Policy paper

Review of the Gambling Act 2005 Terms of Reference and Call for Evidence

Published 8 December 2020

Picture of Nigel Huddleston MP.

Ministerial Foreword

The Gambling Act 2005 is the basis for virtually all regulation of gambling in Great Britain. Last year we committed to review it to make sure it is fit for the digital age. As with the rest of the economy, gambling has changed enormously in the last 15 years, with smartphones giving opportunities to gamble online almost anywhere and at any time, fast-paced innovation in product design and advertising, and new opportunities to harness technology for the protection of players. The Gambling Commission has broad powers to set and enforce licence conditions, but in recent years a number of high profile enforcement cases have raised concern that too many people are still experiencing significant harm. We want to look at whether our regulatory framework is effective and whether further protections are needed.

This Review is about using the evidence to assess whether we have the balance of regulation right. Gambling is a fun leisure activity for many people, with nearly half of adults gambling each month. We respect the freedom of adults to choose how they spend their money and the value of a responsible industry which protects players, provides jobs and pays taxes. But it is essential that we prevent exploitation of vulnerable people and protect individuals, families and communities from the potentially life ruining effects of gambling-related harm. We need to ensure our regulatory and legislative systems continue to deliver on the original aims of the 2005 Act, which remain the government’s priorities: the protection of children and vulnerable people in a fair and open gambling economy which is also crime free.

I am pleased that the government has worked with the Gambling Commission and others to deliver significant progress in support of these objectives over recent years. Our 2016 Review of Gaming Machines and Social Responsibility Measures led to us legislating to cut the maximum stake on Fixed Odds Betting Terminals to £2, and in the last 18 months the Gambling Commission has tightened the rules on the age and identity checks operators must do before allowing someone to gamble online. We’ve also banned gambling on credit cards and made it mandatory for online operators to be signed up to GAMSTOP (the national online self-exclusion scheme).

The Review of the Act is an opportunity to step back and take a wider look across the issues, but improvements can and will continue to be made separately to the Review as well. The Gambling Commission is currently consulting on tighter requirements for operators to protect customers, including on interventions and affordability checks, and DCMS is already considering proposals from the Gambling Commission for a fees uplift to reflect the increasingly complex nature of the industry it regulates. This builds on the new restrictions on VIP schemes which came into force at the end of October, and new protections for online slots game design which will be announced soon. The government also recognises the essential public health elements to any discussion of gambling, and separately to this Review the Department for Health and Social Care will continue work to expand and improve the treatment of gambling-related harms alongside other addictions like drugs and alcohol.

Finally, I am grateful to the Parliamentary and other groups who have made valuable contributions to the debates around gambling over recent months and years. This call for evidence is an opportunity to draw together the evidence on gambling in Great Britain with insights from other jurisdictions to inform the best possible policy outcomes. I look forward to hearing from you on the evidence and how we can achieve our objectives.

Nigel Huddleston

Minister for Sport, Tourism and Heritage

Introduction

1. The Gambling Act 2005 sets out how gambling in Great Britain is regulated. It came fully into force in September 2007, and covers arcades, betting, bingo, casinos, gaming machines, society lotteries, and remote gambling (including online gambling). It also created and set the functions and objectives of the Gambling Commission as the principal regulator. In 2014, it was amended to cover all online gambling companies who offer gambling to customers in Great Britain, wherever they are based. Gambling is reserved across Great Britain but devolved in Northern Ireland.

2. Gambling is a popular leisure pursuit in Britain. Last year, 47% of adults surveyed had taken part in at least one form of gambling in the previous four weeks (32% if we exclude those who played only the National Lottery). Gambling can be entertaining and sociable, and enhance enjoyment of other activities, and the vast majority of gamblers take part without suffering even low levels of harm. The industry also makes significant contributions to the economy, employing nearly 100,000 people, paying approximately £3bn per year to the government in taxes, and accounting for £8.7bn or 0.5% of UK Gross Value Added (GVA). It also contributes significantly to other industries, including sport, racing and advertising.

3. However, gambling does come with risks, and problem gambling can ruin lives, wreck families, and damage communities, with issues including mental health and relationship problems, debts that cannot be repaid, crime, or even suicide in extreme cases. According to the latest data collected across Great Britain, approximately 0.5% of the adult population are problem gamblers, defined as meeting particular thresholds of harm in a problem gambling screen. This rate has remained broadly steady around or below 1% for the past 20 years and now equates to about 300,000 individuals whose gambling is also likely to cause harm to those around them. Additionally, 1.4 million adults are low risk gamblers, who are not likely to be experiencing harm but have engaged at least sometimes in a behaviour like chasing losses. A further 440,000 adults are moderate risk gamblers.[footnote 1] There are also approximately 55,000 children problem gamblers.

4. We know that gambling harm is often a result of the interplay between individual susceptibility, environmental factors, the products themselves and operator actions. This Review seeks to ensure that people can continue to gamble but that the legislation and regulation we have in place addresses as many factors as possible to give the necessary safeguards to protect children, vulnerable people, and all gamblers in the digital age.

Changes since 2005

5. The Gambling Act 2005 brought in a licensing requirement for online operators based in Great Britain. There have been significant changes in the gambling market and how consumers gamble since the Act came into force in 2007, and even since the Act was amended in 2014 to bring offshore operators into its scope. The gross gambling yield (GGY - amount staked minus winnings paid out) for online gambling in Great Britain grew 18% in real terms between 2015/16 and 2018/19. Much of this growth was channel shift from land based gambling (the market overall grew just 4% in that period) and in September 2019 the GGY generated by remote gambling overtook that of land based gambling for the first time (excluding lotteries).[footnote 2]

6. This steady industry growth and shift to online have seen neither a marked increase in overall gambling participation, which has remained broadly stable between 45 and 48% of adults for the past five years, nor an increase in population problem gambling rates. [footnote 3]

7. Nonetheless, a stable problem gambling rate does not necessarily indicate a stable quantum of harm. Technological change has undoubtedly presented new risks, particularly in the form of more intensive products, accessible at any time of day without direct human interaction, accompanied by much more advertising, and involving increasingly rapid innovation. Technology has also given new opportunities to enhance player protections, which all those with an interest in safer gambling must capitalise on.

