Government Launches Review of Gambling Laws

Feature article about regulatory changes in the online gambling sector.

    • B2B
    • ftddigital.com
    • 18-12-20

A long-awaited review of existing gambling laws was launched Monday to determine whether current legislation is fit for purpose in the digital age. The findings will be used to make amendments to the Gambling Act 2005.

Terms of reference and calls for evidence were published by the Department for Digital, Culture, Media and Sport (DCMS) last week, offering early indications of the reforms being considered. In relation to online gambling, they cover five areas: Online Player Protection, Advertising, Sponsorship and Branding, Gambling Commission Power and Resources, Consumer Redress, Age Limits and Verification.

Online Player Protection

Account Safeguards and Affordability

As it stands, web-based gambling operators are required to monitor customer behaviour by using real-time data and then intervening if they find evidence of potential harm. They must also enable players to easily set limits on play and bar them from gambling if they’re self-excluded.

However, the current ‘tailored’ system depends heavily on web-based behaviour analysis and the personal preferences set by players. There are suggestions that such as system may be less effective for individuals with multiple accounts. Affordability remains a point of concern too – the Gambling Commission recently made a call for evidence to determine if checks can be made at pre-specified thresholds to further protect vulnerable gamblers.

Product Design

Presently, players have access to a wide range of gambling games, some of which are considered low risk while others are more closely associated with problem gambling rates. Online casino gaming, for example, accounts for 9.2% of gambling-related issues in comparison to the 2.5% figure relating to online betting. Although licensees must design their products ‘responsibly’, the DCMS is seeking evidence on whether current safeguards, such as the banning of cartoon imagery, are sufficient

White Label Operators

White label partnerships have become extremely common with more than 700 gambling websites operating under such arrangements. The DCMS will however be evaluating the current system to determine if companies are circumventing regulatory requirements by serving white label websites to UK customers.

Key Calls for Evidence

How effective are existing online player protections in preventing gambling harm?

Should there be greater controls on product design?

Should there be greater controls on deposit, loss and prize amounts?

Should spending limits be imposed universally or individually? If so, should they be based on affordability or ‘other considerations’?

Can consumer data be better deployed?

Is there evidence from behavioural science research to suggest that existing play-spend limits can be more effective?

Do white label websites pose a risk to gamblers in the UK?

Advertising, Sponsorship and Branding

Licensed Advertising

Advertising continues to be an area of concern, despite some major changes to the UK Advertising Code. Although TV exposure remains high, many operators have changed focus to online and social media promotions. As per official Gamble Aware figures, of the £1.5 billion spent by operators on advertising in 2017, 80% was set aside for online channels.

Additionally, a recent report from GambleAware found that young and vulnerable people were being subjected to high levels of exposure to advertising across multiple channels. It also cited clear evidence of children ‘following and engaging’ with gambling related accounts on social media platforms such as Twitter. Given these findings, the DCMS is to re-evaluate current restrictions placed on advertising and whether they go far enough. The Government will also conduct a wider assessment of the current laws governing online advertising and the ways in which harmful exposure comes about.

Sports Sponsorship

Sports sponsorship is another area up for discussion. Commercial partnerships between UK sports teams and gambling operators is widespread, especially in football and horseracing. And there have been calls for stricter rules due to concerns about overexposure. A July report by the House of Lords Report, entitled Gambling Harm – Time for Action, recommended the banning of shirt sponsorship. At this stage though, the Government seems hesitant about imposing these measures, citing a reliance on funding from gambling sponsorship (particularly Premier League teams). It also highlights a lack of evidence regarding a link between problem gambling and an exposure to operator logos. The DMCS is therefore seeking evidence about the harms and benefits of gambling sponsorship in sport.

Key Calls for Evidence

What are the harms or benefits caused by gambling promotion?

How effective are the safer gambling messages in preventing harm?

What are the harms or benefits caused by promotional offers including free spins or bonuses in respect of standard advertising or VIP marketing?

What are the harms or benefits of gambling sponsorship in sport?

The Gambling Commission

Powers, Resources and Funding

The rumoured emergence of an ‘online black market’, operator malpractice and a rapidly evolving industry has presented extra challenges to the Gambling Commission. So its existing powers and ability to regulate are also under evaluation. In consultation with the National Audit Office and Public Accounts Committee, the Government is looking at ways to improve regulatory evaluation as well as the use of data and intelligence.

Funding is another area to be assessed. Unlike other regulators which have more freedom in setting their own funding, financing of the Gambling Commission must go through Parliament. As a result, the National Audit Office (as well as the Gambling Commission), have recommended that the current fees system be reviewed.

Key Calls for Evidence

Is there any evidence to suggest a significant black market for gambling in the UK?

Is there any evidence of a significant black market emerging?

Is it easy for consumers to tell if they’re at an unlicensed gambling site?

Does the Gambling Commission have enough investigative and enforcement powers to change operator behaviour and raise standards?

What are the benefits of allowing the Gambling Commission to adjust its fee system?

What are the benefits in offering operators financial incentives to encourage compliance?

Consumer Redress

Dispute Resolution

Consumer redress and dispute resolution is already governed by fairly robust rules. Operators who fail the consumer risk heavy fines, licence suspension or revocation. Yet, the actual victims of operator negligence aren’t usually compensated. And although companies are required to nominate an approved dispute resolution service for contractual disputes, these providers do not have the power to rule on cases involving potential breaches of social responsibility.

What’s more, the Gambling Commission doesn’t investigate or provide judgments on specific cases. So the only recourse for the consumer is to pursue action through the courts which can prove expensive and time-consuming. Consequently, the DCMS is looking at ways to improve current redress arrangements so that the consumer is better protected, including the use of an ombudsman and financial compensation.

Key Calls for Evidence

Is there evidence that redress arrangements need to be changed?

Is so are there examples from other industries that could be used as models?

Is financial compensation a suitable form or redress for individuals with gambling problems?

Age Limits and Verification

Lottery Play

Strict laws are already in place to prevent underage gambling – 18 is the minimum age at which an individual can gamble online. This will be extended to National Lottery games next year after research identified potential risks associated with lottery play. The DMCR is considering applying this age requirement to society lotteries as well. There have also been calls for extra protection for individuals who’ve recently reached the legal age to gamble. This is despite the unveiling of advert age-gating and VIP exclusion.

Key Calls for Evidence

How many 16-17 year-olds participate in society lotteries?

Is there a connection between society lottery play and problem gambling among children and adults?

Are extra protections needed for young adults (18-25)?

If so, what protections would be the most effective?

The call for evidence closes March 31, 2021. You can read the Official Terms of Reference and Calls for Evidence here.