can be a simple credit check in most cases, there are concerns about the administrative burden this would place on the industry, particularly in cases where no credit profile exists.

Operators understandably want to avoid having to carry out these assessments, with the associated costs, not to mention the likely revenue impact. Many voices in the industry have correctly pointed out that financial risk checks are also likely to be off-putting for customers, the vast majority of whom gamble responsibly within their means. Many players will also feel this is another example of 'powers-that-be' overreach.

While the Commission likes to stress that these will be light touch, minimally invasive checks, alarm bells are ringing throughout the regulated sector. Operators are already waiting with bated breath to see the precise shape and nature of the new measures coming down the track.

This issue looks set to run and run. Nevin Truesdale, CEO of the Jockey Club has described financial risk or affordability checks as "state overreach" – correctly pointing out that there are no financial checks on what people spend on a meal out, clothing or shoes. So why gambling? It seems unlikely Truesdale is set to give in any time soon.

Challenging illegal operators – or helping them?

Rhodes is also at pains to reiterate the Commission’s view that the White Paper is about achieving balance. While he says it's clear there is “work to do, in terms of preventing gambling harms and minimising risk”, he said the proposed increased burden of regulation does not “radically shut down industry’s ability to innovate or to compete".

No one doubts the aims of the White Paper review are laudable. Gambling regulation is indeed all about balance. It’s crucial that the laws give appropriate weight to the need to prevent harm and the need for freedom of commerce. But to say the new proposals won't impact the industry’s ability to innovate and compete is arguably a stretch, given the weight of measures proposed.

The legal gambling sector in the UK only works when regulation is tolerable – for both operators and players. While the Gambling Commission might not like it, an illegal sector does exist. And as has been seen from the experience of over-regulation in markets like Germany, both operators and players are prepared to move to the unregulated sector when the burden of regulation becomes too restrictive. 

The heavier the hand, the greater the incentive for – and likelihood of – operators and players moving away from the UK gambling sector. While the Gambling Commission likes to think it has powers at its disposal to tackle the problem, the global nature of the Internet means this is a battle they are unlikely to win. And when players move into the illegal sector, as has been seen in other markets, the whole system of player protections and safeguards is moot. 

While Rhodes correctly identifies the need to protect those vulnerable to problem gambling through regulation, there is a danger that ever-increasing regulation, and indeed over-regulation, could ultimately generate more problems than it solves. 

The Gambling Survey of Great Britain

Rhodes also reflected on the upcoming Gambling Survey of Great Britain, which is set to publish its findings soon. A fully independent review of gambling in the UK, the survey aims to present a comprehensive set of data – evidence Rhodes suggests could ultimately help inform policy-making decisions.

At the moment, it is unclear what the Gambling Survey will show. But the statistics we already have paint a clear picture. 44% of the adult population – around 22.5 million people – gamble in some capacity each year. These are figures Rhodes cited in his own speech. 

The government’s Gambling Harms Evidence Review estimated the rates of problem gambling at just 0.5% of the adult population – very much a small tip on a large iceberg.

While there are very good reasons to do more to tackle problem gambling, especially given the scale of the impact these problems can have, it’s worth remembering that this is not a problem of scale. Babies need not be thrown out with bathwater to get results – especially when the current system would seem, statistically at least, to be working well. 

As one of the world’s largest legal online gambling markets, the UK has a lot to teach other countries when it comes to finding the balance. Even in its current form, UK gambling regulation works well. Harmful gambling affects a tiny minority of gamblers – albeit with some fairly stringent regulation already keeping the industry in place. 

The danger is that the further this goes, the less effective these structures become. 

Paul Clare
by Paul Clare Last updated:

Paul spent plenty of time in arcades up and down the UK discovering all of the best fruit machines and watching them grow into the incredible online slots we see today. He still loves the basic format but also has a soft spot for games with big bonus rounds that progress as you play. Immortal Romance is one of his favourite slots of all time.