The UK Government’s Department for Culture, Media and Sport (DCMS) recently issued a command paper titled “High Stakes: Gambling Reform for the Digital Age”. Presented to Parliament by the Rt Hon Lucy Frazer KC MP Secretary of State for DCMS several months ago, the white paper establishes the most comprehensive package of new measures for gambling regulation in the UK since the 2005 Gambling Act. The critical department in Whitehall will work with the UK Gambling Commission (UKGC) to find “the balance right between consumer freedoms and choice on the one hand, and protection from harm on the other”.
Gambling Oversight in the Smartphone Era
The Rt Hon Lucy Frazer, Conservative MP for South East Cambridgeshire, stated in her ministerial forward that the government and regulators are “determined to strengthen consumer protections and prevent exploitative practices”. In collaboration with the Gambling Commission, the DCMS pledges to:
- Make UK online gambling websites safer by revising game design guidelines to exclude elements known to “exacerbate risks” and imposing new obligations on operators to curtail “unchecked and unaffordable spending”.
- Combat aggressive advertising tactics including the overuse of bonuses that worsen problematic patterns.
- Create independent messaging that highlights the risks of gambling while dispelling the stigma preventing individuals from seeking help.
- Create an ombudsman with the help of the sector to listen to complaints and impose reparations when anything goes wrong.
- Modernize laws governing land-based gaming and ensure that all gambling is regulated by a stronger, better-funded and robust Gambling Commission that can fully leverage data and technology.
A Targeted System of Financial Risk Checks
The DCMS and Gambling Commission are working to implement changes in the regulatory landscape set out in the white paper immediately. Among a range of targeted interventions are updates to account-level protections, focusing on three key UKGC risks:
- ‘Binge’ gambling.
- Significant unaffordable losses over time.
- Financially vulnerable customers.
The reforms propose a targeted system of financial risk checks proportionate to the risk of harm occurring. Financial risk checks will start with “unintrusive checks at moderate levels” of spending (£125 net loss per month or £500 per year). Then, if necessary step up to checks which are “more detailed but still frictionless at higher loss levels where the risks are greater” (a £1,000 loss per day or £2,000 within 90 days).
Could the Reforms Lead to a Rise in Black Market Gambling?
A recent survey commissioned by the Betting and Gaming Commission (BGC) conducted by YouGov found that 67% of gamblers believe the government-imposed spending limits would push users to the black market.
The BGC’s CEO, Michael Dugher, pleaded with the government to monitor the poll’s findings:
“Any changes introduced by the government must be carefully targeted so that we protect the vulnerable and intervene on those showing signs of harm,” Dugher stated, “while not driving the vast majority of millions of punters who bet safely towards the growing unsafe black market online where there are none of the safer gambling protections used by BGC members”.
The UK government and industry regulators must consider the effects that new measures will have on participation and the expanding gambling industry overall. The unintended consequences of pushing punters to unregulated operators could have profound implications and negate the original reasons for reforms.
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