A short Clifton Davies Guide to the UK Government’s Review of the Gambling Act 2005

We have reported earlier today on:

  1. the launch of the UK Government Review of the Gambling Act 2005 and
  2. the UK Government response to the House of Lords Select Committee Gambling Industry Report.

The Government has also now published its Policy Paper entitled “Review of the Gambling Act 2005 Terms of Reference and Call for Evidence (that you can download below).

We have broken down the Policy Paper into the following six constituent parts, that we summarise below:

  • A: The Foreword
  • B: Introduction, Changes since 2005 and Government Action
  • C: The Terms of Reference
  • D: The Call for Evidence
  • E: The Questions posed in the Call for Evidence
  • F: How to respond

The call for Evidence will close at midnight on Wednesday 31 March 2021. Anyone requiring assistance in responding to any of the questions posed in the Call for Evidence is cordially invited to contact David Clifton or Suzanne Davies.


A: The Foreword

In the Foreword to the Policy Paper, Nigel Huddleston MP, Minister for Sport, Tourism and Heritage, indicates that, contrary to expectations of some and hopes of others, the Gambling Commission’s current Remote Customer Interaction Consultation & Call for Evidence (at the heart of which lies a proposal that defined affordability assessments will in future have to be conducted by remote gambling operators at thresholds set by the Commission) will proceed to a determination by the Commission quite separately from the Government Review process. The Minister states as follows in this respect:

The Review of the Act is an opportunity to step back and take a wider look across the issues, but improvements can and will continue to be made separately to the Review as well. The Gambling Commission is currently consulting on tighter requirements for operators to protect customers, including on interventions and affordability checks, and DCMS is already considering proposals from the Gambling Commission for a fees uplift to reflect the increasingly complex nature of the industry it regulates. This builds on the new restrictions on VIP schemes which came into force at the end of October, and new protections for online slots game design which will be announced soon. The government also recognises the essential public health elements to any discussion of gambling, and separately to this Review the Department for Health and Social Care will continue work to expand and improve the treatment of gambling-related harms alongside other addictions like drugs and alcohol.


B: Introduction, Changes since 2005 and Government Action

The three opening sections of the Policy Paper address the above points and include the following comments:

  • “This Review seeks to ensure that people can continue to gamble but that the legislation and regulation we have in place addresses as many factors as possible to give the necessary safeguards to protect children, vulnerable people, and all gamblers in the digital age”.
  • “This steady industry growth and shift to online have seen neither a marked increase in overall gambling participation, which has remained broadly stable between 45 and 48% of adults for the past five years, nor an increase in population problem gambling rates”.
  • “A stable problem gambling rate does not necessarily indicate a stable quantum of harm. Technological change has undoubtedly presented new risks, particularly in the form of more intensive products, accessible at any time of day without direct human interaction, accompanied by much more advertising, and involving increasingly rapid innovation. Technology has also given new opportunities to enhance player protections, which all those with an interest in safer gambling must capitalise on”.
  • “The land based sector and the economy around it have also changed significantly in the past two decades. The 2005 Act introduced new categories of casino licence with new entitlements and requirements. Seven of these casinos are now open and this Review will look at how the new rules have worked and what the next steps should be for regulation across the casino sector. More broadly, customers in all sectors have new expectations for ease of transaction, so in the increasingly cashless world we must consider whether the rules governing payment methods in the land based sector still serve a useful purpose in preventing harm and the degree to which they pose limits on innovation and customer choice”.
  • “Change has not been limited to commercial gambling. Lotteries, which predominantly exist to raise money for good causes, have also changed”.
  • “Alongside this Review, the Gambling Commission is introducing further protections across a range of areas, including added safeguards for VIP schemes which came into force at the end of October. Consultations have been taken forward on new rules on game design for online slots, a permanent ban on operators providing a facility for customers to cancel pending withdrawals of winnings, and new requirements for interacting with players including affordability checks”.

C: The Terms of Reference

The Terms of Reference for the Government Review are defined as follows:

Aim

The government wants all those who choose to gamble in Great Britain to be able to do so in a safe way. The sector should have up to date legislation and protections, with a strong regulator with the powers and resources needed to oversee a responsible industry that offers customer choice, protects players, provides employment, and contributes to the economy.

Objectives of the Review

The government is reviewing the Gambling Act (2005) to ensure our regulatory framework can protect children and vulnerable people, prevent gambling related crime, and keep gambling fair and open in the digital age. Through this Review, the government’s objectives are to:

  • Examine whether changes are needed to the system of gambling regulation in Great Britain to reflect changes to the gambling landscape since 2005, particularly due to technological advances
  • Ensure there is an appropriate balance between consumer freedoms and choice on the one hand, and prevention of harm to vulnerable groups and wider communities on the other
  • Make sure customers are suitably protected whenever and wherever they are gambling, and that there is an equitable approach to the regulation of the online and the land based industries.