8. The land based sector and the economy around it have also changed significantly in the past two decades. The 2005 Act introduced new categories of casino licence with new entitlements and requirements. Seven of these casinos are now open and this Review will look at how the new rules have worked and what the next steps should be for regulation across the casino sector. More broadly, customers in all sectors have new expectations for ease of transaction, so in the increasingly cashless world we must consider whether the rules governing payment methods in the land based sector still serve a useful purpose in preventing harm and the degree to which they pose limits on innovation and customer choice.

9. Change has not been limited to commercial gambling. Lotteries, which predominantly exist to raise money for good causes, have also changed. Over the last 25 years, the National Lottery has seen significant growth, particularly in online play and instant-win games. Following a consultation, the government has announced that we will be increasing the minimum age for sale of National Lottery games to 18 from 2021, reflecting the latest public opinion and evidence on risk of harm. Society lotteries have grown too, with sales increasing from around £200 million in 2008/09 to £830 million in 2019/20.[footnote 4] Sales and prize limits for society lotteries are subject to caps which were increased in July 2020 to enable society lotteries to continue to grow, whilst ensuring the unique position of the National Lottery is maintained.

Government action

10. The government has been working hard with the Gambling Commission and others to strengthen protections around gambling, both offline and online. Since the beginning of 2019 we have legislated to cut the maximum stake on B2 gaming machines in betting shops from £100 to £2, tightened the rules on the age and identity checks operators must do before allowing someone to gamble online, banned gambling on credit cards, and made it mandatory for online operators to be signed up to GAMSTOP (the national online self-exclusion scheme).

11. In July last year, the government also secured a commitment from leading operators to increase tenfold their donations to gambling research, education and treatment, with £100 million earmarked for treatment over the next four years. We also announced the opening of up to 15 new specialist clinics in the NHS Long-Term Plan to expand the geographical coverage of NHS services for people who experience serious gambling problems. The first three of these are now open, as is the dedicated children and young person’s service operating out of the National Problem Gambling Clinic in London. DHSC is working with the NHS and GambleAware to ensure the best use of available funding, and to align and integrate the expansion of treatment services across the system so patients get the right treatment at the right time.

12. In addition, the gambling industry has taken voluntary action in response to public concern. In August 2019 they instituted a ban on televised betting advertising during live sport before the watershed, and in September this year they committed to ensuring that at least 20% of their TV adverts are to promote safer gambling. The Betting and Gaming Council, which represents approximately 90% of the non-lottery gambling industry, has committed to drive up safer gambling standards across its members.

13. Alongside this Review, the Gambling Commission is introducing further protections across a range of areas, including added safeguards for VIP schemes which came into force at the end of October. Consultations have been taken forward on new rules on game design for online slots, a permanent ban on operators providing a facility for customers to cancel pending withdrawals of winnings, and new requirements for interacting with players including affordability checks.

Terms of Reference

Aim

14. The government wants all those who choose to gamble in Great Britain to be able to do so in a safe way. The sector should have up to date legislation and protections, with a strong regulator with the powers and resources needed to oversee a responsible industry that offers customer choice, protects players, provides employment, and contributes to the economy.

Objectives of the Review

15. The government is reviewing the Gambling Act (2005) to ensure our regulatory framework can protect children and vulnerable people, prevent gambling related crime, and keep gambling fair and open in the digital age. Through this Review, the government’s objectives are to:

15.1. Examine whether changes are needed to the system of gambling regulation in Great Britain to reflect changes to the gambling landscape since 2005, particularly due to technological advances

15.2. Ensure there is an appropriate balance between consumer freedoms and choice on the one hand, and prevention of harm to vulnerable groups and wider communities on the other

15.3. Make sure customers are suitably protected whenever and wherever they are gambling, and that there is an equitable approach to the regulation of the online and the land based industries.

Scope

16. To deliver these objectives, the Review will be wide-ranging in scope. It will have particular regard to:

16.1. The protection of online gamblers, including rules to minimise the risks associated with online products themselves, and the use of technology to support harm prevention

16.2. The positive and negative impacts of the advertising and marketing of gambling products and brands

16.3. The effectiveness of our regulatory system, including the Gambling Commission's powers and resources to regulate and keep pace with the licensed market and tackle unlicensed operators, and funding flows from the industry to the regulator

16.4. The availability and suitability of redress arrangements for individual customers who feel they have been treated unfairly by gambling operators

16.5. Children’s access to Category D slot machines, the effectiveness of age controls, protections for young adults, and the age limit for society lotteries (currently available to 16 and 17 year olds)

16.6. The outcome of changes to the land based sector introduced in the Gambling Act 2005, particularly for casinos, and whether they are still appropriate in a digital age

17. In considering all of these issues, we will pay particular attention to children, young people, young adults, and others who may be particularly vulnerable to the risks posed by gambling. We have asked specific questions on these issues in various sections of the call for evidence.

18. The 2019 Manifesto committed to tackle issues around credit card misuse and loot boxes (features in video games which contain randomised items and can be purchased for real money). Credit cards were banned for all gambling except for lotteries in shops in April 2020, and in September we launched a bespoke call for evidence on loot boxes which will, as needed, support this wider Review of the Gambling Act.

Governance, outputs and timetable

19. The Review will be led by Ministers at the Department for Digital, Culture, Media & Sport, with engagement from across government, the Gambling Commission, the industry, health and charitable sector, those with lived experience of gambling harm, and other stakeholders.

20. After this initial 16 week call for evidence, the government will assess the evidence presented, alongside other data, with the aim of setting out conclusions and any proposals for reform in a white paper next year.

21. Wider work related to gambling will continue alongside this Review. The Gambling Commission will progress its ongoing work to make gambling safer through regulation. DHSC will continue to work collaboratively with NHSE and GambleAware to improve and expand availability and access to treatment for problem gambling. This will be supported by forthcoming increases in funding and evidence reviews by the National Institute for Health Research and Public Health England (PHE). PHE’s existing health protection role will be transferred to the new National Institute for Health Protection in 2021 and work on health improvement will continue with support from existing PHE expertise.

