On 7 and 8 September 2021, David Clifton had the honour of chairing the excellent two-day 4th Annual KnowNow conference held in London, the agenda for which you can download below.
Day 1: “Social Responsibility for Gambling Operators”
Welcoming a sizeable audience to Day 1, David applauded KnowNow for not only holding what is believed to be the UK’s first face-to-face gambling industry conference for about 18 months, but also for the perfect timing of the event in other ways too, namely:
- one day following the launch by Flutter UK & Ireland of a £500 per month net deposit limit for all customers under the age of 25 years,
- two days following Marcus Boyle taking over as the new Chair of the Gambling Commission with the accompanying notes to the DCMS press release referring to Mr Boyle’s “track record of delivering transformational change”, something that has been previously reflected in the advertised job description for the post of Gambling Commission Interim CEO which explained to potential candidates that “you will join us at an important time as we seek to transform our own organisation, whilst continuing to pursue widespread improvements in protection for consumers” and
- shortly ahead of the Government White Paper (publication of which is promised before the end of this year) in connection with the current Review of the Gambling Act 2005 and its associated Call for Evidence.
Introducing Gambling Commission Executive Director Tim Miller as the conference’s Keynote Speaker, David first summarised comments made in a speech by the Gambling Commission’s then Acting Joint Chief Executive Sarah Gardner in May 2021 in relation to:
- decreasing rates of overall population problem gambling (“PG”) and significant reductions in the moderate and low risk PG rates, which she had said shows: “a clear reduction in the rate of at risk gamblers and also suggests that we may be starting to see a decline in the overall rate of problem gambling” and
- affordability, which requires a “need to strike an appropriate balance between consumer protection and concerns about privacy and consumer choice”, indicating that the Commission’s initial focus will be on cases where customer interaction failings relate to plainly obvious unaffordable gambling activity by customers, something that was subsequently confirmed by the regulator’s subsequent “Update on Remote Customer Interaction Consultation”,
and, in the process of that summary, he queried to what extent the issue of that ‘appropriate balance’ will be for the Commission or, alternatively, for Parliament to determine. That answer will become clear in the coming weeks.
David also emphasised the Gambling Commission’s consistent message to its licence holders in relation to its expectation that they will:
- “continue to follow the strengthened guidance issued during the first lockdown, taking close interest in data that shows consumers expanding their portfolio of games and spending more time or money than before”,
- “interact directly where triggers are reached, in addition to their more generic email engagement”,
- “avoid any temptation to exploit the current situation for marketing purposes, in particular as lockdown eases and be very cautious when seeking to cross-sell products” and
- “take particular care when on-boarding new customers and making decisions over affordability checks which reflect the environment we are in”.
Speech by Gambling Commission Executive Director, Tim Miller
You can download below the keynote speech entitled ‘New normal, higher expectations’ that was then delivered by Tim Miller, but we summarise notable aspects of the speech below.
On the subject of affordability, as Sarah Gardner had done four months earlier, Tim Miller likewise focused on plainly obvious unaffordable gambling activity by customers:
One piece of work – which has attracted a lot of attention – is our work on remote Customer interaction. Now, as this audience will know, all licensees are required to interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This is nothing new. And current requirements, which came into force in October 2019, place a duty on remote operators to identify customers at risk of harm and take action.
However, despite these existing requirements the evidence of our casework is clear. We continue to see example after example of operators who have allowed people to gamble amounts that clearly place customers at risk of harm with very limited or no customer interaction until a very late stage.
Just to be clear, we are not talking about grey areas here. We are talking about significant binge gambling or clearly unaffordable levels of gambling without action being taken. Can anyone in this room seriously justify allowing a new customer to lose £10,000 within minutes without any checks or interaction? It is issues such as these that we are seeking to address in our customer interaction proposals.
He went on to confirm that the Commission will be publishing revised LCCP customer interaction requirements “in the coming weeks”, saying:
Going back to our Licensing Objectives, the Gambling Commission has a duty ‘to aim to permit gambling’ as long as it is in line with the Licensing Objectives. But we will not permit operators to continue to place their commercial objectives ahead of customer protection.