Scope

To deliver these objectives, the Review will be wide-ranging in scope. It will have particular regard to:

  • The protection of online gamblers, including rules to minimise the risks associated with online products themselves, and the use of technology to support harm prevention
  • The positive and negative impacts of the advertising and marketing of gambling products and brands
  • The effectiveness of our regulatory system, including the Gambling Commission’s powers and resources to regulate and keep pace with the licensed market and tackle unlicensed operators, and funding flows from the industry to the regulator
  • The availability and suitability of redress arrangements for individual customers who feel they have been treated unfairly by gambling operators
  • Children’s access to Category D slot machines, the effectiveness of age controls, protections for young adults, and the age limit for society lotteries (currently available to 16 and 17 year olds)
  • The outcome of changes to the land based sector introduced in the Gambling Act 2005, particularly for casinos, and whether they are still appropriate in a digital age

In considering all of these issues, we will pay particular attention to children, young people, young adults, and others who may be particularly vulnerable to the risks posed by gambling. We have asked specific questions on these issues in various sections of the call for evidence.

The 2019 Manifesto committed to tackle issues around credit card misuse and loot boxes (features in video games which contain randomised items and can be purchased for real money). Credit cards were banned for all gambling except for lotteries in shops in April 2020, and in September we launched a bespoke call for evidence on loot boxes which will, as needed, support this wider Review of the Gambling Act.

Governance, outputs and timetable

The Review will be led by Ministers at the Department for Digital, Culture, Media & Sport, with engagement from across government, the Gambling Commission, the industry, health and charitable sector, those with lived experience of gambling harm, and other stakeholders.

After this initial 16 week call for evidence, the government will assess the evidence presented, alongside other data, with the aim of setting out conclusions and any proposals for reform in a white paper next year.

Wider work related to gambling will continue alongside this Review. The Gambling Commission will progress its ongoing work to make gambling safer through regulation. DHSC will continue to work collaboratively with NHSE and GambleAware to improve and expand availability and access to treatment for problem gambling. This will be supported by forthcoming increases in funding and evidence reviews by the National Institute for Health Research and Public Health England (PHE). PHE’s existing health protection role will be transferred to the new National Institute for Health Protection in 2021 and work on health improvement will continue with support from existing PHE expertise.


D: The Call for Evidence

Following, in each case, a short summary of relevant background information, the Call for Evidence poses a total of 45 wide-ranging questions. We believe they are broad enough to encompass all concerns raised in recent months by, amongst others:


E: The Questions posed in the Call for Evidence

The following questions are contained within six separate cetagories:

1. Online protections – players and products

Q1: What evidence is there on the effectiveness of the existing online protections in preventing gambling harm?

Q2: What evidence is there for or against the imposition of greater controls on online product design? This includes (but is not limited to) stake, speed, and prize limits or pre-release testing.

Q3: What evidence is there for or against the imposition of greater controls on online gambling accounts, including but not limited to deposit, loss, and spend limits?

Q4: What is the evidence on whether any such limits should be on a universal basis or targeted at individuals based on affordability or other considerations?

Q5: Is there evidence on how the consumer data collected by operators could be better deployed and used to support the government’s objectives?

Q6: How are online gambling losses split across the player cohort? For instance what percentage of GGY do the top and bottom 10% of spenders account for, and how does this vary by product?

Q7: What evidence is there from behavioural science or other fields that the protections which operators must already offer, such as player-set spend limits, could be made more effective in preventing harm?

Q8: Is there evidence that so called ‘white label’ arrangements pose a particular risk to consumers in Great Britain?

Q9: What evidence, if any, is there to suggest that new and emerging technologies, delivery and payment methods such as blockchain and crypto currencies could pose a particular risk to gambling consumers?

Q10: Is there any additional evidence in this area the government should consider?

2. Advertising, sponsorship and branding

Q11: What are the benefits or harms caused by allowing licensed gambling operators to advertise?

Q12: What, if any, is the evidence on the effectiveness of mandatory safer gambling messages in adverts in preventing harm?

Q13: What evidence is there on the harms or benefits of licensed operators being able to make promotional offers, such as free spins, bonuses and hospitality, either within or separately to VIP schemes?

Q14: What is the positive or negative impact of gambling sponsorship arrangements across sports, esports and other areas?

Q15: Is there any additional evidence in this area the government should consider, including in relation to particularly vulnerable groups?

