4 Conclusions
37. In considering the suitability of the merger
of the National Lottery Commission with the Gambling Commission,
we have weighed up the advantages and disadvantages of the proposal.
The financial savings that would be derived from the merger are
relatively small and would involve proportionately high upfront
costs but, provided the regulator can avoid the appearance of
bias with the consequential danger of judicial review, the move
would be cost effective in the long run. Benefits will also arise
through a consistent approach to regulatory issues which are common
to the National Lottery and the competitive gambling sectors.
We believe the main disadvantage will be the inevitable residual
perception of bias that will arise given the conflicting duties
which would be undertaken by the merged regulator. We
conclude that the case for bringing these two regulators together
under the provisions of the Public Bodies Act is justified but
it will be important that safeguards are put in place by the Gambling
Commission to ensure its motives and actions are clear, logical
and not liable to challenge. To
counter any perceptions of bias the Gambling Commission will need
to be able to demonstrate clearly how its decisions are taken
in accordance with either the National Lottery or gambling legislation.
38. Key to a successful union of the Gambling
Commission and the National Lottery Commission will be the transparency
of the regulator's governance arrangements and the way it communicates,
especially when there may be an apparent incompatibility in its
duties. To mitigate any conflicts—or,
indeed, perceived conflicts—of interest arising, we recommend
that the Gambling Commission outline the governance arrangements
it is to put in place to ensure a robust separation in its duties.
We recommend that the detail of these arrangements be published
in time for the debate in the House on the draft order.
39. We recommend that the Department
for Culture, Media and Sport outline what steps it will take to
monitor the Gambling Commission's execution of its combined duties
and what action it will take should there be evidence that the
return to good causes is suffering as a result of the merger,
or that gambling operators are being treated less favourably owing
to the new regulatory arrangements.
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