Call for evidence

Online protections - players and products

22. In 2019, 21% of adults surveyed had gambled online in the previous four weeks. This was most commonly done at home (95% of all online gamblers), and by using a mobile phone (76% of 18-24 year olds, 72% of 25-34 year olds, and 66% of 35-44 year olds who gambled online). The remote casino, bingo and betting sector in Great Britain employs around 10,000 people, many of whom are in highly skilled jobs, and a remote gaming duty of 21% is taxed on all profits from GB customers no matter where in the world the company offering the gambling facilities is based.

23. The current regulatory framework for both online and land based gambling puts player protection obligations on gambling companies as conditions of their operating licences, with breaches subject to compliance and enforcement action by the Gambling Commission. Most forms of land based gambling are not subject to statutory limits on the amount people can gamble at one time or in one session, the only exception being gaming machines where stake and prize limits are set out in regulations. There are no statutory limits for any form of online gambling.

24. The expectation is that operators in both settings must monitor a player’s behaviour and intervene when they see signs of risk of harm. In land based premises like betting shops or casinos, this can be difficult because players can be anonymous and interventions may then depend on what the staff in the premises observe in any one session. It can also be hard to identify individuals who have previously asked to be excluded from local premises, unless they are already well known to the staff.

25. As all online gambling is account based, operators can track a customer’s patterns of play over time, and use the individual’s data in real time to assess their risk of harm and intervene accordingly, normally facilitated by harm detection algorithms.[footnote 5] Online operators must also make it easy for players to set limits on their own play, and prevent them from gambling at all if they have self-excluded. The Gambling Commission has recently called for evidence on how affordability checks at certain predetermined thresholds might add to the protections for online gamblers.

26. This approach allows tailored protections based on each individual’s circumstances, behaviour and choices. These may be less effective if the individual, as is common, has accounts with several operators, but the Gambling Commission is progressing work on how this information can be shared between operators for the purposes of harm prevention.

27. However, concerns have been raised that the current system of tailored online protections is not sufficiently effective at preventing gambling harm. There have been too many examples of gamblers being able to spend very large sums of money which they could not afford in short spaces of time without effective operator intervention, leading to devastating effects for individuals and their families.

28. Concerns have also been raised about the nature of online gambling products themselves. Online gamblers can access a wide variety of products, from National Lottery games, to sports betting, bingo, casino games and slots. While no gambling product is risk free, certain products are associated with higher problem gambling rates, just as with land based gambling. For instance, online gambling on slots, casinos or bingo games is associated with a higher rate (9.2%) than online betting with a bookmaker (2.5%).[footnote 6] Licensees are already required to design their products responsibly and they must comply with the Gambling Commission’s Remote Technical Standards.

29. We are seeking evidence on these current online protections, and whether changes are needed at the product and/ or account level to improve player safeguards.

30. We are also seeking evidence on so called ‘white label’ agreements, where a company which does not itself hold a licence from the Gambling Commission provides the brand for a gambling website which is operated by an existing licensee. The Commission has made clear, including through enforcement action, that licensees will be held to account for the activities of their white label partners. However, concerns have been raised that the companies who provide the brands may be seeking to use white label arrangements as they would be unable to meet the GB regulatory standards required to obtain a licence themselves, and that this therefore poses risks to consumers. There are currently over 700 white label partners in the industry.

31. The government is also conscious that the online gambling market is fast evolving and the legislative framework must give sufficient flexibility and futureproofing to respond to emerging risks. Some commentators have called for loot boxes to be classified as gambling. The government is gathering specific evidence before making a decision, and has recently completed a loot box call for evidence which will as needed support this wider Review of the Gambling Act.

Questions

Q1: What evidence is there on the effectiveness of the existing online protections in preventing gambling harm?

Q2: What evidence is there for or against the imposition of greater controls on online product design? This includes (but is not limited to) stake, speed, and prize limits or pre-release testing.

Q3: What evidence is there for or against the imposition of greater controls on online gambling accounts, including but not limited to deposit, loss, and spend limits?

Q4: What is the evidence on whether any such limits should be on a universal basis or targeted at individuals based on affordability or other considerations?

Q5: Is there evidence on how the consumer data collected by operators could be better deployed and used to support the government’s objectives?

Q6: How are online gambling losses split across the player cohort? For instance what percentage of GGY do the top and bottom 10% of spenders account for, and how does this vary by product?

Q7: What evidence is there from behavioural science or other fields that the protections which operators must already offer, such as player-set spend limits, could be made more effective in preventing harm?

Q8: Is there evidence that so called ‘white label’ arrangements pose a particular risk to consumers in Great Britain?

Q9: What evidence, if any, is there to suggest that new and emerging technologies, delivery and payment methods such as blockchain and crypto currencies could pose a particular risk to gambling consumers?

Q10: Is there any additional evidence in this area the government should consider?

Advertising, sponsorship and branding

32. The Gambling Act 2005 removed longstanding broadcasting advertising restrictions, allowing for the advertising of all gambling products subject to new controls, whereas previously only bingo and lottery adverts had been permitted on TV and radio. Allowing all gambling companies to advertise all forms of gambling in any media like any other product (albeit with the specific controls) was one of the most visible changes brought about by the Act, and in 2019, 87% of adults and 69% of young people had seen or heard gambling advertisements and/or sponsorships.

33. In May this year, the Advertising Standards Authority (ASA) reported that TV gambling advertising exposure has remained at similar levels over the last six years, averaging 13.8 ads per week for adults and 3 ads per week for children (with children seeing, on average, 2.5 gambling ads on TV per week in 2019, mainly for lotteries and bingo).[footnote 7] However, as with other sectors, there has been a shift in focus to advertising online and via social media. Analysis commissioned by GambleAware estimated that in 2017, the gambling industry spent £1.5bn on advertising and marketing, around 80% of which was through online channels.[footnote 8] The government recognises that this represents a significant revenue stream for broadcasters and advertisers, and we invite evidence on this alongside evidence on harms caused by advertising.

