Paul Kanolik

Partner & Solicitor

DATE PUBLISHED: 27 Apr 2023 LAST UPDATED: 21 Jun 2024

Gambling Reforms – Change Is On The Horizon

The Department for Culture, Media & Sport has now published the long-awaited white paper on gambling reforms.

The Department for Culture, Media & Sport has now published the long-awaited white paper on gambling reforms, following a lengthy review into gambling laws and the gambling industry. The review was first announced in 2020, following a report from the All Party Parliamentary Group on Gambling Related Harm (APPG) and the House of Lords Select Committee’s inquiry into the Social and Economic Impact of the Gambling Industry. Both reports surmised that a review into the Gambling Act 2005 was required. Our blog in November 2020 reviewed the gambling industry landscape following the announcement of the review.

The Gambling Act 2005 and the Gambling Commission

 The Gambling Act 2005 (the Act) provides the current legal framework for the gambling industry and empowers the Gambling Commission to regulate it. This includes the power to grant operating licences to gambling operators and to sanction operators where they have breached their obligations under the Act.

The Act also obliges the Gambling Commission to issue codes of practice to gambling operators. The code which is most relevant to protecting vulnerable gamblers, contained within the Gambling Commission’s ‘Licence Conditions and Codes of Practice’, is the Social Responsibility Code (SRC). The SRC contains a number of provisions, one of which requires operators to have policies and procedures in place for customer interaction where there are concerns that a customer’s behaviour may indicate problem gambling.

The Gambling Commission has issued a number of fines over the years to gambling operators. Most recently, William Hill’s record fine of £19.2million was widely reported, and 32Red and Platinum Gaming were also fined £7.1million in March 2023. Those fines, and the majority of fines issued by the Gambling Commission, relate to breaches of both the SRC and Anti-Money Laundering regulations, with operators having been criticised and sanctioned for not having carried out sufficient checks or interactions.

Why is reform needed?

The current requirements for gambling operators are relatively non-prescriptive and do not outline specific thresholds for when interactions or checks should be completed. The gambling industry has also evolved substantially since the introduction of the Act, especially with the development of mobile technology. In the 2019 Conservative manifesto, the act was described as being “an analogue law in a digital age”. Online gambling, both on websites and apps, is a lot more prevalent now than it was when the Act was introduced, and the Act and regulations are therefore widely seen as out of date.

Prior to the publication of the white paper, there had been a lot of discussion regarding which issues the paper should address. Key considerations for reform include:

  • Ensuring that appropriate and effective safeguards and measures are in place to prevent gambling harm;
  • Balancing the interests of the majority of the population, that gamble without any issue, so that new measures are not unreasonably onerous or restrictive;
  • Completing checks at appropriate times and ensuring limits are applied as the right level;
  • Making sure that vulnerable people are not overly exposed to marketing and advertising;
  • Giving sufficient powers and resources to the regulator in order to effectively regulate the industry;
  • Holding operators accountable and ensuring that individual customers have a fair and more accessible avenue for bringing claims or complaints; and
  • Data sharing between operators in regards to customer affordability and vulnerability.

The White Paper

The white paper outlines how the gambling industry has evolved since the introduction of the Act and provides that an estimated 300,000 people in Great Britain experience ‘problem gambling’, with a further 1.8 million gambling at elevated levels of risk. The paper acknowledges the impact that gambling harms can have on both those participating in gambling, and their families and communities.

The white paper makes a number of proposals for reform, with some of the headline points being as follows:

New obligations for operators to complete checks

The Act already requires operators to identify customers at risk of harm and take action, however the white paper acknowledges that in many cases operator interventions are too late and in some cases they are not completed at all. The paper therefore considers that it is necessary to introduce new obligations for operators so that they better assess whether a customer’s gambling is affordable and/or harmful.

The Gambling Commission will therefore consult on two new forms of financial checks:

  1. For customers that have a net loss of £125 within one month, or £500 within a year, a background check for financial vulnerability indicators such as County Court Judgments will be completed.
  2. For higher levels of spend, where customers that have a net loss of £1,000 within 24 hours or £2,000 within 90-days, operators will need to give a more detailed consideration of a customer’s financial position.

