The House of Commons Public Accounts Committee examines the value for money of Government projects, programmes and service delivery. Drawing on the work of the National Audit Office (“NAO”), the Committee holds government officials to account for the economy, efficiency and effectiveness of public spending.
Following publication on 28 February 2020 by the National Audit Office of a report entitled “Gambling regulation: problem gambling and protecting vulnerable people”, the Public Accounts Committee announced on 17 April 2020 that it has commenced an Inquiry entitled “Gambling regulation: problem gambling and protecting vulnerable people”.
Explaining the reason for the launch of the Inquiry, the Public Accounts Committee states as follows on its website:
Gambling can have significant adverse effects on people which can include addiction, mental health problems, financial loss, and in some cases crime or suicide.
Excluding the National Lottery, gambling operators earned £11.3bn in 2018-19. All gambling in Britain is regulated by the Gambling Commission with the aim to “ensure gambling is fair and safe”. It is funded by licence fees from industry, which amounted to £19 million in the same period.
Overall responsibility for the policy and regulatory framework lies the Department for Digital, Culture, Media & Sport (DCMS), which has an objective to ensure gambling is socially responsible. The industry is increasingly complex, with new risks emerging from online and mobile gambling and games that share features with gambling but are not regulated as such.
The NAO’s report ‘Gambling regulation: problem gambling and protecting vulnerable people’ examines how well gambling regulation protects people from gambling-related harms and addresses new risks from social and technological developments.
The report finds that there are an estimated 395,000 problem gamblers in Great Britain, with 1.8 million more gamblers at risk who may also be experiencing harm. The report finds that the Gambling Commission is improving its regulation but has more to do including taking a more strategic approach to influencing gambling operators to raise standards.
The NAO concludes that even with improvements, the Commission’s ability to protect gamblers faces constraints in the regulatory framework, including inflexible funding and gaps in redress arrangements, and that the Commission is unlikely to be fully effective in addressing risks and harms to consumers within the current arrangements.
This will be the first time the Committee has examined gambling regulation in recent years. The Committee will question officials from the Department for Digital, Culture, Media and Sport and the Gambling Commission, on how well the current regulatory framework protects gamblers.
The Committee will also ask officials about how current restrictions imposed in response to the COVID-19 pandemic could affect those susceptible to the negative impacts of gambling.
The Committee is inviting views from any interested parties on the issues raised by the NAO report – please submit your evidence by Wednesday 22 April.
1. Written Evidence
Seventeen items of evidence submitted in writing to the Public Accounts Committee can be viewed here. It includes written evidence submitted by the Betting and Gaming Council (that can be downloaded below)
2. Oral Evidence
The Public Accounts Committee’s first (and only) oral evidence session took place on 27 April 2020 and can be viewed on BBC iPlayer here (the video recording of which will be available for 30 days after initial broadcast). For those too late to view the video, a transcript of this session is now available on the UK Parliament website here (and can also be downloaded below). The witnesses giving evidence were Sarah Healey (Permanent Secretary at the Department for Digital, Culture, Media & Sport) and Neil McArthur, Chief Executive of the Gambling Commission.
In light of criticisms of the Gambling Commission within the NAO report (on which we previously reported here), members of the Committee (particularly two newly elected Conservative MPs, Richard Holden and James Wild) posed some very searching questions, including (a) whether the Commission is adopting a proactive approach towards consumer protection during the COVID-19 lockdown, (b) the level of reduction it wants to see in the number of people affected by problem gambling and (c) the need for the Commission to strengthen its own evaluation processes by means of adoption of appropriate key performance indicators.
Whilst Neil McArthur sought to defend the Gambling Commission against certain criticisms of the NAO, he admitted that improvements could be made, including the Commission’s “need to move faster” and be “more agile”. In answer to a question posed to him about how the effect of increased enforcement action has been demonstrated, he did say that “there has been a noticeable change in tone at the top on the part of major operators how they commit themselves to safer gambling – they get it and understand the need – and a shift in mindset from the language of responsible gambling (where the onus is on the individual to keep themselves safe) to safer gambling …. an acceptance of their responsibility to keep players safe”. In other respects, he was accused of identifying problems rather than solutions.
Sarah Healey was generally supportive of the Commission throughout the Q&A session. She stressed that the Government is committed to proportionate regulation that is evidence-based and that decisions on policy change to gambling regulation need to be evidence-based. She added – in response to suggestions that certain aspects of gambling reform should be introduced more quickly – that “in the process of making things fast, let’s also make sure they are right”. However, she would not be drawn on when the Government review of the Gambling Act 2005 will commence, other than to describe it as a “manifesto commitment” as a result of which it will be “prioritised”.
Public Accounts Committee Chair, Meg Hillier, said at the conclusion of the session that the Committee will be publishing its report within a month or 6 weeks.
Footnote: Richard Holden MP is a member of the Gambling Related Harm APPG and his desire to see online gambling face the same restrictions that were imposed on Fixed Odds Betting Terminals is evident from his maiden Parliamentary speech on 23 January 2020, when he said:
Another campaign that many hon. Members were involved in was the one against fixed odds betting terminals. I would like online gambling and online fixed odds betting to face the same restrictions. If we are going to ban people from walking into bookmakers to gamble large sums, we should also look at the gambling that can take place in people’s homes, in people’s bedrooms or even in the bath. It is one of those things that reach into every aspect of people’s lives, and I think it is a really important thing that the Government should look at in the coming years. I will certainly be part of any campaigns that look at restricting that.
3. Letter from the Gambling Commission to the Committee dated 15 May 2020
During the oral evidence session on 27 April, there were a number of issues about which Gambling Commission CEO, Neil McArthur, promised the Committee further information. That information was supplied in a letter from him dated 15 May 2020 (that you can download below) in sections headed:
- The impact of the merger between Flutter and Stars Group
- Our fees and fee structure
- Enforcement actions against operators and licence revocations and surrenders
- Customer interaction by industry
- The scale of illegal gambling, how many operations have been detected and prosecuted and how many operators the Commission decided it would not be in the public interest to prosecute
4. Public Accounts Committee Report published on 28 June 2020
On 28 June 2020, the House of Commons Public Accounts Committee published its “Gambling regulation: problem gambling and protecting vulnerable people” report. It is highly critical of both the DCMS and the Gambling Commission in terms of what it perceives to have been a failure to adequately protect consumers and for the inability to judge the efficiency of the Commission against its stated objectives. You can access the report (and read our commentary upon it) in our subsequent website posting entitled “Public Accounts Committee report slams ‘slow, weak’ Gambling Commission and ‘complacent’ DCMS”.