34. The UK Advertising Codes make clear that all gambling advertising must be socially responsible, it must not be targeted at under 18s, and its content must not encourage irresponsible gambling behaviour. Gambling adverts are not permitted to be shown in or around children’s programmes, or programmes of particular appeal to children. The ASA is responsible for enforcing rules on the content and placement of gambling advertising which are part of the UK Advertising Code. Compliance with these codes is also a licence condition so breaches can result in enforcement action by the Gambling Commission.

35. In response to a major piece of research commissioned by GambleAware,[footnote 9] the Committee of Advertising Practice is now consulting on the content restrictions in the codes to ensure they reflect the latest evidence and provide appropriate protections for under 18s and vulnerable adults. This process is separate to the Gambling Act Review and will progress simultaneously.

36. The licence conditions also set additional controls on gambling advertising. These include provisions requiring that all inducements to gamble (such as free bets and bonuses) must be compliant with consumer law, that all reasonable steps must be taken to prevent direct marketing to self-excluded customers, that adverts must not be placed on piracy websites, and that operators are responsible for their marketing affiliates.

37. In addition to the regulators’ requirements, the Gambling Industry Code for Socially Responsible Advertising includes rules such as the 9pm watershed on most television advertising and the ‘Whistle to Whistle’ advertising ban around live sports. This code has been updated recently in response to the Gambling Commission’s industry challenge on advertising technology, with new requirements from the start of October 2020 to as far as possible target online adverts away from vulnerable customers. While agreed voluntarily, these rules are effectively enshrined in the licence conditions for operators through their inclusion in the Gambling Commission’s ordinary code provisions. An operator’s failure to abide by these rules can be used as evidence in compliance or enforcement activity by the Commission.

38. A significant channel for gambling brand marketing is sponsorship of sports teams and events, including shirt sponsorship and similar deals with sports bodies. Commercial arrangements with gambling operators are a significant source of income for British sports and teams, particularly horse racing and football teams. While the government has always been clear that sporting bodies must consider their responsibility to the welfare of fans and supporters when agreeing such deals, we have equally recognised their right to benefit from commercial deals. However, with growing public concern about the relationship between sport and gambling, we are seeking evidence on the positive and negative outcomes of this relationship to make sure we can strike an appropriate balance in developing policy.

39. Separately to this Review, the government is assessing the broader regulatory system for online advertising through the Online Advertising Programme. The work will look at the underlying market features that can bring about exposure to harmful or inappropriate advertising, as well as looking at the standards to which advertisers and disseminators of advertising content are held. The government will continue to work with regulators and relevant market participants in this area to ensure coherence of approach across the system.

Questions

Q11: What are the benefits or harms caused by allowing licensed gambling operators to advertise?

Q12: What, if any, is the evidence on the effectiveness of mandatory safer gambling messages in adverts in preventing harm?

Q13: What evidence is there on the harms or benefits of licensed operators being able to make promotional offers, such as free spins, bonuses and hospitality, either within or separately to VIP schemes?

Q14: What is the positive or negative impact of gambling sponsorship arrangements across sports, esports and other areas?

Q15: Is there any additional evidence in this area the government should consider, including in relation to particularly vulnerable groups?

The Gambling Commission’s powers and resources

40. The Gambling Commission is funded through licence fees paid by the industry. In 2019-20 it had an income of £19.9 million (£17.07 million in 2014-15). Staffing levels have increased from 269 in 2014-15, and the Commission currently employs 340 staff (including those who work on the National Lottery). The Commission is in the process of restructuring to focus regulatory resources on the larger and more complex online gambling industry.

41. The Gambling Act gave the Gambling Commission broad powers to enable it to tackle new and emerging risks through licence conditions on operators without the government having to take legislation through Parliament. The Commission has used these powers to implement changes such as the ban on credit card gambling, and new rules around age and identity verification before allowing someone to gamble online. However, it is important to keep the legislation under review to ensure that the Commission and our regulatory framework can continue to respond effectively to the risk of gambling-related harm. This includes understanding the scale of issues, such as the online black market and operator malpractice, and whether the Commission has sufficient powers under the current framework to address them.

42. Ensuring the Gambling Commission is able to regulate effectively and minimise harm is a priority for both the Review and separate ongoing work. The government is continuing to work with the Gambling Commission to respond to the recommendations made by the National Audit Office and subsequently by the Public Accounts Committee (PAC). Work is already underway to address many of the points they raised, including improving evaluation of regulatory outcomes, capitalising on available data and intelligence, and monitoring the impact of Covid-19 on gambling. We are also calling for evidence on online protections, the minimum age for playing society lotteries, and consumer redress as part of this Review. The government responded formally to the PAC on its recommendations in September.

43. The Gambling Commission needs to be suitably resourced to allow it to be a strong regulator which is able to react quickly to the fast paced gambling industry. At present, the Gambling Commission’s fees are set and adjusted by a statutory instrument going through Parliament, whereas some other regulators have greater autonomy in determining the level of funding required themselves, giving them greater flexibility.

44. The NAO and recent Parliamentary reports have recommended that the government should review the Commission’s current fees system to ensure that it has the funding and flexibility it needs to regulate the industry proactively and effectively. We are already considering proposals from the Gambling Commission for an uplift in fees under the current provisions in the 2005 Gambling Act, and as part of this Review we will look more widely at the framework for funding flows from the sector.

45. Separately from licence fees paid to the Gambling Commission, gambling duties are collected by HMRC and payable to the exchequer. These amounted to around £3 billion in 2019-20. The government also has a power in the current legislation to place a levy on operators payable to the Gambling Commission, which it could use to fund projects related to gambling related harm or its wider regulatory work. The government has always been clear that should the industry’s voluntary system for supporting projects and services related to problem gambling fail to deliver the level of funding necessary, it would look at the case for alternative funding mechanisms and all options would be considered, including a levy.

