Gambling regulation – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Culture, Media and Sport Committee

Related inquiry: Gambling regulation

Date Published: 21 December 2023

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Summary

Nearly half of British adults gamble regularly, benefiting a gambling industry worth more than £14 billion a year, one of the largest in the world. Most people who gamble do so without issue; however, around a third of a million people experience problem gambling, and it is likely that many more suffer gambling-related harm. The Government has a duty to ensure that gambling regulation makes the activity safe for all, while allowing those who enjoy gambling the freedom to do so.

The legislation underpinning gambling regulation in Britain is the Gambling Act 2005. The Act liberalised gambling and established the Gambling Commission as the sector’s regulator and licensing body. Gambling has changed dramatically since then, largely because of the massive growth in online gambling. Most people who gamble now do so online, increasingly via smartphones, with the online sector now dwarfing traditional, land-based forms of gambling in terms of revenue. This shift led the Government to launch a review of the Gambling Act 2005 in December 2020, to ensure that gambling regulation “is fit for the digital age”. After repeated delays, the Government published the Gambling White Paper in April this year. Its proposals will entail the most significant reform of British gambling regulation since the 2005 Act. These proposals have been the focus of our inquiry.

The greatest challenge for the Government’s reforms is one of time. Nearly all the White Paper’s measures will be subject to consultation to work out their technical detail. The delay to the White Paper means there is at best a year remaining in the current Parliament for the Government to conduct these consultations and then implement the finalised reforms, several of which will require secondary—and in a few cases, primary—legislation. We are concerned that no mention of gambling legislation was made in the King’s Speech. The Government must also ensure that the Gambling Commission, which is to lead on several consultations and oversee the implementation of the White Paper’s reforms, is suitably resourced.

The Gambling White Paper proposes a set of enhanced protections for online gambling consumers. The most prominent of these is a system of financial risk checks to be conducted by gambling operators on customer accounts that lose certain amounts of money within given timeframes. We support the principle of these checks but consider that there is work for the Gambling Commission’s consultation to ensure that they are suitably “frictionless”. We recommend that the Commission conducts a full pilot of the system before it is fully implemented. The White Paper also proposes introducing a stake limit for online slots games, which have the one of the highest associations with harm of any gambling product. We consider that this stake limit—currently subject to consultation—should be in line with those for electronic gaming machines found in the land-based sector and not exceed £5. We support the Government’s approach of establishing additional online protections for young adults aged 18–24, through a lower stake limit and thresholds for triggering financial risk checks.

The Government also proposes reforms relaxing some of the Gambling Act’s restrictions on land-based gambling operators, particularly regarding the availability of higher-stake electronic gaming machines in several types of gambling premises. We agree that the availability of equivalent online products means these restrictions are now less relevant, but the Government and the Commission must carefully monitor the impact of these changes on the risk of harm. We also support the introduction of cashless payments on electronic gaming machines, subject to safeguards and provided that the option to pay with cash remains available. A proposed new power for local authorities to use cumulative impact assessments in handling gambling premise licensing applications is welcome.

The Government has proposed changes to the regulation of gambling advertising, including new rules around direct marketing and promotional offers. These are welcome in themselves, but we consider that the Government should have taken a more precautionary approach to gambling advertising and sports sponsorship overall, particularly to reduce children’s exposure. Another major risk to children is the increasing blurring of the boundaries between gambling and video games, as seen through the example of loot boxes. The Government has put forward separate proposals regarding loot boxes specifically, but we are not convinced that the existing regulatory framework will be adequate to address this wider trend.

The White Paper proposes that the Government will introduce a statutory gambling levy on gambling operators to fund problem gambling research, prevention, and treatment, replacing the existing voluntary funding system. This is a long overdue reform and will ensure a significant uplift in long-term funding as well as improved transparency in the commissioning of research and services. We support the proposed model of governance and structure of the levy, but the Government must ensure that funding is ringfenced and directed towards targets for reducing gambling harm, set out in a new national strategy to reduce gambling harms. The Government must also ensure that currently voluntary sector treatment and prevention providers are fully supported during the transition to the statutory levy.

The White Paper also set out the creation—led by the gambling industry—of a gambling ombudsman to adjudicate disputes between gambling operators and their customers which relate to social responsibility failings. This is a welcome measure and will address the current gap in redress with respect to such complaints. We recommend that the ombudsman should be the sole redress provider for all types of gambling consumer dispute adjudication.