Gambling Commission FOIA responses attract effective evaluation criticism from GBG

Gambling Business Group (“GBG”) describes itself as “a group of like-minded business people with an interest or stake in the UK Gambling Industry, having the common goal of improving the business environment for all and protecting member organisations from adverse or undue external influence on the health of their business. Our modus operandi is not to duplicate or replicate the activities of the traditional trade associations, but to champion causes and address issues and challenges that reach across each of the UK gambling sectors”.

As reported on its website, GBG has received from the Gambling Commission the following responses to its Freedom of Information Act requests:

Request 1: A transparent list of all financial penalties and voluntary settlements made by Licensees as a consequence of regulatory enforcement/investigations between June 2014 and December 2019

Response 1: 

Please see attached table for your perusal.

Request 2: A similar list confirming which Research, Education and Treatment organisations these funds have been allocated to, for what purpose, identifying what proportion (if any) was retained by the Gambling Commission to cover expenses in each case.

Response 2 :

Funds from regulatory settlements can include commitments and undertakings as well as a payment in lieu of financial penalty. This may include up to 3 sub-elements depending on the circumstances of the case. These are:

  • divestment back to individuals impacted by the operator’s non-compliance with regulatory requirements. This is usually the customer or a victim of crime, where such victims can be identified. This could be for example, where an individual has stolen from their employer and has spent the money gambling and the operator has not met the regulatory requirements.
  • payments made to organisations for social responsibility purposes
  • recovery of the Gambling Commission’s costs.

This allocation breakdown is also set out in the attached table.

Pre-2019, in relation to organisations for socially responsible purposes, most settlements have gone to GambleAware. On our website we publish details of the destinations of funds generated from regulatory settlements that have been approved during 2019/20.

Request 3: As per your own Statement of Principles for determining financial penalties June 2017 doc, Point 2.14.ix. For each of the fund allocations…….a meaningful evaluation of the effectiveness of projects or research funded by a specific regulatory settlements.

Response 3:

In determining destinations of regulatory settlements, the Commission considers whether there will be meaningful evaluation and whether these will be published. Most of these projects in receipt of regulatory settlements, that are complete, are already in the public domain and organisations disseminate the outcomes of work particularly where there is a research or evaluation output.

There is not a requirement for evaluations to be submitted to the Gambling Commission. Therefore, we do not hold information in relation to this part of your request.

Commenting on the Gambling Commission’s responses, Peter Hannibal, Chief Executive of Gambling Business Group, has said:

Following a Freedom of Information (FOI) request asking for information relating to the value and allocation of funds raised through Voluntary Settlements, the Gambling Commission has responded below and in the attached spreadsheet.

As we know, the future funding of Research Education and Treatment (RET) is a subject that is embroiled in a political tug-of-war and currently remains far from resolved. However, one of the few things that all stakeholders in UK Gambling can agree on is that all RET financial resources are vitally important and should be spent where they are most effective in reducing and preventing harm being caused by engaging in gambling. Whether these funds are raised through donations, or via a levy, or as in this case through financial penalties, all of the funds are equally valuable.

The headlines from the attached spreadsheet are as follows:

  • The GC have agreed to £58,946,578 worth of financial sanctions over a five and a half year period between June 2014 and December 2019.
  • As is their prerogative, the GC has taken £756,997 from these funds to cover their own (not unreasonable) costs in carrying out the investigations.
  • Some £24m of the penalties has been repatriated with those who have fell victim to illegal gambling activity. These could be family members, employers or other funds that have been misappropriated.
  • The other considerable proportion of these penalties amounting to £34,843,338 has been commissioned to agreed ‘socially responsible purposes’ as per the GCs Statement of principles for determining financial penalties June 2017
  • However, the issue in the last FOI question … remains in that the GC do not have in place a process for checking whether the funds they have commissioned to socially responsible purposes have been spent effectively and provided the impact intended. Indeed within the GC’s own Statement of Principles … is an obligation to meaningfully evaluate the effectiveness of the spend on socially responsible purposes.
  • Effective evaluation is an ‘Achilles Heel’ of the Gambling Industry generally. The Industry struggles to quantify whether its ‘safer gambling’ initiatives have the positive impact intended so we push ahead with things because they appear to be the right thing to do. The support charities have been looking for long term evaluation of their service provision for some years now and still find it difficult to reach conclusive answers. It appears that Effective Evaluation is just as illusive for the Gambling Regulator too.

Peter Hannibal’s comments above regarding “effective evaluation” echo recent criticism by the National Audit Office that, amongst other things, the Gambling Commission:

  1. does not have a full understanding of the impact of its work or whether it is achieving its overall objective to protect consumers and
  2. does not know the extent to which its increased enforcement action against operators has strengthened the deterrent effect of such action.

This is somewhat ironic, given the emphasis that the Commission places on its own licensees conducting effective evaluations, for example in relation to evaluation of customer interactions.

You can download below the table that accompanied the Gambling Commission’s FOIA responses.