1 Executive Summary
Background
1.1 The Gaming Board for Great Britain (GBGB) is the regulatory
body for casinos, bingo clubs, gaming machines and larger society
and all local authority lotteries in Great Britain. Following
the recommendations of the Gambling Review Report - "The
Budd Report", the Government's response "A Safe Bet
For Success" set out its intentions for future policy, including
the introduction of a Bill to modernise gambling law. The legislation
will include provision for a single regulator - the Gambling Commission.
The Purpose of this Report
1.2 In the light of the proposed legislation, PKF was commissioned
by GBGB and DCMS to undertake a scoping study to:
- Describe the full range of tasks falling to the Gambling Commission;
- Estimate the resources required and costs of
carrying out these tasks;
- Consider how the Gambling Commission should be
organised to carry out these tasks; and
- Make recommendations concerning the establishment
of the Gambling Commission.
1.3 This report is the output from the scoping study.
The Tasks of the Gambling Commission
Key Objectives
1.4 The key objectives of the Gambling Commission will be
to regulate all activities relating to gambling within Great Britain,
to ensure the prevention of crime and disorder (arising from or
within gambling activities), to ensure that gambling be conducted
fairly and players know what to expect and to ensure the protection
of children and the vulnerable from the harmful effects of gambling.
These objectives are similar to those of the existing Gaming Board.
Scope and Responsibilities
1.5 The scope of the Gambling Commission's authority will
include the entire gambling industry, except the National Lottery
and spread betting, to bring all operators within a single system
of licensing and regulation. This includes the regulation of betting
and on-line gambling; sectors not previously regulated by the
Gaming Board.
1.6 The core responsibilities of the Gambling
Commission will be licensing gambling operations, monitoring licensed
gambling operators and enforcing licence conditions, investigating
and detecting illegal gambling, providing advice and guidance
and handling complaints and queries. Of these responsibilities,
some are currently being performed by the Gaming Board but will
now need to be applied to additional sectors. Other responsibilities
will now require a change in emphasis as a result of new legislation.
Other responsibilities will be wholly new.
1.7 Section 3 of this report sets out the tasks
falling to the Gambling Commission in more detail.
The Costs of the Gambling Commission
1.8 Having established the terms of reference of the Gambling
Commission, we built a business model which allows the future
ongoing resource and cost requirements of the Gambling Commission
to be estimated under different future scenarios.
1.9 The model was constructed using the current
Gaming Board business as a base and it extrapolates the resources
utilised on current activities by using agreed projections of
future activity levels. Where new activities will be undertaken,
the nature, amount and level of the activity was considered and
the likely resource requirement modelled. Current overhead ratios
were projected forward, together with a recommended efficiency
gain of 15% across the business, based upon our view of the likely
economies of scale and opportunities for improved use of ICT.
The model was then subject to a 10% sensitivity factor to establish
the final figures.
1.10 In short, the model, described in more detail
in Section 4 of this report, indicates that the Gambling Commission
will be an organisation of some 200 staff, with operating costs
of between £9m and £11m. Transition and implementation
costs are not included in these figures and will now need to be
calculated separately.
The Organisation Design of the Gambling Commission
1.11 Four potential options for the future organisational
structure of the Gambling Commission have been identified and
evaluated in this report against agreed criteria. Three of the
designs, which were primarily sector driven (casinos, machines,
betting etc.), were ruled out of contention because they failed
to meet one or more organisation design criteria.
1.12 The recommended design is a function-based
organisation structure, offering a single Operations Directorate,
organised by function (licensing, enforcement etc.) with a separate
Remote and Machines Unit organised by sector, and a separate Policy
Directorate organised by function, then by skill.
1.13 The recommended organisation design is illustrated
below:
Implementation Plan
1.14 In order for the recommendations of the scoping study
to be further developed, validated and implemented, a framework
implementation plan forms part of this report. This consists of
three main phases, underpinned by appropriate project management
disciplines and agreed milestones as illustrated overleaf, with
indicative timescales:
1.15 There are a number of factors which will
influence the implementation plan. These include the timing of
new legislation, the timing of senior management and Commissioner
appointments and the ability to commit expenditure under the auspices
of the new legislation. As soon as these factors are clearly understood,
the implementation plan will need to be revisited to ensure that
it is driven by the desired timeframes.
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