46. As outlined in paragraph 11, in July last year industry committed to provide £100 million on treatment for problem gambling over four years. It has since been announced that GambleAware, the independent charity which commissions the National Gambling Helpline and a wide network of gambling-specific treatment services, will use this money to expand existing third sector treatment services. These will complement NHS services which are also being scaled up as part of the NHS Long-Term Plan, with three new clinics already open and accepting patients. DHSC is working with NHS England and GambleAware to improve the effective use of available funding and resources for the provision of treatment for problem gambling.

Questions

Q16: What, if any, evidence is there to suggest that there is currently a significant black market for gambling in Great Britain, or that there is a risk of one emerging?

Q17: What evidence, if any, is there on the ease with which consumers can access black market gambling websites in Great Britain?

Q18: How easy is it for consumers to tell that they are using an unlicensed illegal operator?

Q19: Is there evidence on whether the Gambling Commission has sufficient investigation, enforcement and sanctioning powers to effect change in operator behaviour and raise standards?

Q20: If existing powers are considered to be sufficient, is there scope for them to be used differently or more effectively?

Q21: What evidence is there on the potential benefits of changing the fee system to give the Gambling Commission more flexibility to adjust its fees, or potentially create financial incentives to compliance for operators?

Q22: What are the barriers to high quality research to inform regulation or policy making, and how can these be overcome? What evidence is there that a different model to the current system might improve outcomes?

Q23: Is there evidence from other jurisdictions or regulators on the most effective system for recouping the regulatory and societal costs of gambling from operators, for instance through taxes, licence fees or statutory levies?

Q24: Is there any additional evidence in this area the government should consider?

Consumer redress

47. The current regulatory framework provides protections for individuals in setting clear rules which operators must follow. Where operators breach these rules, they are subject to compliance and enforcement action by the Gambling Commission, including regulatory settlements and fines or licence suspension and revocation where necessary. However, concerns have been raised in recent Parliamentary and other reports that this does not normally provide any compensation or redress to the individual customer harmed by the operator’s failings.

48. Where these failings are contractual in nature (predominantly because they relate to an operator’s terms and conditions), there is an individual redress system in place. Licensed operators must nominate an approved provider of alternative dispute resolution services to rule on issues where the complainant is not happy with the operator’s response. These services are provided free of charge to customers, and their rulings are binding on operators in cases with a value not exceeding £10,000.

49. Alternative dispute resolution providers are not generally able to accept and rule on cases that relate to an operator’s failings against the social responsibility code or licence conditions set by the Gambling Commission. The Independent Betting Adjudication Service, the alternative dispute resolution provider that deals with the largest number of disputes involving gambling operators, had 5,235 disputes referred to it in the year to September 2019, and refused to accept 684 (13%) of those cases on the grounds that it considered them matters of regulation.

50. The Gambling Commission does not investigate and adjudicate individual disputes by issuing a binding decision on the licensee. Around a quarter of the complaints the Commission’s contact centre receives relate to alleged social responsibility failings by operators, and while these are useful intelligence and can trigger investigations, the regulator cannot force any kind of redress for the individuals involved. However, in cases which end in a regulatory settlement agreed with the Gambling Commission, operators typically agree to divest money so they do not benefit from their breaches, and this money is often paid to identified victims such as victims of crime where stolen money has been used to fund gambling.

51. As has been highlighted in recent reports, this means that the primary route for individuals to seek redress for social responsibility failings on the part of operators is through the courts, which can be costly and time consuming. While redress through the courts is a common mechanism across the economy, some other sectors have particular vehicles to facilitate easier consumer redress, such as an ombudsman. We are seeking evidence on the case for changes to the consumer redress arrangements, and the benefits and disadvantages of any alternatives to the current approach.

Questions

Q25: Is there evidence of a need to change redress arrangements in the gambling sector?

Q26: If so, are there redress arrangements in other sectors or internationally which could provide a suitable model for the gambling sector?

Q27: Individual redress is often equated with financial compensation for gambling losses. However, there may be risks associated with providing financial lump sums to problem and recovering gamblers, or risks of creating a sense that gambling can be ‘risk free’. Are there other such considerations the government should weigh in considering possible changes to redress arrangements?

Q28: Is there any additional evidence in this area the government should consider?

Age limits and verification

52. Children’s participation in gambling has been falling over time. The Gambling Commission’s 2019 research found that 11% of 11-16 year olds surveyed had spent some of their own money on gambling activities in the last seven days, down from 23% in 2011. This was predominantly on forms of gambling which are legal for them to participate in, such as a private bet for money (mentioned by 5%) and fruit/ slot machines (4%).

53. Conversely, problem gambling rates among 11-16 year olds have remained comparatively stable, with 1.7% (equating to around 55,000 individuals) classified as problem gamblers in 2019.[footnote 7] This is towards the lower end of the range of rates of adolescent problem gambling seen across other countries. A 2016 review of recent research found European adolescent problem gambling prevalence ranged from 0.2% to 12.3%.[footnote 8]

54. The government is working hard with the Gambling Commission and others to prevent illegal underage gambling. For instance, in 2019 we tightened rules and requirements around age verification before someone can deposit and gamble online, ensured that we have a strong test purchasing regime for land based venues, and have specifically called on pubs to do more to make sure that children cannot access age-restricted slot machines on their premises (‘Category C’ machines). We would welcome evidence on the impact and effectiveness of these measures.

55. The age of 18 is widely recognised as the age at which one becomes an adult. At 18, people gain full citizenship rights and responsibilities, and are trusted to participate in activities which carry risks of harm, such as drinking alcohol and smoking tobacco. As we recently announced, we will be increasing the minimum age for sale of National Lottery games to 18 in 2021. This reflects the changes to the games portfolio we have seen since its launch in 1994, and emerging evidence of risk to young people from playing National Lottery games.

56. Given this planned change, the government now intends to review the minimum age for society lottery play. Under the Gambling Act, society lotteries are only permitted for the benefit of non-commercial organisations such as charities, or sport, athletics or culture clubs. They raise money for specific good causes and are limited in size in order to ensure they remain distinct from the National Lottery.

