| The Gambling
Commission is outpaced and outgunned by betting companies, according to a
government report warning that the watchdog is struggling to protect people
from gambling-related harm.
Audit Office, which monitors the effectiveness of public bodies, said the
regulator had not adjusted to technological change such as the rise of online
and mobile gaming. It said funding constraints had hampered the commission,
which has an annual budget of £19m but regulates an industry that took
£11.3bn from punters last year.
The commission is
constrained by factors outside its control, including inflexible funding
and a lack of evidence on how developments in the industry affect
consumers, the NAO said.
It concluded that the regulator was
unlikely to be fully effective in addressing risks and harms to consumers
within the current arrangements.
Its verdict comes after the
government promised to review the 2005 Gambling Act, following successive
scandals that have cast doubt on the industrys commitment to rein in
High-profile cases include revelations about the
industrys use of so-called VIP schemes, as well as concern
about the impact on young and vulnerable people of gambling advertising and its
links to football.
While the commission has ramped up the level of
fines it issues, from £1.4m in 2014-15 to nearly £20m last year, it
has struggled to keep pace with changing trends, the NAO said. These include a
56% rise in advertising spending between 2014 and 2017, most of it via online
and social media channels rather than television.
The NAO also pointed
to the increase in the proportion of online gambling that happens via mobile
phone, up from 23% in 2015 to 44% in 2018.
Gareth Davies, head of the
NAO, said: The risks to gamblers are changing as technologies develop.
Yet the Gambling Commission is a small regulator in a huge and fast-evolving
industry. While the commission has made improvements, gambling regulation lags
behind the industry.
The NAO called on the commission and the
Department for Digital, Culture, Media and Sport (DCMS) to do more to encourage
companies to surpass minimum standards on problem gambling protection,
including financial and reputational incentives.
called for a review of the commissions funding model, via fees paid by
operators for licences.
A report ordered by the House of Commons
highlighted a number of deficiencies in the regulators ability to protect
consumers, enforce licence conditions and even effectively measure the results
of its regulatory work.
This started with the regulators core
goal of protecting consumers. Problem gambling rates in Great Britain had
remained constant since 2012, with around 395,000 problem gamblers, and a
further 1.8m adults considered to be at risk of gambling-related harm.
While the Commission has consistently stated its goal of reducing these
figures, the NAO said it had yet to explain what sort of reduction, and over
what period of time, would consistute progress towards this goal. It had also
failed to articulate in detail how it determines which consumers may be
vulnerable, and when.
Regulators need clear, measurable
objectives so their teams and the external stakeholders they work with have a
common understanding of what they are aiming to achieve and can judge
progress, the NAO explained.
The Commission has translated
its statutory objectives and overall aim to make gambling safer into strategic
priorities, business plan activities and high-level outcomes it wants to
achieve. However, it has not yet developed these high-level outcomes into
detailed, measurable success criteria against which to judge progress.
This may be due in part to gaps in the data and intelligence used by
the Commission to identify the problems consumers experience with gambling
services or operators, another issue highlighted by the NAO.
particularly apparent for land-based gambling, which relies on local licensing
authority inspections for analysis on gambling premises. However, 119
authorities did not conduct any inspections in the year to 31 March 2019, with
around 60 failing to do so over the past three years.
Commission failed to make full use of its own data to identify consumer
problems, the audit said. It was contacted by consumers on around 33,000
occasions in the past year, though does not use this input as part of its
Ultimately, the NAO concluded, the Commission did not have a
full understanding of the impact of its work, or even whether it is achieving
its overall objective of protecting customers.
Its ability to govern a
changing industry was also called into question. As it is unable to change
funding models, it cannot invest in new skills to address emerging risks,
despite highlighting skill gaps in areas such as addictive technologies and
As a result, the regulators ability to respond
to industry changes is hampered by a lack of understanding on how such changes
actually affect consumers. This results in regulatory stasis, where the
Commission (despite having the power to make regulatory changes) doesnt
have the insight to make the correct alterations, resulting in legislative
process grinding to a halt.
The NAO highlighted the example of
fixed-odds betting terminals (FOBTs). While the Commission was unable to change
stake limits, it did have the power to place new controls on operators, and
advise the government that change was needed.
Indeed, it first advised
the government that the industry needed to improve transparency and harm
reduction measures around FOBTs in 2013. Due to a lack of evidence, however,
the regulator felt unable to make a concrete recommendation on reducing stake
limits until 2018.
Even enforcement, following a year that has seen
enforcement actions taken against nine licensees, and £19.6m in
settlements levied, was queried. It was unclear how effective this was as a
deterrent, the NAO said.
The regulator itself acknowledged that its
Licensing Conditions and Codes of Practice (LCCP) had perhaps not been as
effective in making gambling safer since 2015. The NAO said that despite the
Commission talking about encouraging the industry to raise standards, it did
not offer any sort of financial or reputational incentives - or any other
strategy - for doing so.
There was little evidence of it being able to
help consumers seeking redress where operators had failed to meet social
responsibility codes of practice, with the Commission struggling to
consistently direct such individuals to support or dispute resolution bodies.
It therefore concluded that the regulator does not have a full
understanding of the impact of its work or whether it is achieving its overall
objectives to protect consumers.
The NAO noted that this was not
solely down to the regulator, and that input from the Department of Culture,
Media and Sport was required. With DCMS, it said, the Commission should look to
develop a deeper understanding of gambling-related harm, especially around how
social and technological developments affect gambling habits.