Worst-case scenario
What are the sector’s worst fears about the White Paper? And the Post details the issues around affordability.
Welcome to the latest edition of Pinchpoint, your go-to source for news and practical insights into affordability and financially responsible gambling.
The calls get louder by the day: what the industry, its promoters and its critics want most from the government is clarity over regulation and even the regulator themselves.
In this issue, we take the temperature from some leading figures in the industry to find out what they want – and expect – from the White Paper and speculate on what might happen if it never appears.
Meanwhile, the Racing Post gives us more examples of how the present uncertainty is causing havoc in the real world of customer interaction.
Hoping for the best
The UK gambling industry and those with an interest in its fate are waiting impatiently for some direction from the government over the impossibly delayed White Paper.
In the opinion of the experts canvassed by Pinchpoint, we will at least get to see a White Paper. What it might say, and where it might lead, is less clear.
Careful what you wish for
The general tenor of the industry is one of frustration over trepidation.
“After such a long prolonged period of uncertainty for the gambling industry, surely there must be calmer waters somewhere up ahead,” says Peter Hannibal, CEO of the Gambling Business Group.
“The White Paper never appearing seems unlikely, as the Government will not want to go into the next election having failed to deliver on their manifesto promise,” says Melanie Ellis, partner at Northridge Law.
Best-laid plans
So what might we expect from the final report? First, crucially, despite the fact that the White Paper has the potential to set the regulatory framework for the industry for a generation, there appears to be very little appetite to put any proposals to the test of having any actual new legislation put before Parliament.
“In the present political and economic climate, it is extremely unlikely that the White Paper will include a draft bill for consideration by Parliament,” says Gemma Boore, senior associate at Harris Hagen.
“The Government, quite rightly, has other priorities and the leaks over recent months have suggested that the final White Paper is likely to contain choices, rather than clear recommended courses of action.”
Ellis suggests that a swift move from the consultation phase through to the implementation of the majority of the proposals would also be a good outcome. “This would of course require a sufficient level of detail and direction in the White Paper to avoid further delays as the GC considers options for implementation,” she adds.
Hannibal agrees that at least a portion of whatever is included in the White Paper will likely be effectively fast-tracked into the Licensing Codes and Conditions of Practice (LCCP).
But he adds: “We would hope that the latter is subject to a clear instruction from the DCMS that the Gambling Commission undertake a proper consultation process that takes into consideration input from all stakeholders and if implemented, is reviewed regularly for any unintended or unforeseen consequences.”
Boore agrees. “In the best-case scenario, the White Paper will clearly and concisely set out DCMS’s views on each of the topics that were covered in the call for evidence,” she suggests.
“Make suggestions for reform to address any issues identified; and perhaps most critically, define the specific steps that will need to be taken to achieve the changes that DCMS recommends.”
No White Knight
Yet, it is the issue of how much the DCMS will be handing across much of the detail of the implementation of whatever proposals are contained within the final report that is perhaps the biggest area of concern for the sector.
This is particularly the case with the vexed issue of affordability.
“In my view, the worst outcome is that the issue of affordability is only vaguely and/or partially addressed,” says Ellis.
“For example, the White Paper sets out a requirement for an affordability check before customers are allowed to stake above a certain figure on slots products, but does not address what that check should entail nor what is required for use of other products or overall spend.”
This would put these difficult issues back into the GC’s remit “with an unknown wait for formal guidance and the possibility that such guidance will be unrealistic and fail to properly balance the risks of customers overspending with the risks of them turning to unregulated operators”.
The industry is understandably fearful of what it might mean if the Commission takes a lack of direction from the DCMS as a licence to make the policy headway on its own recognizance.
“DCMS needs to be very blunt with the Commission and tell them their job is to regulate gambling not to try and reduce the number of problem gamblers to zero (an impossible task) and not to act as an enabler and platform for anti-gambling groups,” says Steve Donoughue from the secretariat of the Parliamentary All Party Betting & Gaming Group.
But he fears that this may no longer be a viable hope. “I believe that the White Paper will have little impact considering the ideology of the Commission and the scope of their unaccountable powers,” he says.
No the end of the saga
Perhaps the most salient point about the White Paper is that, almost regardless of what is actually contained within it and whatever degree of instruction from the DCMS is signalled post-publication, the fact is that it won’t be the end of the story. Indeed, far from it.
“It will not be the panacea desired by those opposed to gambling, nor will it provide the certainty or restraint desired by industry,” says Boore.
“As a result, the issues raised by the White Paper will continue to form the backbone of highly politicised debates in Parliament and the media, through the reform process and beyond.”
Indeed, the debate is almost certain to outlast the current government and this is the cause of Hannibal’s worst fears. He points out that should there be any need for legislative moves, it means that the parliamentary action would bleed into 2024 when a general election would loom.
“The industry still carries the scars from the ‘wash up’ that happened with the 2005 Act and we have no desire to see it repeated,” he says.
“Potentially worse, would be a new government tearing up the White Paper and starting over or even calling a halt to its progress altogether.”
The UK gambling industry knows all too well now about what it means to be stuck in limbo within the creaking machinery of government. While there are valid fears about what comes next, it would clearly be in its interests for the White Paper to be published forthwith.
It would at the very least give everyone – operators, suppliers, the regulator and the government – a chance to understand where the industry stands. It may not be a full reset, and it would leave open as many questions as it answers, but in a world of messy compromises, it will have to do.
Beever-town
The Racing Post has tenaciously been following the debate around affordability and what effect the current efforts by the operators to follow UK Gambling Commission advice (or lack thereof) on customer checks are having on the unfortunate consumers who trip the invisible wire marked “bank statements”.
The nitty gritty
One of the stories in the Post indicates how the current pressures around regulation are causing less-than-satisfactory outcomes. The story focused on professional punter Joe Beever and his experience with Smarkets.
Talking about an incident in the summer of 2021, Beevers spoke about how the operator had gone through a series of checks including needing evidence from bank accounts, stockbroker statements and his tax return.
"With Smarkets, I felt like I was being interrogated,” he said of the process.
The context for Beevers’ experience is instructive though. He wasn’t to know it, but at the time, the company was going through a regulatory enforcement process that in August 2022 would result in a £630,000 fine.
Sources point out that understandably the customer services representatives who were dealing with Beevers were “understandably jumpy” about what information they thought it was now necessary to collect.
Conclusions shouldn’t be drawn from this one case, or from the other experiences detailed in the Post in recent months.
But is it instructive to see how words and actions in the realm of regulation have real-world consequences and how the laced issue of affordability needs to be much more clearly defined. Technology can help – but so can common sense.
Further reading 1: “(Gambling minister Paul) Scully's comments that there are better and less invasive ways to deal with the issue of affordability checks will be welcomed by the betting and racing industries alike.” A thoughtful Bill Barber editorial in the Post.
Further reading 2: “I know the BHA met with the Minister and met with the Gambling Commission, and it looks as if what the politicians are going to come up with is not as perhaps scary as some of the stuff that is going on at the behest of the Gambling Commission.” Charlie Parker, CEO of the Thoroughbred Racing Group and Racecourse Owners Association in SBC News.
Noted
UK Gambling Commission deputy CEO Sarah Gardner speaking to the Danish equivalent earlier this month: “We also see a number of the largest operator groups stating revenues are down due to safer gambling measures they are introducing in terms of stake limits and affordability measures they have taken.”
Plug
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About
The newsletter is published independently under the editorial supervision of Scott Longley of +More Media. Pinchpoint is not affiliated with any other publications. Pinchpoint is funded by Department of Trust and BetBudget.
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Contact
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