The consultation and call for evidence received around 13,000 responses and having now assessed the responses and the evidence, we will be publishing revised LCCP requirements on customer interaction in the coming weeks.
He also confirmed that the Commission will be conducting a yet further consultation on ‘thresholds for identifying key financial risks’, commenting that:
…. our planned next step will be a consultation on thresholds for identifying key financial risks: when it comes to significant losses in a very short time, significant losses over time and financial vulnerability. We are mindful of the fact that there is an ongoing review of the Gambling Act and do not plan to consult on issues that are rightly for that Review. However, as the example I gave earlier shows, operators are allowing consumers to be exposed to unnecessary risks now. The multiple failures to comply with our existing outcomes focussed rules has forced our hand into bringing forward more prescriptive requirements to ensure that those longstanding regulatory outcomes are delivered.
In answer to a specific question that David posed to him following the conclusion of his speech, Miller confirmed that the Commission will be adopting a ‘more risk-based approach’ to the issue of affordability than has been the case up to now.
- it can be inferred – from his above comments that the regulator has no plan to consult on issues that are rightly for the Government Review process – that it will instead be a matter for Parliament, rather than the Gambling Commission, to determine whether – as a matter of policy – mandatory defined affordability assessments are to be conducted of the type previously proposed by the Commission, and
- the Commission appears to be rowing back from the position adopted in its November 2020 Compliance and Enforcement Report, when it said that “customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three months’ payslips, P60s, tax returns or bank statements which will both inform the affordability level the customer may believe appropriate with objective evidence whilst enabling the licensee to have better insight into the source of those funds and whether they are legitimate or not”. It remains to be seen whether this apparent change of approach will be reflected in the stance taken by Gambling Commission officers when conducting future Compliance Assessments.
Also particularly worthy of note is Tim Miller’s following comments in relation to the illegal online black market threat (an issue on which there has been to date a distinct difference of opinion between the Gambling Commission on the one hand and the Betting and Gaming Council on the other):
The Gambling Commission is alive to this danger and regularly takes action to cut off or shut down these sites. With rapid changes in technology we know we need to be increasingly fleet of foot and may need a broader range of tools to tackle emerging risks. We are pleased that the Review of the Gambling Act includes a focus on the powers and resources of the Commission. Industry and others are right to flag the risks that can come from the black market. But the solution to tackling that black market is not to cease taking action to make regulated gambling safer. We won’t legitimise poor practice at home through fear of what might be happening elsewhere. Making gambling safer and keeping crime out of gambling are not mutually exclusive and we will continue to pursue both of those objectives rigorously.
Miller also focused on criticisms of the Gambling Commission’s use of data as a regulatory tool that were made by the National Audit Office in February 2020, adding that UK licensed operators should “use the remainder of this business year to ensure [their] data quality processes are robust and fit for purpose”. In this respect he said:
We are clear that, in order to be evidence-based in our approach, we will increasingly need access to robust, comprehensive data. Further investment will be essential for the Commission to both realise the potential and manage the risks that come from regulating an industry where technology is changing all the time. However, all the investment in the world will not deliver a more effective Gambling Commission if the data we receive from operators is lacking.
Historically, we have needed to carry out huge amounts of quality assurance on the data provided through the regulatory returns process. Returns have been late, or sometimes not delivered at all, with many returns being full of errors. Despite this being an LCCP requirement, some operators have thought it acceptable to, in effect, outsource the quality assurance of their data to the regulator. This is not something that can continue.
Industry and others should rightly hold our feet to the fire to ensure that our work is grounded in evidence. But the quality and timeliness of data from industry is the single biggest limiting factor. In next year’s business plan we will set out a programme of target compliance and, if necessary, enforcement action around the quality and timeliness of the regulatory returns we receive. So I would strongly encourage operators to use the remainder of this business year to ensure your data quality processes are robust and fit for purpose.
Miller concluded his speech with the words:
The message I want you to take away today is a simple one. Whatever else changes, the work to make gambling in Great Britain fairer, safer and crime free continues. Our desire to collaborate with all of you who share this ambition continues. And our willingness to use the full range of our regulatory toolkit to deliver that ambition, also continues.