57. The overall society lotteries sector is small in comparison with the National Lottery. It has annual sales of around £830 million (compared to approximately £7.9 billion for the National Lottery in 2019/20), generating returns to good causes of £367 million (compared to £1.8 billion for the National Lottery in 2019/20). The sector has a low risk of harm (being associated with a problem gambling rate of 1.5% for those that play, compared to 1.0% for National Lottery draw-based games and 1.8% for scratchcards). We believe the number of 16 and 17 year olds playing society lotteries is very low.

58. We would welcome evidence to support us in considering the minimum age for society lotteries. Society lottery sales and prize limits are not in scope of this Review, as legislation to increase these limits was introduced in July 2020 following an extensive consultation. We will be reviewing the impact of these reforms and the case for further changes in August 2021.

59. Under 18s are also currently legally permitted to play category D gaming machines, such as coin pushers, crane grabs, and slot machines with a maximum stake of 10p per spin. These products are typically found in arcades at seaside locations, and 4% of children surveyed in 2019 reported having played on a fruit or slot machine in the previous week. [footnote 9]

60. On 12th November, BACTA (the trade body for the arcade sector) announced that its members’ code would be amended to stop under 18’s playing on Category D cash payout fruit machines. This was a welcome move in response to public concern. The government is now seeking evidence on the advantages and disadvantages of any type of slot machine style gaming machines being legally accessible to children.

61. There have also been calls for increased protection for those who are no longer children but have only recently reached an age when they are legally able to gamble. Problem gambling rates among 16-24 year olds are lower than among those aged 25-34, but there have been instances of individual young adults suffering substantial gambling harm at a time of significant change in their life, for instance moving away from home or managing money for the first time (perhaps including a student loan). We are pleased that the industry has recently introduced new protections for those who are under 25 years old, including age gating of adverts and in most circumstances exclusion from VIP schemes. While demographics are already recognised as a risk factor in the Gambling Commission’s formal guidance on customer interaction, we are seeking evidence on whether any further specific protections are needed for those adults who are legally allowed to gamble but may still be particularly vulnerable to harm because of their age, for instance under 25s.

Questions

Q29: What evidence is there on the effectiveness of current measures to prevent illegal underage gambling in land based venues and online?

Q30: Is there evidence of best practice, for instance from other jurisdictions, in how to prevent illegal underage gambling?

Q31: What, if any, evidence is there on the number of 16 and 17 year olds participating in society lotteries?

Q32: What, if any, evidence is there to show an association between legal youth engagement in society lotteries and problem gambling (as children or adults)?

Q33: Is there comparative evidence to support society lotteries and the National Lottery having different minimum ages to play?

Q34: What are the advantages and disadvantages of category D slot machine style gaming machines being legally accessible to children?

Q35: Is there evidence on how the characteristics of category D slot machine style gaming machines (for instance whether they pay out in cash or tickets) factor into their association with harm in childhood or later life?

Q36: What, if any, is the evidence that extra protections are needed for the youngest adults (for instance those aged between 18 and 25)?

Q37: What evidence is there on the type of protections which might be most effective for this age group?

Q38: Is there any additional evidence in this area the government should consider?

Land based gambling

62. The Gambling Commission is responsible for licensing and regulating operators of casinos, betting shops, bingo and arcades, as well as key individuals within the businesses, with local authorities responsible for issuing and ensuring compliance with premises licences. The Act also permits qualifying alcohol-licensed premises to offer two Category C or D gaming machines, or more on application to the authority which issues their alcohol licence.

63. It is important for the government that people are protected wherever they gamble and that there is a strong gambling industry which supports jobs and individual choice, and an equitable approach to regulation across different types of operators. In 2019, the Gambling Commission found that land based gambling premises accounted for over 80% of the total workforce and contributed just under half of gross gambling yield for the industry in Great Britain (excluding lotteries). Land based gambling (for example casinos and seaside arcades) can also support other industries such as tourism. The sector is, however, continuing to contract in comparison with online gambling. From March 2016 to March 2020, the number of gambling premises operated by Gambling Commission licensees fell by 13%.

64. The sector has been significantly impacted by the Covid-19 pandemic and the resultant periods of premises closure. Like other businesses, it was able to access the government’s initial £300 billion package of support measures, as well as the support announced more recently for businesses closed due to the tiering system and the second national lockdown. Support has included a business rates holiday, the Coronavirus Job Retention Scheme and the Coronavirus Business Interruption Loan Scheme. We have also worked closely with industry representatives in developing guidance to ensure that the sector could reopen in a Covid secure way. As restrictions due to coronavirus continue to bite, we do not yet have a full understanding of the scale or longevity of the financial impact. We expect the rate of venue closures to increase and total GGY for the financial year 2020/21 to decrease significantly.

65. The Review will consider whether the current rules governing land based gambling are still relevant in the digital age. For example, the land based gambling industry is one of the few industries restricted from using cashless payments. We are seeking evidence on whether having such restrictions in legislation helps prevent harm, and the degree to which it limits customer choice and therefore the land based sector’s ability to compete with online. Similarly, we will consider evidence on the existing and developing protections to de-anonymise play in land based venues, including the impact that might have on the effectiveness of self-exclusion schemes. We are particularly keen to receive evidence of customer demand to make or not make changes.

66. We will also consider the legislative landscape for casinos, in particular the distinction between the new style casinos allowed by the 2005 Act and the majority of casinos whose licences align with provisions originating in the Gambling Act 1968. It was not possible to properly review the operation of the new types of casino in 2014 as previously intended, because at that stage only two Large and no Small casinos had opened, out of a potential sixteen licences on offer. However, four Large and three Small casinos are now open.

