Gambling Review... So Much is Missing... by Neil Channing
When the Gambling Review was first announced in December 2020, we were promised a "once-in-a-generation" chance to take a good look at the industry, to raise standards and to promote safer gambling. If that often-repeated phrase means the industry will be left alone for 25 years once this process is done, then it's going to be pretty disappointing if we fail to sort out so many of the problems that anyone involved can see need sorting. The constant focus on the small minority of Problem Gamblers and the larger group of potential Problem Gamblers is totally understandable as it's certain that parts of the industry have acted shamefully in the past, and some still need to raise their game. The cases of suicide that have been in the news recently are, of course, tragic and nobody in the industry or amongst the gambling population, wants operators to be allowed to proceed in the way they sometimes have in the past. While not in any way disparaging the tragedy involved in many cases of gambling harm, I would say that it's a somewhat easy area for politicians to focus on, as it's very hard to find anyone who disagrees with the idea that gambling harm should be reduced. This focus has meant that many other areas have been ignored in the debate.
We have a massive industry worth billions to the exchequer and it's regulation in some areas is totally light touch or non-existent. Many people would argue that the Gambling Commission have a very tough job to do and that roughly 300 staff and an annual budget of around £25m is not enough to do that job properly, although in my experience it's hard to find anyone who really thinks they'd do any better if you quadrupled both figures.
Take consumer protection. Gamblers in this country often deposit large amounts with bookmakers and if Affordability Checks become law and affect all customers then there will be a temptation for bigger bettors to keep larger deposits and to not withdraw winnings. How safe will that money be?
The GC allows licensees to simply choose how much protection they would like to give to customer funds and there are three options which are "Not Protected" where your money is "in the pot" and part of the business in the event of the operator going out of business, "Medium Protection" where your funds are insured and "High Protection" where funds are ring-fenced and are separate from the business. When applying for a licence the operator simply chooses which they prefer, and it's often only shown in very small print on the website. The GC could insist that all firms offer High Protection if they wish to hold a licence. This would potentially favour the larger operators and make it harder for new entrants to the market and thus it would stifle competition, but it does seem crazy to me that firms can simply look at the top level of protection for their customers and decide they simply don't fancy it.
We also have the cases where companies decide to stop trading or leave the UK market without going bankrupt or having any financial difficulty and also where they simply decide to focus on areas of the business other than sports betting, as has happened with MansionBet this week. When these things happen the companies, themselves have made decisions on what happens to bets that are yet to be settled, with some firms saying they will honour all bets at their conclusion, some saying they will refund stakes and others saying they will pay all out as winners. This just strikes me as totally ridiculous and it's not hard to consider a scenario where a company might offer enhanced, bigger than all competitor, prices on future events and then decide to cease trading and refund stakes if things don't look to be going well. How can that possibly be the decision for the operator to make and how can the regulator not be involved? Many would ask whether the regulator should have to refund customers if a licensed and regulated operator does go down taking the customer funds with it, but of course the tax-payer is not going to be happy to be seen to have to bail out bookmakers.
This whole area is currently extremely messy and very poorly regulated, and a true once-in-a-generation review would have discussed it and would sort it out.
Dispute Resolution is another area that I've yet to see discussed in the review yet it's a massive problem.
In many jurisdictions around the world the gambling regulator makes all the rules relating to sports bets for the operators and while I wouldn't really trust many employees of the GC to know whether overtime should count in all NFL bets or what ought to happen in tennis matches where a player withdraws in the 2nd set, I do think it's crazy to have different rules with different firms. It really ought to be possible that the UK industry established a gold standard of rules for all eventualities and once written they should be adopted by all operators as a condition of holding a licence.
Currently betting disputes in this country are generally handled by the Independent Betting Adjudication Service (IBAS). They are often criticised for being funded by the large betting companies and for the overwhelming number of cases being found in favour of the operators rather than the customer. The problem here is largely that many disputes involve customers "trying it on" over palpable errors or the dispute involving a long established precedent where the customer simply won't accept the rules of the company. Many disputes do come down to poor levels of customer service where the rules are not well known by the staff and the customer has not had the situation explained properly. On the latter point it's well known that some operators have invested money and have a decent level of customer service with agents who understand the products and who can deal with basic queries pretty efficiently and others just don't want to pay the money and thus have untrained staff and way more disputes. The regulator should really clamp down on this and there should be set standards that have to be met to hold a licence. One of the reasons that IBAS tend to settle more cases in favour of the operator is that punters take cases to them where it is ridiculously obvious that the operator is in the wrong but they just won't accept it and as soon as IBAS point this out the operator settles in favour of the punter but the case doesn't go to adjudication and doesn't count as one up for the punters. Operators who are serial offenders in these circumstances should be penalised.
Despite the fact that I think IBAS do a pretty good job in very difficult circumstances, I do think they are always going to be seen as "working for the industry" and not independent. They also don't rule on lots of issues that come up more recently that are associated with the production of paperwork for Anti Money Laundering and Affordability slowing down or stopping payment.
Many punters now find themselves resorting to either threatening legal action or indeed going to the small claims court, to recover quite small amounts of money, (by definition), that should have been paid immediately if the operator had staff with a clearer understanding of the rules, or if they weren't given free reign by the regulator to police themselves. Recently the number of disputes that involve customer funds being withheld for the non-production of Know Your Customer, Anti-Money Laundering or Affordability Checks related paperwork have been growing and the decision of the GC in 2019 that operators cannot hold-up customer payments where the customer is being asked for documents they should have been asked for much earlier in the process, seems to have led to zero fines as far as I can see, (companies who don't ask for paperwork when you first open the account should never use the non-production of that paperwork as an excuse to not pay you when the account is closed).
There has been talk of an Ombudsman being set up to deal with these kind of issues and I could see the White Paper possibly including this and perhaps a private sector Ombudsman being introduced in the way it has been in the motor trading, rail and pensions industries. I don't really see the government wanting to set up a new public sector organisation although I could see an argument for this to all come under the remit of the GC and for IBAS to become redundant.
There are so many options and differing opinions in terms of how to proceed with these issues which most people with any knowledge of the industry would accept have been a problem for years. If we are truly to see a once-in-a-generation change then we need to see some action but I'd bet pretty heavily that most of the things I've talked about here don't get much of a mention. To me that is a huge shame and it's one that I'd bet heavily the politicians won't even have thought about.
If you want to write to your MP and tell them what you think about the Gambling Review there is still time. The White Paper showing what will be in the Gambling Act is probably seven weeks away from publication and a lot of letters going in can create the pressure that brings change. If you want to use my template letter you can click here...
Do make the effort to send off a letter to your MP. I've written one for you here