Last week on 8 December 2020, the UK Government Department for Digital, Culture, Media and Sport (“DCMS”) announced its review of British gambling laws. As part of its review of the UK Gambling Act 2005 (the “Act”), the DCMS has initiated a call for evidence, which will stay open until 31 March 2021.
This review has been expected for some time and comes as no surprise. The Conservative Party had pledged that it would conduct a review into the Act as part of its Election Manifesto in 2019, referring to the Act as “increasingly becoming an analogue law in a digital age.”
Indeed, one of the key aims of the review of the Act is “to reflect changes in the gambling landscape since 2005, particularly due to technological advances.”
The Terms of Reference set out the full list of questions to be considered as part of the review, although questions focus on the following areas:
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minimising the risks associated with online gambling products;
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the impacts of the advertising and marketing of gambling products and brands;
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the effectiveness of the regulatory system (including the powers and resources of the GB Gambling Commission (“GC”));
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the suitability of redress arrangements for gambling customers who feel they have been treated unfairly;
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effectiveness of age controls on gambling products; and
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review of legislative changes to the land-based gambling sector (especially casinos) made in 2005.
Government response to House of Lords Report
This call for evidence follows the publication on 2 July 2020 of a House of Lords Report, entitled Gambling Harm – Time for Action (the “HoL Report”). The HoL Report sets out the recommendations of the Select Committee on the Social and Economic Impact of the Gambling Industry.
On 10 December 2020, the Government published its response to the recommendations set out in the HoL Report.
The Government’s responses to many of the recommendations made in the HoL Report refer to the need to consider evidence gathered in the course of the DCMS’ public consultation referred to above.
However, the Gov’t clearly signalled its intention not to wait for the wider review of the Gambling Act to introduce regulatory change in the crucial area of the affordability checks. A separate public consultation into customer interaction and affordability requirements was launched on this matter last month and will close on 12 January 2021. The seeming willingness to introduce regulatory change in this area prior to the review of the Act being completed is striking – and not just given the issue’s significance. The DCMS recognised in its consultation both:
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the need to balance on the one hand, player protection, and, on the other, the consumer’s freedom of choice as to how they spend their money; and
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the fundamental concern not to inadvertently create conditions which may cause a growth in black market gambling – a number of industry commentators have warned that introducing an overly restrictive affordability regime could deter gamblers, who aren’t at risk, from the regulated market.
Some particular points to note in the Government’s response to the HoL Report include:
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Licensing of marketing affiliates: In its response, the Government expressed its reticence to adopt the HoL Report’s recommendation to initiate a requirement for marketing affiliates to be licensed by the GC before they can contract with gambling operators.
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Affordability checks: As referred to above, the Government wholly endorsed the HoL Report’s recommendations to impose clear requirements on gambling operators when conducting affordability checks on customers and implementing appropriate controls. This is potentially the most significant issue currently under consideration. The GC has challenged the industry to develop an industry-wide response in this area to prevent customers circumventing operator-specific controls by simply gambling with other operators. The Government has also highlighted the part to be played by banks / financial institutions in developing a best practice protocol for introducing a blocking service on gambling transactions.
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VIP schemes: The Government’s response indicated that if the latest amendments to operators’ requirements re: the management and incentivisation of “VIP” customer (which came into effect in October 2020) fail to have the impact envisaged, further restrictions are likely to be imposed in this area.
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Duty of care: The Government ignored and declined to comment on the HoL Report’s recommendation for a statutory duty to be established between gambling operators and their customers, which would enable customers to bring claims directly against gambling operators for losses they suffer as a result of breaches of the LCCP.
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Loot boxes: The Government signalled its intention to move forward and publish its next steps on loot boxes in early 2021 (following completion of its public consultation in this area, which completed on 22 November 2020).
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Lotteries: The Government has already endorsed the recommendation made in the HoL Report to raise the minimum age to purchase a National Lottery ticket to 18 (this legislative change coming into effect in October 2021). Its response, however, did not support the recommendation in the HoL Report to transition from the current lottery duty regime to a new gross profits tax.
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Sport and advertising: The HoL Report had made recommendations for advertising by gambling companies not to be permitted on the shirts / kit of sports teams or otherwise near sports grounds. The Government’s response noted that whilst the effects of sponsorship and advertising are being considered as part of the wider review of the Act, it is important to balance the public’s concern in this area with: (i) the reliance of sports organisations (especially football clubs below the Premier League and horseracing) on funding from gambling sponsorship; (ii) existing requirements and initiatives on socially responsible gambling advertising (including the Gambling Industry Code for Socially Responsible Advertising and the voluntary whistle-to-whistle advertising ban on TV); and (iii) the lack of compelling evidence to demonstrate a causal link between exposure to gambling company logos and actual problem gambling behaviour in children or adults.
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“Bet to view” streaming: Similarly, the Government’s response did not support the HoL Report’s recommendation to include an additional social responsibility code provision relating to the licensing of streaming on a “bet to watch” basis – i.e. access to the content being conditional on having an account or placing a bet with that operator. The HoL Report then went on to state that it intended as a consequence of this that the display of live sport by licensed gambling operators would cease. As noted above, the Government’s response did not endorse the HoL Report’s recommendations – acknowledging that: (i) betting streaming arrangements were a longstanding practice; (ii) provided a valuable additional income stream for sports rightsholders and (iii) that, in its view, there was no clear evidence to suggest that gambling operators’ display of live sport posed a threat to the licensing objectives. Nevertheless, the Government’s response did indicate that it will continue to monitor the evidence which comes to light in the course of its wider review of the Act.
Other recommendations in the HoL Report on which the Government responded, included:
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maximum stakes and prize limits (both gaming machines and online products);
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controls on how online gambling products are designed;
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resourcing of, and fee structure imposed by, the Gambling Commission;
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management of gambling related harm and associated health issues;
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management of problem gambling (including self-exclusion);
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prevention of underage gambling; and
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monitoring the effect of gambling advertising.
We shall be providing further regulatory updates in due course as the DCMS’ review of the Act develops.
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