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Fri, 4 December 2020

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'Complacent' regulator failing to protect consumers from problem gambling, MPs warn

'Complacent' regulator failing to protect consumers from problem gambling, MPs warn

MPs have criticised the Government's “lack of urgency” in tackling problem gambling

5 min read

The Government and the gambling regulator have been “complacent” over the risks of problem gambling and have “failed to adequately protect consumers” from its impact, MPs have warned.

The Commons Public Accounts Committee, which assesses value for public money, has accused both the Department for Digital, Culture, Media and Sport, and the Gambling Commission, of having “an unacceptably weak understanding” of problem gambling and of a "lack of urgency" in tackling this issue. 

There are an estimated 395,000 problem gamblers in the UK, of which more than 50,000 are between 11-16. A further 1.8 million people are considered ‘at risk’. The impacts can be devastating for people and their families – as well as financial losses, problems with gambling can lead to mental health issues, home loss, family and relationship breakdown, criminality and suicide.

“It’s an issue where vulnerable people are potentially being exploited and the regulatory system isn’t working for them,” James Wild, Conservative MP and member of the PAC, tells The House.

A non-departmental public body, the Gambling Commission operates within the constraints of a legal and regulatory framework which includes the Gambling Act 2005 which the Government has committed to review. Currently, the Commission is funded by license fees from gambling operators, amounting to £19m in 2018-19 – however this compares to £11.3bn gambling yield for operators in the same year.

Gambling operators have committed to spend £60m to treating problem gamblers. The PAC report criticises the “lack of urgency” from DCMS in tackling problem gambling, questioning why industry has been expected to voluntarily treat the problem, rather than the Commission taking active steps to stop the problem in the first place.

“They’re far behind where the political and public views are on this issue”, says Wild. “This is a public health issue but again wasn’t treated in the same way and with the same seriousness as other public health issues, like alcohol abuse.”

Wild adds: “The regulator always seems to be playing catch up, it’s really that lack of pace and lack of urgency, and lack of evidence base.” 

This is a public health issue, but hasn't been treated in the same way and with the same seriousness as other public health issues

PAC’s report found that the current funding model has resulted in the Commission being slow to respond to new issues and condemns the Commission’s “very significant gaps” in its intelligence and evidence gathering. This includes not having commissioned any of its own research into gambling harms and having no explanation for why 119 licensing authorities out of 380 in Great Britain had not conducted any inspections in 2018-19, including almost all licensing authorities in Scotland. Around 60 authorities had not conducted any for the past three inspections years.

While Wild can identify why these inspections may not have taken place, he regards the Commission’s approach to the lack of inspections as “striking”. “The point was neither the Commission nor the Department could explain the reasons behind it, they seemed un-curious about trying to find out or trying to address it,” he says.

This “complacent” approach was mirrored in how the Commission attempts to influence the gambling industry, with the PAC report suggesting the use of an operator “league table” to proactively encourage good behaviours and customer care. The report also noted that “the Commission identified increased risks to consumers due to the Covid-19 lockdown, but did not pre-emptively place any restrictions on the industry to prevent harm from occurring.” PAC have asked the Commission to report back with a plan for more proactive behaviour within three months.

The Committee and Wild also expressed dismay at the lack of metrics used by the Commission. “One of the frustrating things from this report was it was very difficult to actually judge their effectiveness because they don’t have any detailed key performance indicators. They have some headline measures, but they don’t have any smart targets that other regulators have”, Wild says.

“The witnesses from the Department could only say, obviously they want to see a reduction in gambling hams. But when asked what number of the 395,000 problem gamblers they wanted to see reduced by, they didn’t have an answer. It’s a slowness, it’s a lack of focus on the issues and on getting stuff done,” he adds.

One area that is outside of the Commission’s control but the Committee wants addressed is the limited right of redress for consumers where gambling operators have failed to act in a socially responsible way; a “glaring” gap in the current legislation which Wild says is “letting down thousands of people.” While gambling codes of practice exist, these are not normally reflected in an operator’s terms and conditions, and there is currently no ombudsman which could help consumers, meaning legal action is the only recourse to recover money.

However, as Wild explains: “When you’ve lost significant amounts of money, the idea that you’ve got the funds to take on a well-funded gambling operator is for the birds.”

The Department for Culture, Media and Sport told the Committee it expects this to be considered in the planned review of the Gambling Act – the Committee has asked DCMS and the Commission to work together and present “a plan for more effective consumer protection and redress within six months.”

 

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