67. Finally, we are seeking evidence on whether local authorities and other licensing authorities have the powers they need in respect of gambling premises to effectively fulfil their role. The Commission works in partnership with licensing authorities to regulate gambling. In doing so, the Commission will tend to focus on operators and issues of national or regional significance, and licensing authorities will take the lead on regulating gambling locally, including making decisions on applications for a premises licence. The Commission and licensing authorities may work directly together on particular issues, for example where it may establish a precedent or help build capacity and learning to be rolled out more widely. Licensing authorities are required to develop, consult on, and publish a statement of licensing policy every three years with regards to the principles they propose to apply in exercising their functions under 2005 Act.

Questions

Q39: What, if any, changes in the rules on land based gambling would support the government’s objectives as set out in the document? Please provide evidence to support this position, for instance how changes have worked in other countries.

Q40: What evidence is there on potential benefits or harms of permitting cashless payment for land based gambling?

Q41: Is there evidence that changes to machine allocations and/ or machine to table ratios in casinos to allow them to have more machines would support the government’s objectives?

Q42: What is the evidence that the new types of casino created by the 2005 Act meet (or could meet) their objectives for the sector; supporting economic regeneration, tourism and growth while reducing risks of harm?

Q43: Is there evidence on whether licensing and local authorities have enough powers to fulfil their responsibilities in respect of premises licenses?

Q44: Is there evidence that we should moderately increase the threshold at which local authorities need to individually authorise the number of category D and C gaming machines in alcohol licensed premises?

Q45: Is there any additional evidence in this area the government should consider?

How to respond

68. Please send responses to gamblingactreview@dcms.gov.uk in a document format like PDF or Microsoft Word. This Call for Evidence will close at midnight on Wednesday 31st March 2021.

69. We welcome evidence from all parties with an interest in the way that gambling is regulated in Great Britain. We also welcome international evidence.

70. Where possible, please provide specific evidence or data to support your responses.

71. In your response, please clarify:

71.1. Whether you are responding on behalf of an organisation or in a personal capacity.

71.2. What questions/ topics you are responding to. Respondents are encouraged to answer only to those questions where they have particular experience, expertise or evidence, and there is no need to respond to all questions.

71.3. Whether you want your response to remain confidential for commercial or other reasons, and whether you are willing to be contacted (if so please provide contact details).

72. To support this public call for evidence, we will be having specific conversations with some stakeholders where they hold pertinent evidence.

73. Where necessary, we may also share the evidence you submit with the Gambling Commission

74. Please contact the email address above if you require any other format or language to enable your response.

Call for evidence question recap

Online protections - players and products

Q1: What evidence is there on the effectiveness of the existing online protections in preventing gambling harm?

Q2: What evidence is there for or against the imposition of greater controls on online product design? This includes (but is not limited to) stake, speed, and prize limits or pre-release testing.

Q3: What evidence is there for or against the imposition of greater controls on online gambling accounts, including but not limited to deposit, loss, and spend limits?

Q4: What is the evidence on whether any such limits should be on a universal basis or targeted at individuals based on affordability or other considerations?

Q5: Is there evidence on how the consumer data collected by operators could be better deployed and used to support the government’s objectives?

Q6: How are online gambling losses split across the player cohort? For instance what percentage of GGY do the top and bottom 10% of spenders account for, and how does this vary by product?

Q7: What evidence is there from behavioural science or other fields that the protections which operators must already offer, such as player-set spend limits, could be made more effective in preventing harm?

Q8: Is there evidence that so called ‘white label’ arrangements pose a particular risk to consumers in Great Britain?

Q9: What evidence, if any, is there to suggest that new and emerging technologies, delivery and payment methods such as blockchain and crypto currencies could pose a particular risk to gambling consumers?

Q10: Is there any additional evidence in this area the government should consider?

Advertising, sponsorship and branding

Q11: What are the benefits or harms caused by allowing licensed gambling operators to advertise?

Q12: What, if any, is the evidence on the effectiveness of mandatory safer gambling messages in adverts in preventing harm?

Q13: What evidence is there on the harms or benefits of licensed operators being able to make promotional offers, such as free spins, bonuses and hospitality, either within or separately to VIP schemes?

Q14: What is the positive or negative impact of gambling sponsorship arrangements across sports, esports and other areas?

Q15: Is there any additional evidence in this area the government should consider, including in relation to particularly vulnerable groups?

Gambling Commission’s powers and resources

Q16: What, if any, evidence is there to suggest that there is currently a significant black market for gambling in Great Britain, or that there is a risk of one emerging?

Q17: What evidence, if any, is there on the ease with which consumers can access black market gambling websites in Great Britain?

Q18: How easy is it for consumers to tell that they are using an unlicensed illegal operator?

Q19: Is there evidence on whether the Gambling Commission has sufficient investigation, enforcement and sanctioning powers to effect change in operator behaviour and raise standards?

Q20: If existing powers are considered to be sufficient, is there scope for them to be used differently or more effectively?

Q21: What evidence is there on the potential benefits of changing the fee system to give the Gambling Commission more flexibility to adjust its fees, or potentially create financial incentives to compliance for operators?

Q22: What are the barriers to high quality research to inform regulation or policy making, and how can these be overcome? What evidence is there that a different model to the current system might improve outcomes?

Q23: Is there evidence from other jurisdictions or regulators on the most effective system for recouping the regulatory and societal costs of gambling from operators, for instance through taxes, licence fees or statutory levies?

Q24: Is there any additional evidence in this area the government should consider?

Consumer Redress

Q25: Is there evidence of a need to change redress arrangements in the gambling sector?

Q26: If so, are there redress arrangements in other sectors or internationally which could provide a suitable model for the gambling sector?

Q27: Individual redress is often equated with financial compensation for gambling losses. However, there may be risks associated with providing financial lump sums to problem and recovering gamblers, or risks of creating a sense that gambling can be ‘risk free’. Are there other such considerations the government should weigh in considering possible changes to redress arrangements?

Q28: Is there any additional evidence in this area the government should consider?

Age limits and verification

Q29: What evidence is there on the effectiveness of current measures to prevent illegal underage gambling in land based venues and online?

Q30: Is there evidence of best practice, for instance from other jurisdictions, in how to prevent illegal underage gambling?

Q31: What, if any, evidence is there on the number of 16 and 17 year olds participating in society lotteries?

