Is the Gambling Act fit for purpose?

Posted On: 
6th September 2017

The Campaign for Fairer Gambling explains why it believes the 2005 Gambling Act is no longer fit for purpose.

A high street betting shop
Credit: 
PA

Newsnight was just one of the many media outlets that reported on online gambling firm 888 getting handed a fine from the Gambling Commission for failing to uphold self-exclusion. Tom Watson MP explained that the 2005 Act was from an analogue, rather than a digital age, and was no longer fit-for-purpose.

The Budd Report reviewed gambling in 2000, but after publication, consultation, and legislation, drafting new legislation took many years until the Gambling Act was passed in 2005. Whilst FOBTs and remote gambling were making inroads by then, not been enough attention was paid to them by Budd or the Act.

As the Gambling Commission was established by the Act, it therefore follows that it is not fit-for-purpose. Similarly, the close relationship between the Responsible Gambling Strategy Board , which is appointed by the Commission and GambleAware, an industry-funded charity, is not fit-for-purpose either.

Reviewing the Commission statement on 888, the total penalty applied was over £7.8 million. Regarding the 7,000 self-exclusion failings, 888 notified the Commission in February. In respect of the problem gambler who staked £1.3 million in the year leading up to October 2015, there is no Commission awareness date identified. The Commission does not comment on the fact that 888 has over 270 sites and brands – is this to create the illusion of “customer” choice?

In common with many operator failings, it was police proceedings over associated criminal activity that identified the issue. Simply, the Commission itself does not have the capacity to initiate adequate operator investigations.

The “customer” had stolen £55,000 to fund the habitual gambling so was using proceeds of crime, which was therefore money-laundering. There was no mention of this is in the statement, which was another failing of both 888 and the Commission.

It took the Commission six months to arrive at these findings, with investigative expenses of only £12,000 (just £2,000 a month). Either investigators are poorly paid, it was not a thorough investigation, or both. But why did it take so long to impose a fine of less than £8 million?

As soon as the statement was made public, 888 share prices rose by 5%. A company with a valuation of around nearly a billion pounds is not impacted in any way by such a trivial penalty. Until names are named, heads roll and criminal prosecution of executives is a real threat, why will anything change?

The BBC was one of many outlets highlighting Ladbrokes’ repeated hospitality to MPs, Tories Philip Davies, Laurence Robertson, Dr Thérèse Coffey and Labour’s Conor McGinn. Ladbrokes claim this is part of their knowledge dissemination process. Wining, dining and a few quid on a winner must make knowledge absorption easier!

An Observer front-page article headlined “Government prepares clampdown on fixed-odds betting” did disclose a source saying that the maximum stake is still “up for negotiation”. Hopefully this is not government negotiating with the bookies!  

Lack of Commission concern for the vulnerable was highlighted by two Guardian stories “How betting firms retarget ex-gamblers” about data compliers identifying the more vulnerable demographic and “Tipsters deliberately recommend losing bets to customers”. By definition, someone following tipsters is vulnerable. For this reason, Sky Bet has since announced they are ending their UK affiliate programme.

Another licensing objective is that gambling should be “fair and open”. Affiliates profiting from giving losing tips cannot be considered a “fair and open” practice by any stretch of any imagination. However, the Commission has allowed this practice to fester, asserting that operators have to be “responsible” for their affiliates.

As operators fail to identify at-risk gamblers and money-launderers, how can they be trusted to manage their affiliates? Do they even know who the true beneficial owners of the affiliates are? Are the affiliates engaged in tax evasion, an organised crime operation, or funders of terrorism?

It is the remote bookies in particular who benefit from the losing tips scam. Not fit-for-purpose applies to the bookies, the remote sector and everyone involved in prolonging this travesty of “customer” choice.