The spectre of “offshore, black market, illegal operators” is raised in BGC reaction to Public Accounts Committee report

Responding to today’s House of Commons Public Accounts Committee’s “Gambling Regulation: Problem Gambling and Protecting Vulnerable People” report, the Betting and Gaming Council has stated:

The Betting and Gaming Council was established last year to drive up standards across our industry, and we are determined that this is a race to the top.

We have voluntarily introduced a range of measures from advertising restrictions including a whistle to whistle ban, a requirement for 20 per cent of all advertising to be safer gambling messaging, cooling off periods on gaming machines, encouraging deposit limits, monitoring play and spend, restricting and closing hundreds of thousands of accounts with new ID and age verification checks and massively increasing funding for research, education and treatment.

Nearly 30 million people enjoy gambling occasionally, whether that’s on the National Lottery, bingo, sports or gaming, and the overwhelming majority of them do so safely, and our industry supports over 100,000 jobs and pays over £3 billion in tax each year.

The industry is working hard to raise standards to help problem gamblers and those at risk, though we note that both the Regulator and the Government have made it clear that there is no evidence that problem gambling has increased.

Our industry is already heavily regulated. We mustn’t drive customers to offshore, black market, illegal operators that don’t have any of our safeguards, and we do want to see more action taken against the unregulated industry.

We are committed to making more voluntary changes and driving up safer gambling standards. We will work with the Gambling Commission and the Government to achieve this, particularly on the forthcoming Review of the Gambling Act.

In relation to the BGC’s understandable concern about customers of UK licensed gambling operators being driven “to offshore, black market, illegal operators” – the very same concern prompted by the recent final Gambling Related Harm APPG report – you might find of interest the following extract from a letter sent to the Public Accounts Committee by the Gambling Commission on 15 May 2020 (the full version of which can be downloaded below):

The scale of illegal gambling, how many operations have been detected and prosecuted, and how many operations the Commission decided it would not be in the public interest to prosecute.

In terms of scale, there is little evidence of a substantive online gambling provision that is unlicensed and overtly targeting UK consumers. There is a large online market outside our regulatory framework that UK based individuals could try or inadvertently interact with, and if the operator did provide facilities for gambling would then be in breach of the legislation. Where the Commission has concerns offences are being committed under the Gambling Act (whether providing illegal gambling facilities or advertising illegal gambling sites) to GB residents/consumers we take an incremental enforcement approach to deliver our statutory objective to keep crime out of gambling.

Where we suspect individuals or companies are illegally interacting with UK consumers, we will initially issue cease and desist notices. 143 notices have been issued in the past three years. If these notices are not complied with and the majority are, we will escalate the case which can include the opening of a formal criminal investigation which allows us to utilise a range of investigatory powers with a view to bringing prosecution action. Over the past 3 years we have steadily increased the number of investigations opened with one successful prosecution occurring in 2016/17 against Fut Galaxy (further details can be read here).

Prosecutions brought against individuals in the UK are relatively straightforward and the Commission has long established processes for this. However, many of our investigations reveal that key culprits are often not domiciled in Great Britain, and may be resident in countries with whom we don’t have mutual legal assistance/bilateral agreements. As a rule, the Commission prioritises consumer protection above entering into protracted prosecution which may or may not be fruitful and so in the public interest those cases may not be brought forward to full prosecution. There have been 13 instances in the period 2018 to present where we have taken the decision not to proceed in the public interest. In those instances, the Commission has utilised its enforcement toolkit to seek to employ other disruption tactics including with internet hosting providers or payment merchants or requesting the owner to geo block themselves to GB customers.

The Commission invites the Committee to note that some providers will not engage with us short of a court order or formal proceedings which is why the Commission is building evidence to consider whether provision of additional powers to us, such as the blocking of identified websites, would better enable us to target such operations. We continue to monitor the impact of our ongoing actions in relation to illegal gambling to ensure consumers are protected. In relation to the scale of illegal gambling, in the period October 2019 – March 2020, the Commission received 93 reports of illegal sites, predominantly through our intelligence reporting and public contact centre routes. The Commission have also been tracking other illegal gambling activity including that provided by way of social media. In the period October 2019 to 31 March 2020 the Commission received 284 reports of illegal social media gambling activity and the action we took included engagement with the social media platform to seek closure of those accounts, dissemination to other law enforcement agencies and issuing Cease and Desist notices where it was appropriate to do so.