Q32: What, if any, evidence is there to show an association between legal youth engagement in society lotteries and problem gambling (as children or adults)?

Q33: Is there comparative evidence to support society lotteries and the National Lottery having different minimum ages to play?

Q34: What are the advantages and disadvantages of category D slot machine style gaming machines being legally accessible to children?

Q35: Is there evidence on how the characteristics of category D slot machine style gaming machines (for instance whether they pay out in cash or tickets) factor into their association with harm in childhood or later life?

Q36: What, if any, is the evidence that extra protections are needed for the youngest adults (for instance those aged between 18 and 25)?

Q37: What evidence is there on the type of protections which might be most effective for this age group?

Q38: Is there any additional evidence in this area the government should consider?

Land based gambling

Q39: What, if any, changes in the rules on land based gambling would support the government’s objectives as set out in the document? Please provide evidence to support this position, for instance how changes have worked in other countries.

Q40: What evidence is there on potential benefits or harms of permitting cashless payment for land based gambling?

Q41: Is there evidence that changes to machine allocations and/ or machine to table ratios in casinos to allow them to have more machines would support the government’s objectives?

Q42: What is the evidence that the new types of casino created by the 2005 Act meet (or could meet) their objectives for the sector; supporting economic regeneration, tourism and growth while reducing risks of harm?

Q43: Is there evidence on whether licensing and local authorities have enough powers to fulfil their responsibilities in respect of premises licenses?

Q44: Is there evidence that we should moderately increase the threshold at which local authorities need to individually authorise the number of category D and C gaming machines in alcohol licensed premises?

Q45: Is there any additional evidence in this area the government should consider?

Privacy Notice

The following is to explain your rights and give you the information you are entitled to under the Data Protection Act 2018 and the General Data Protection Regulation (“the Data Protection Legislation”). This notice only refers to your personal data (e.g. your name, email address, and anything that could be used to identify you personally) and not the content of your response.

1. The identity of the data controller and contact details of our Data Protection Officer

The Department for Digital, Culture, Media & Sport (“DCMS”) is the data controller. The Data Protection Officer can be contacted at dcmsdataprotection@dcms.gov.uk. You can find out more here

2. Why we are collecting your personal data

Your personal data is being collected as an essential part of the call for evidence process, so that we can contact you regarding your response. When we ask for your personal data, we promise to only ask what we need and to make sure you know why we need it. If it includes contact details, we will also tell you anything else that we may use it to contact you about and whether you can say no. If you do say yes to contacting you about other things, you can withdraw your consent at any time.

The Data Protection Legislation states that, as a government department, the department may process personal data as necessary for the effective performance of a task carried out in the public interest. i.e. a consultation or call for evidence.

When we collect or use your personal data under any other lawful basis, we will let you know which part of the law we are using.

We will not:

  • sell or rent your data to third parties
  • share your data with third parties for marketing purposes
  • use your data in analytics.

We will share your data if we are required to do so by law, for example by court order, or to prevent fraud or other crime.

4. With whom we will be sharing your personal data

Copies of responses may be published after the call for evidence closes, or referenced in the government’s response to the call for evidence. If we do so, we will ensure that neither you nor the organisation you represent are identifiable, and any responses used to illustrate findings will be anonymised. Where we do wish to link the evidence submitted to you by name in any response we publish, we will contact you beforehand.

If you want the information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence. In view of this, it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information, we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on the Department.

5. For how long we will keep your personal data, or criteria used to determine the retention period.

Your personal data will be held for three years after the call for evidence is closed. This is so that the department is able to contact you regarding the result of the call for evidence following analysis of the responses.

6. Your rights, e.g. access, rectification, erasure

The data we are collecting is your personal data, and you have considerable say over what happens to it. You have the right:

  • to see what data we have about you
  • to ask us to stop using your data, but keep it on record
  • to ask how we check the information we hold is accurate
  • to have all or some of your data deleted
  • to lodge a complaint with the independent Information Commissioner (ICO) if you think we are not handling your data fairly or in accordance with the law.

You can contact the ICO at https://ico.org.uk/, telephone 0303 123 1113 or:

ICO, Wycliffe House,
Water Lane,
Wilmslow,
Cheshire
SK9 5AF.

7. Your personal data will not usually be sent overseas. If we need to do so, we will let you know.

8. Your personal data will not usually be used for any automated decision making. If we need to do so, we will let you know.

9. Your personal data will be stored in a secure government IT system, and will be protected to make sure nobody has access to it who shouldn’t.

We are committed to doing all that we can to keep your data secure. We have set up systems and processes to prevent unauthorised access or disclosure of your data - for example, we protect your data using varying levels of encryption.

We also make sure that any third parties that we deal with keep all personal data they process on our behalf secure.

10. Changes to this policy

We may change this privacy policy. In that case, the ‘last updated’ date at the bottom of this page will also change. Any changes to this privacy policy will apply to you and your data immediately.

If these changes affect how your personal data is processed, DCMS will take reasonable steps to let you know.

  1. Gambling Commission: Health Survey for England 2018; Gambling Commission,2018 - Levels of problem gambling in Wales, Gambling Commission: Participation in gambling and rates of problem gambling – Scotland 2017. Note the 2017 data is the latest available for Scotland 

  2. National Audit Office, 2020. Figures adjusted for inflation by the National Audit Office; Gambling Commission, 2020 

  3. Gambling Commission, 2020, Nat Cen,1999, 2007 and 2010 

  4. Culture, Media and Sport Committee, 2015; Gambling Commission, 2020 (provisional figures) 

  5. These algorithms often look for signs that a gambler may be at risk through identifying and reporting on ‘markers of harm.’ These can include things like increasing stakes, late night spending, chasing losses, or behaviour change. 

  6. Gambling Commission, 2020, Gambling Commission, 2019 

  7. The problem gambling rate among children should not be directly compared with the adult problem gambling rate as it is calculated using different screens.  2

  8. Caldo F and others, 2016  2

  9. Gambling Commission, 2020 (provisional figures), National Lottery Distribution Fund, 2020 2