UKGC publishes first ever National Strategic Assessment

The Gambling Commission has published its first ever National Strategic Assessment, which you can download below.

It sets out the Commission’s latest assessment of the issues and risks that gambling poses to consumers and the public and is built on four pillars linked to:

  1. the Person gambling (Chapter one)
  2. the Place gambling occurs (Chapter two)
  3. the Products available to customers (Chapter three)
  4. the Provider of facilities for gambling (Chapter four)

The Commission describes the assessment on its website as follows

The document uses the latest available evidence, from a wide range of sources and case studies, to assess the issues and the risks gambling presents to consumers and the public.  It sets out the Commission’s priority actions to address those risks and issues, as well as highlighting a number of areas where significant progress is already made to make gambling safer.

Commission Chief Executive Neil McArthur said:

“We will use our National Strategic Assessment as the foundation for prioritising our work over the coming months and years.

We look forward to working with the government on the forthcoming review of the Gambling Act and alongside that work we will be working hard to address the issues that we have identified in our Strategic Assessment.

We have demonstrated that we are willing and able to respond quickly to emerging issues and risks and that we will use the full range of our powers to protect consumers.  We and have made considerable progress in many areas to make gambling safer – but we want to go further and faster.”

The Executive Summary of the National Strategic Assessment reads as follows:

This report outlines the Commission’s assessment of the key issues faced in making gambling fairer, safer and crime free. We have used our insight, research and casework to assess the risks and challenges in gambling through four different lenses – the Person, the Place, the Products and the Provider. We will continue to develop our assessment to help inform stakeholders.

This assessment also sets out our priority actions to enable us to address these issues. We have also included in this document an overview of progress that has been made since April 2019, the start of the last business year.

Evidence tells us that gambling participation is not increasing, but ways of gambling are changing. At an overall level, participation rates have remained stable in recent years.

At the same time problem gambling rates are not increasing, the data indicates that the rate of problem gambling has been statistically stable since 2012. Nevertheless, it is important that we continue to develop a robust understanding of how different groups within society, particularly those who are more vulnerable, are experiencing gambling-related harm. The National Strategy to Reduce Gambling Harms sets out how a public health approach will help identify and reduce these harms.

Risks and issues set out across the four chapters of this assessment include ineffective ‘know your customer’ approaches including affordability checks by operators; the need for early identification and action to at-risk behaviours; the availability of online gambling; advertising; safer online and platform games and the characteristics of high risk products.

Other issues highlighted include underage gambling; ownership and governance of gambling providers; and gaps in the evidence and understanding of gambling-related harms.

Good regulation is informed by good evidence. We continually seek to improve the evidence base; to have access to better data, to move away from just counting problem gamblers to understand more about specific gambling-related harms. We also highlight further research outputs on why people chose to gamble and the benefits they derive from it.

We want industry to do more to understand their customers and end the distinction between regulatory and commercial considerations – that means engaging on big topics like developing credible affordability solutions, making products safer by design and building dynamic player-centric safeguards. We must see the industry doing more to proactively identify and address the risks within their businesses. An approach to raising standards for consumers which is heavily dependent on the Commission using its formal regulatory powers will continue to damage the industry’s reputation, restrict activities and result in escalating penalties.

As a regulator we will do more to demonstrate the impact of our regulation and where we are making progress in changing the behaviours of operators. As such, we will be preparing key metrics to address this.

This assessment has been prepared amid the unprecedented disruption caused by the Covid-19 pandemic. The impacts of the pandemic now and moving forward are still being assessed and will shape the gambling industry and its regulation in the years to come.

We set out below the content of the National Strategic Assessment (with links to, and relevant page numbers of, its constituent parts)

  1. Chief Executive’s foreword 03
  2. Executive summary 05
  3. The person gambling 07
  4. The place where gambling is occurring 26
  5. The gambling product 36
  6. The provider of facilities for gambling 46
  7. Measuring the effectiveness of gambling regulation 57
  8. COVID-19 and its impact on gambling consumers 59
  9. Annex 1 – Making gambling safer: a timeline of action 64

We would draw particular attention of gambling operators to what is said within section 3 on the subject of customer affordability, namely:

The person gambling – Customer affordability

Individuals spending more than they can afford to lose is one of the harms most associated with gambling. Harm can be significant even at low spending levels as the level of spend at which harms begin to occur depends on the consumer’s discretionary income. Licensees are not sufficiently equipped to support and, in some cases, protect consumers to mitigate against the risk of gambling beyond their means.

The following table provides the levels of discretionary income using YouGov survey data. Discretionary income is how much an individual has left at the end of the month after accounting for taxes, bills, food and accommodation. The table is based on population level data.

Percentage of discretionary income by age (January 2020)

Table of percentage of discretionary income by age (January 2020)
Amount All 18-24 25-34 35-44 45-54 55+
Nothing 9% 10% 7% 9% 11% 9%
Less than £125 25% 31% 20% 25% 26% 25%
£125 to £249 20% 21% 20% 19% 19% 21%
£250 to £499 19% 15% 23% 20% 19% 19%
£500 to £999 16% 15% 18% 16% 15% 15%
£1,000 to £1,999 9% 7% 10% 9% 8% 9%
Over £2,000 2% 1% 1% 2% 3% 3%

Another source of data is provided by the Office for National Statistics (ONS) on disposable household income, combined with information on living costs and spending.

According to the ONS Annual Survey of Hours and Earnings:

  • median gross weekly earnings for full-time employees is £585
  • the occupation group with the highest median weekly earnings for full time employees is still managers, directors and senior officials for which median gross weekly earnings has increased is £862
  • based on this data, 50% of full-time employees in the UK receive less than £30,500 gross earning per year and 50% of the full-time managers, directors and senior officials in the UK receive less than £45,000 gross earnings.

This part of the National Strategic Assessment then continues by referring to case studies of “clearly unaffordable gambling” – accessible here – saying:

The following case studies which have all resulted in regulatory action, demonstrate the ineffective control frameworks used to identify and manage the risk. Common issues include interventions not happening in a timely way with customers flagged as needing an interaction, but this not happening until the next day, or later, after the customer had spent life-changing sums of money.

Threshold levels for review continue to be set at levels that do not take account of the affordability of a typical consumer. As illustrated by the income data, gambling activity at these levels over the periods of time reviewed would be clearly unaffordable for all but the very wealthiest individuals.

Publication of the National Strategic Assessment coincides with the belated publication of the Commission’s annual Compliance and Enforcement Report on which we have reported separately here, also drawing specific attention to comments within that report on the subject of affordability.

The content of these two separate documents is closely interlinked – the former drawing on data, statistics and evidence obtained from the Commission’s compliance and enforcement work – and we encourage all of our clients, followers and contacts within the gambling industry to study both documents very closely.

Please contact us – [email protected] or [email protected] – if you have any questions arising, including in relation to the issue of affordability checks that are the subject of a current Gambling Commission consultation and Call for Evidence (running until 12 January 2021) on which we have previously reported here.