3. The Gambling Commission’s powers and resources

Q16: What, if any, evidence is there to suggest that there is currently a significant black market for gambling in Great Britain, or that there is a risk of one emerging?

Q17: What evidence, if any, is there on the ease with which consumers can access black market gambling websites in Great Britain?

Q18: How easy is it for consumers to tell that they are using an unlicensed illegal operator?

Q19: Is there evidence on whether the Gambling Commission has sufficient investigation, enforcement and sanctioning powers to effect change in operator behaviour and raise standards?

Q20: If existing powers are considered to be sufficient, is there scope for them to be used differently or more effectively?

Q21: What evidence is there on the potential benefits of changing the fee system to give the Gambling Commission more flexibility to adjust its fees, or potentially create financial incentives to compliance for operators?

Q22: What are the barriers to high quality research to inform regulation or policy making, and how can these be overcome? What evidence is there that a different model to the current system might improve outcomes?

Q23: Is there evidence from other jurisdictions or regulators on the most effective system for recouping the regulatory and societal costs of gambling from operators, for instance through taxes, licence fees or statutory levies?

Q24: Is there any additional evidence in this area the government should consider?

4. Consumer redress

Q25: Is there evidence of a need to change redress arrangements in the gambling sector?

Q26: If so, are there redress arrangements in other sectors or internationally which could provide a suitable model for the gambling sector?

Q27: Individual redress is often equated with financial compensation for gambling losses. However, there may be risks associated with providing financial lump sums to problem and recovering gamblers, or risks of creating a sense that gambling can be ‘risk free’. Are there other such considerations the government should weigh in considering possible changes to redress arrangements?

Q28: Is there any additional evidence in this area the government should consider?

5. Age limits and verification

Q29: What evidence is there on the effectiveness of current measures to prevent illegal underage gambling in land based venues and online?

Q30: Is there evidence of best practice, for instance from other jurisdictions, in how to prevent illegal underage gambling?

Q31: What, if any, evidence is there on the number of 16 and 17 year olds participating in society lotteries?

Q32: What, if any, evidence is there to show an association between legal youth engagement in society lotteries and problem gambling (as children or adults)?

Q33: Is there comparative evidence to support society lotteries and the National Lottery having different minimum ages to play?

Q34: What are the advantages and disadvantages of category D slot machine style gaming machines being legally accessible to children?

Q35: Is there evidence on how the characteristics of category D slot machine style gaming machines (for instance whether they pay out in cash or tickets) factor into their association with harm in childhood or later life?

Q36: What, if any, is the evidence that extra protections are needed for the youngest adults (for instance those aged between 18 and 25)?

Q37: What evidence is there on the type of protections which might be most effective for this age group?

Q38: Is there any additional evidence in this area the government should consider?

6. Land based gambling

Q39: What, if any, changes in the rules on land based gambling would support the government’s objectives as set out in the document? Please provide evidence to support this position, for instance how changes have worked in other countries.

Q40: What evidence is there on potential benefits or harms of permitting cashless payment for land based gambling?

Q41: Is there evidence that changes to machine allocations and/ or machine to table ratios in casinos to allow them to have more machines would support the government’s objectives?

Q42: What is the evidence that the new types of casino created by the 2005 Act meet (or could meet) their objectives for the sector; supporting economic regeneration, tourism and growth while reducing risks of harm?

Q43: Is there evidence on whether licensing and local authorities have enough powers to fulfil their responsibilities in respect of premises licenses?

Q44: Is there evidence that we should moderately increase the threshold at which local authorities need to individually authorise the number of category D and C gaming machines in alcohol licensed premises?

Q45: Is there any additional evidence in this area the government should consider?


F: How to respond

The call for Evidence will close at midnight on Wednesday 31 March 2021. Responses to the questions posed are requested be emailed to [email protected] “in a document format like PDF or Microsoft Word”. Anyone requiring any other format or language to enable their response is invited to contact that same email address.

It is made clear that evidence will be welcomed “from all parties with an interest in the way that gambling is regulated in Great Britain”. International evidence will also be welcomed.

The Call for Evidence also states:

Where possible, please provide specific evidence or data to support your responses. In your response, please clarify:

  • Whether you are responding on behalf of an organisation or in a personal capacity.
  • What questions/ topics you are responding to. Respondents are encouraged to answer only to those questions where they have particular experience, expertise or evidence, and there is no need to respond to all questions.
  • Whether you want your response to remain confidential for commercial or other reasons, and whether you are willing to be contacted (if so please provide contact details).

The Government adds that, to support its public call for evidence, it will be “having specific conversations with some stakeholders where they hold pertinent evidence”.