Has regulatory enforcement in the gambling industry become too strict?

This morning, on the first day of ICE Vox, David Clifton joined the following industry leaders to debate the first Counsel stream motion – “Stricter regulatory enforcement makes consumer protection impossible. Operators must self-regulate instead”:

  • Philip Bowcock, CEO, William Hill,
  • Paris Smith, CEO, Pinnacle,
  • Martin Lycka, Director of Regulatory Affairs, GVC Group,
  • Dion Croom, Chairman, Habet Addiction Healthcare Limited and
  • Richard Flint, Executive Chairman, Sky Betting and Gaming (pictured below to the right of David)

The main focus of the debate was whether regulatory enforcement in the gambling industry has become too strict, but this necessarily involved discussion about whether regulation – in the sense of regulatory standards – has itself become too strict.

David (pictured above speaking at the debate) opposed the motion. His views are that:

  1. Regulatory standards are much stricter now than they were in the early 1980s when he started advising the then entirely land-based gambling industry, at which time AML and social responsibility hadn’t seen the light of day and gambling advertising was essentially prohibited.
  2. However, he doubts whether enforcement of regulatory standards now is any more strict that it was then; indeed, the Gambling Commission’s predecessor, the Gaming Board for Great Britain, had only the nuclear option of licence revocation, which it did exercise against both operators and individuals
  3. Whilst it might now appear to some UK licensed operators that regulatory enforcement has become too strict, that may be because it is only in the last 5 or 6 years that the Gambling Commission has most noticeably increased the level of both its enforcement activity and the financial sanctions it imposes on non-compliant operators
  4. This became most notably so when Sarah Harrison became its CEO in late 2015, by which time a false sense of security may have set in within the industry, leading to complacency on the part of some operators
  5. With the benefit of hindsight, the regulator should perhaps have been setting the bar higher from the outset in 2007:
    • cracking down harder and earlier on non-compliant operators,
    • properly understanding online gambling when it was first empowered to regulate it,
    • not waiting 6 years before it started enforcing the Money Laundering Regulations,
    • making clearer from the outset its own expectations in terms of socially responsible gambling
    • working in closer collaboration with the industry back then to achieve those expectations and
    • not carrying out compliance inspections, confirming satisfaction with the same and then just months later, commencing formal investigations for alleged failings on the very same systems and controls that had so recently been found to be satisfactory
  6. However, it is easy to be wise after the event and the fact is that it has taken eye-watering fines and the threat of revocation of PMLs to get some operators to fully appreciate the need to raise regulatory standards
  7. Well-advised gambling operators do now know what to expect in terms of sanctions for regulatory failings because, in the UK at least, the regulator has made that clear
  8. It’s a shame it took a regulatory stick rather than carrot to get to that level of appreciation although, unfortunately, there are still some operators against whom that stick may still need to be wielded
  9. Whilst regulatory enforcement is most certainly strict, it has not yet become too strict
  10. The likes of William Hill, GVC, Sky Betting & Gaming and members of NCF (the UK’s land-based casino trade association) are be applauded for leading the way in raising responsible gambling standards and
  11. Perhaps there is something for regulators in newer gambling jurisdictions to learn from all of this (and indeed in older jurisdictions who have not yet fully embraced the concept of responsible gambling)

Some of the comments made by David during the debate are quoted in an iGaming Business article entitled “Cooperation and clarity key on day one of ICE VOX 2019” (that can be downloaded below).

Comments by Philip Bowcock about over-regulation following the debate form the subject-matter of a Gambling Compliance article entitled “Will Hill’s Bowcock Warns Regulator Not To Drive Industry ‘Underground’.

The day ended on a less contentious note with a World Regulatory Assembly cocktail reception at the National Gallery, supported by the International Association of Gaming Advisors (of which David Clifton and Suzanne Davies are active mebers), the International Association  of Gaming Regulators, the European Casino Association, the National Casino Forum and the Remote Gambling Association. David (first left in the below photograph) and Suzanne (third left below) attended the reception.

They are pictured with Mark Clayton (second left above), Co-Chair of the Global Gaming Practice at Greenberg Traurig in Las Vegas, and Dee Maher (on the right above), Chief Legal & Risk Officer at Betpoint Group in Malta.