Gambling advertising clampdown announced as regulators wade in
The Campaign for Fairer Gambling provides an update on the campaign to reduce FOBT stake levels as the sector awaits the decision from DCMS now the Government's consultation has closed.
On January 23, the day the Government’s gambling review closed, the Gambling Commission issued a statement welcoming new research by Citizens Advice. At the same time, Citizens Advice published a briefing on their “Out of Luck” report “calling for a mandatory levy on gambling companies to fund support”, which had been submitted to the DCMS review.
The Gambling Commission, the Responsible Gambling Strategy Board (RGSB) and DCMS have all previously been resistant to imposing a mandatory levy. However, this position has been endorsed by the think-tank ResPublica, which called for a levy to be set at 1% of operator revenue to bridge the gap between treatment for gambling addiction and the funding available for drugs and alcohol.
Citizens Advice outlines recommendations in a summary of their report regarding the levy, research, a more pro-active gambling sector and more involvement by banks and creditors. The recommendations on research effectively imply that the RGSB research recommendations have not been delivering. While GambleAware, previously the Responsible Gambling Trust (RGT), is still named as the body responsible for commissioning for research, there is uncertainty if it could continue as a charitable entity under mandatory funding.
Two days later the Gambling Commission called for evidence “on proposals to make gambling more fair and open”. The consultation closes on April 22, so is there a chance that a DCMS review announcement will be on April 23?
Then on February 1, the Gambling Commission announced “Online firms told to take immediate action against unfair terms and conditions”. The same day the Competition and Markets Authority (CMA) told the gambling sector to “raise its game” following a joint investigation between itself and the Gambling Commission
The motto of the Gambling Commission is “Keeping gambling fair and safe for all”, and ensuring “fair and open” gambling is one of the three licensing objectives. The Gambling Commission claims that the CMA principles “make real progress in making gambling fairer and safer for customers.” There was no explanation as to why it had taken 10 years to get to this position.
The CMA action changes how bonus offers will be allowed to function in the future, but does nothing to impose any penalties on operators that have profited from unclear terms and conditions. The Gambling Commission declared, as it has often done, that “we will not hesitate to take action against those that do not treat their customers fairly”. So why the 10-year hesitation and why no penalties imposed by either the CMA or the Commission?
One clue as to how poorly the Commission understands gambling is the line that “customers can understand the deals they are signing up to and what they need to do to fully benefit from the promotions”. The promotions are actually player acquisition tools that serve to force customers to gamble at activities, mainly slot games, that they would not normally choose to gamble on, if they are to be permitted to withdraw their money. The terms require much longer sessions, more frequently and for higher stakes than they would gamble otherwise.
The promotions are designed to appeal to those with low competency in understanding gambling and take those customers closer to at-risk behavior, the pathway to problem gambling. There is virtually never any intrinsic value in the promotions as they are designed to offer negative equity value. But the Commission seems to view them as of some “benefit” to the customers.
On February 14 the Commission welcomed “tighter gambling advertising standards”, announcing new rules by the Committee of Advertising Practice (CAP) to be enforced by the Advertising Standards Authority (ASA). This was followed by the Commission announcing that GVC would be fined £350,000 for a succession of breaches of a previous ASA ruling, reported in the Guardian.
This related to the ASA upholding a complaint against a Bwin “free” bonus in 2016. This was a repeated offence though, and other breaches attributable to ElectraWorks, which is part of GVC. This is the entity that is offering to buy Ladbrokes for at least £3.2 billion, re-inforcing how trivial the fine is. At least the CMA is looking into the deal.
Between the Commission, Citizens Advice, the CMA, the CAP and the ASA there is an awful lot happening, giving the impression that everything is moving in the right direction for those who advocate consumer protection. The real test though will be if DCMS is willing to get to where it should on FOBT stakes - at a £2 maximum per spin.