Responding to that message, David welcomed what are hopefully signs of a potential improvement in both collaboration and communication between the regulator and the regulated in future.
Day 2: “Keeping Crime Out of Gambling”
David opened Day 2 of the conference with his ‘Opening Remarks and Regulatory Review’ of relevant developments since the beginning of 2020 in relation to the first licensing objective under the Gambling Act 2005, i.e. “preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime”.
You can download his presentation below which, in addition to comment on relevant aspects of Tim Miller’s speech delivered the previous day, covered:
- Topics that the audience could look forward to during the day
- Emerging and heightened money laundering and terrorist financing risks
- Consistent operator failings identified in Gambling Commission Compliance Assessments and enforcement action
- Penalties arising from AML-related enforcement action
- Other AML points of relevance
- Improvements of operators’ governance frameworks
The two-day conference reminded all present of how much more stimulating a face-to-face industry event can be, compared with what have necessarily had to be online-only events over the last 18 months.
That reminder was particularly so in the final session on Day 1 of the KnowNow conference, that focused on the subject of safer gambling tools. That will be a topic on which David Clifton will himself focus when moderating the “Practical safer gambling solutions” panel session at 4.20pm (CEST)/3.00pm (BST) on Thursday 23 September at the forthcoming SBC Summit Barcelona, taking place at the Fira Barcelona Montjuïc on 21 – 24 September 2021. More details of that are available on our website here.
1. David Clifton was interviewed at the conference by Becky Liggero Fontana (for Coingeek‘s ‘Hashing It Out’ Episode 11) on the subject of responsible gambling data management and the potential of blockchain technology as a solution. You can view the video of that interview here.
2. Arising from the above interview, David is quoted as follows in a gamblingtv.com article entitled ‘David Clifton: Gambling Review May Lead To More Technological Requirements’:
For David Clifton, Director of Clifton Davies Consultancy, a potential outcome of the review of the 2005 Gambling Act could be a requirement for UK betting operators to leverage all available technology solutions.
Speaking to CoinGeek’s Becky Liggero at the Know Now’s Social Responsibility for Gambling Operators Conference, Clifton shared his views on the leveraging of technology for safer gambling purposes, including blockchain solutions.
“What has been happening, and that’s been evidenced certainly by a number of sessions today, is that the technology is becoming more complex, but also becoming more available,” Clifton remarked.
“Personally, I will not be in the slightest bit surprised if we see from this government review, a more formal requirement for UK licensed operators to use the technology that is available. In all possibility, that might prove to be tricky for the smaller operators, so that’s going to need to be addressed.
“I think the expectation on the part of the Commission is that different technology is there to assist as far as safer government processes are concerned, operators should using it.”
Liggero also spoke to Peter Higgins, a commercial mediator for the Independent Betting Adjudication Service (IBAS), who identified what the majority of disputes between customers and operators in the gaming industry have revolved around in recent years.
He explained: “There are many examples where it could be a grey area, but the growing area has been around the licence code on social responsibility e.g. self-exclusions that may have been complicated – you could have a retail based operator, and an online-based operator, different companies, and the client has signed up with one and not the other.”
Additionally, he also highlighted the issue of affordability as a ‘big growth area’, adding: “Because the ADR is not in place to cover those today, that’s where a lot of referrals are coming from. I think the Gambling Act review should be looking at closing down some of the areas, but it’s a growing area that we’re seeing today.”
Probing Higgins’ views on the use of blockchain technology, Liggero quizzed the consultant on how solutions such as an immutable ledger, in which conversations between bettors and operators are recorded, could be effectively leveraged.
“What it will do is settle some of the disputes so they don’t get to this stage, which is a good thing. I’m basically dealing with stages that we’re trying to avoid going to – litigation.
“If you can have these ledgers in place which can prove when something was placed with some different examples, in crude terms it’s basically more evidence for the operator or for the client.”
3. David is also quoted along similar lines in a Gambling News article entitled ‘Blockchain as a solution for more responsible gambling’