Can U.K. Regulators Be Trusted With Gambling Reform?

If the parliamentary rumor mill spins true, we may soon be doing more than simply dreaming of a white paper.

Three years after the Gambling Act review was first announced and two years on from the call for evidence, the government's proposals for market reform are understood to be close.

That we are approaching the beginning of the end (or the end of the beginning) of this drawn-out process ought to be a source of relief for jaded participants.

What is less positive is the suggestion that the Department for Digital, Culture, Media and Sport is charting a legislation-light course, with responsibility for implementation devolved in large part to the Gambling Commission—an organization that has come under repeated fire where competence and integrity are concerned.

The National Audit Office, parliament's Public Accounts Committee, and the House of Commons select committee for DCMS have all delivered withering assessments of the commission in recent years.

The all-party parliamentary groups for (respectively) gambling-related harm and betting and gaming have judged the regulator "not fit for purpose," and the Social Market Foundation has called for its dissolution.

Critics point to the collapse of the Football Index and the lack of oversight of the National Strategy to Reduce Gambling Harms (including the distribution of £40m without evaluation) as examples of the regulator's poor performance.

Withdrawn Without Explanation

In September, the commission suspended its guidance for remote customer interactions just 10 days before it was due to take effect, leaving licensees required to follow a set of non-existent guidelines.

The annual assurance statement (which the largest 40-or-so licensees were expected to complete by mid-December) was withdrawn without explanation.

Requests for regulatory clarity are typically rejected, leaving stakeholders of all hues frustrated with a culture of non-engagement.

In addition to concerns of effectiveness, the commission appears to have abandoned any pretense of moral neutrality on wagering, eschewing customer-centered market regulation in favor of a public health crusade to eliminate harmful behavior at all costs.

Part of the problem is that the commission has softened its definition of harm to the point of absurdity, stating that people are harmed if they choose to spend money on horses instead of going to the cinema or if they spend less time with people they care about as a result of going to bingo.

In a similar way, the commission has distorted the meaning of vulnerability, which the Gambling Act clearly intended to mean an exceptional state in adults (similar to the vulnerability of children).

Under the regulator's revisionism, however, young adults are considered vulnerable, but so are older adults.

Not Very Brave New World

One is vulnerable if one has "poor physical health" (NHS Digital estimates that 43% of adults have a long-standing medical condition); "poor mental health" (17% of adults have a common mental disorder); if one is bereaved (about 15% of us annually—National Bereavement Alliance); "has caring responsibilities" (13%—Carers UK); has "dyslexia" (10%—NHS); or if one has "a higher than standard level of trust or appetite for risk"—which one could argue applies to all but the most cautious punters.

The commission's not-very-brave new world appears to be peopled exclusively by the vulnerable and the victims with risk assigned a uniformly negative aspect.

Documents obtained under the Freedom of Information Act reveal that the regulator arrived (belatedly but correctly) at the view that "reliable data does not exist" to support Public Health England's claims on the social and economic costs of gambling harms.

Rather than notify the government of its concerns, it chose concealment, even after the Department of Health and Social Care admitted PHE had made "mistakes" and committed to a review scheduled for publication by the end of last month.

The commission knew that PHE had taken a prohibitionist stance on betting (it advocated "a similar approach to how we tackled tobacco consumption") but continued to support its work.

Perhaps most concerning of all is the disclosure —once again forced through the Freedom of Information Act—that the regulator is automatically biased against representations from its own licensees.

In reviewing the PHE report, it stated that "a full economic evaluation of the gambling industry could be slightly awkward politically as it would fund work to identify the benefits of gambling" before adding, "it's likely that we would be critical of any industry-funded effort to estimate the benefits of the gambling industry."

Last month, in a speech to betting chief executives, Andrew Rhodes of the commission appeared to recognize his organization had strayed from the straight and narrow.

In stating an aspiration to "be the trusted voice on gambling, as an impartial regulator" and "not to make a moral judgment on how much money is spent on gambling," there was perhaps an admission that those things had not always been true in the past.

As a statement of intent, the speech offered hope of a return to a more balanced approach. In the next few years, the commission will have a considerable influence on how betting customers are treated.

Much now rides on whether it perceives its role as a market regulator or moral guardian. As we brace ourselves for a fresh raft of consultations on betting reform, the question of who regulates the regulator has rarely been so important.