The Gambling Commission holds a 'Raising Standards' Conference

Posted On: 
30th November 2017

The Campaign for Fairer Gambling asks questions about the Gambling Commission and the ongoing consultation into the gambling sector.

Credit: 
PA

Whilst the Gambling Commission motto is “keeping gambling fair and safe for all,” it has decided that gambling still needs to be made fairer and safer after all. This was the key message at their recent “Raising Standards Conference”.

In order to raise standards, the Commission has generated a three-year strategy, identifying several priority areas. Improving its own regulations, improving independent dispute resolution and optimising returns to good causes from lotteries all seem to be issues that are within the remit of the Commission itself. Protection of consumers and the prevention of harm are areas where the Commission expects more from the operators.

The Commission position is that the pace of change of operators to protect customers has been too slow. Its Chief Executive, stated “… those who do not deliver for the consumer will find themselves in an uncomfortable position, with their future in this industry increasingly in peril.”

Taking into account that this is a three-year strategy, what impact does this warning have on shareholders, hedge funds, venture capitalists and the like who are interested in short term returns and are happy to move their money around? Similarly, many senior executives are bonus-orientated and committed to personal careers rather than any loyalty to the company, or even the sector they are in.

The main concern for share analysts relating to the current DCMS consultation is not that measures controlling the sector are pending, but that it creates uncertainty. The bankers, lawyers and auditors are all happy if certainty delivers a few merger and acquisition opportunities for them. Similarly, senior executives are happy to focus on their benefits if such opportunities arise. William Hill have already held “preliminary talks” about a possible merger with CrownBet.

Even if a sale is a fire-sale in the corporate world of today, there are enough professionals who make enough cash when the deal gets done. The concepts of “uncomfortable positions” and “peril” are not specifically threatening to operators such as the remote gambling companies that went offshore, traded in jurisdictions where the activity was not legal, obtained revenues through inappropriate payment processing, have relationships with unidentified affiliates and still objected to paying a point-of-consumption gambling tax. Many of these executives have already exited or are planning exit strategies.

Andy Hornby is the disgraced ex-HBOS banker, but is now the Gibraltar-based man pulling strings of Ladbrokes CEO, Jim Mullen? Why would the Gambling Commission consider him suitable to prevent harm and protect consumers? Mr. Mullin admitted at the conference that the industry needs tighter regulation. Years ago, former CEO of William Hill Ralph Topping told a Nevada hearing that William Hill will stop doing something when they are told to. No matter how toughly the Commission asks, asking is not enough. Trying to nudge operators is as useless as trying to nudge gamblers.

Another Commission position is that it is time to take action on unfair terms and conditions, and it has joined forces with the Competition and Markets Authority (CMA) to do so. Misleading practices and breaches of consumer protection law are the main concerns. But the Commission is identifying this as a three-year strategy, and the CMA, which is yet to act, is going to step up action in the New Year. Originally it intended to act in December, but is the government now delaying this to prevent CMA disclosures influencing submissions to the DCMS consultation which closes on 23 January?

There are some Campaign recommendations which would make life easier for all. The remote operators are in competition with each other, so if all TV advertising was banned, all operators would enjoy a decline in marketing expenses. If sign-up and bonus offers are not allowed, then issues over misleading terms and conditions fall away. If the funds deposit procedure was as detailed and cumbersome as the withdrawal procedure, then reservations about withdrawal procedures fall away.

Allowing limited verification on depositing encourages both underage access and fraudsters.  The existence of offshore sites illegally accessing British gamblers should not be a justification for lax regulation or enforcement. It should be a motivator to bring in stricter controls against the illegal activity.