For customers between the ages of 18-24, the thresholds outlined above should be halved as people below the above of 24 are deemed to be at an increased risk.

Cross-operator harm prevention system

Currently, individual operators can take steps to prevent harm on their own platforms but there is nothing formally in place for information about potentially vulnerable customers to be shared between operators. The white paper suggests that where there are serious concerns about customers, operators should work together to share data and the Gambling Commission therefore intends to consult on mandating a cross-operator harm prevention system based on data sharing. Various considerations will need to be given due to data protection regulations, however the paper confirms that the Gambling Commission will work with the Information Commissioner’s Office (ICO) to bring in a new system.

Online slots

The paper identifies online slots as being particularly high risk, as they are associated with large losses, long sessions, and binge play. There are currently no statutory stake limits for online slots, unlike land-based gaming machines, and it is therefore proposed that a stake limit of between £2-£15 per spin is introduced. There are also proposals to slow down the online slots, in order to try and restrict play.

Marketing

The white paper outlines evidence which shows that customers that claim bonuses from operators are more likely to participate in high-risk gambling behaviour. There are already restrictions in place regarding online VIP schemes to prevent the exploitation of gamblers, but the white paper further proposes reviewing the design and targeting of incentives offered to customers. Operators may also be required to alter the way they target advertising, particularly in relation to children and vulnerable people.

Recent reform already includes the Premier League announcement that there will be a ban on gambling sponsorship on the front of players’ shirts from the end of the 2025/2026 season as a move towards reducing advertising exposure towards young and vulnerable people.

Gambling Commission powers

The Gambling Commission already acts as the primary regulator for the gambling industry, but under the proposals in the white paper, it will become more ‘proactive’. This would mean the Gambling Commission analysing more data from operators in order to identify non-compliance with licence conditions. Where the Gambling Commission identifies breaches, they may then have increased resources for enforcement.

There is currently a problem with ‘black market’ illegal gambling operators that are not licenced by the Gambling Commission, with some of these illegal operators specifically targeting vulnerable customers such as those that have registered for the multi-operator self exclusion scheme, “GAMSTOP”. The white paper proposes giving the Gambling Commission increased powers to support disruption and enforcement activity, including powers to pursue court orders requiring internet service and payment providers to take down or block illegal ‘black market’ gambling sites.

Gambling operator levy

Gambling operators currently make financial contributions towards research, education and treatment, however these contributions are currently made on a voluntary and discretionary basis. The white paper therefore proposes introducing a statutory levy, which would provide for increased long-term funding. At this stage there are no details regarding the amount to be raised by the levy or how much will be payable by operators.

Dispute resolution and customer redress

The white paper states that approximately 2,000 customer complaints are made each year to Alternative Dispute Resolution (ADR) providers and the Gambling Commission, which relate to social responsibility breaches, gambling harm and safer gambling. The current ADR providers funded by gambling operators, namely eCOGRA and IBAS, do not deal with these types of complaints and the Gambling Commission does not have the power to force operators to repay individual customers. Currently, if a social responsibility complaint is not upheld by an operator, the only other avenue for redress for a customer is to pursue a claim at court.

It is therefore proposed that an ombudsman is created to adjudicate complaints relating to social responsibility or gambling harm. It is suggested that the information collated by the ombudsman may also assist the Gambling Commission to plan its enforcement activity and help improve processes and support for vulnerable people. At this stage, it appears that any operator cooperation with an ombudsman would be voluntary, although the white paper does say that if the ombudsman does not attract sufficient cooperation, legislation would be enacted to mandate this.

When will the proposals be implemented?

The white paper sets out numerous proposals for the reform of the gambling industry, however, at this stage they are just proposals. The Government will now work with the Gambling Commission to seek to implement change but further consultation will be necessary.

The white paper outlines intended timescales for key proposals, with the majority of the proposals due for consultation in the summer of 2023. The paper does, however, say that its intention is for the main measures outlined to be in force by summer 2024.

Do the proposals go far enough?

As stated above, this white paper was long-awaited and there had been much discussion about what may or may not be included. Whilst the white paper indicates a welcome move towards greater protection for vulnerable individuals, through tighter and more prescriptive regulation, there is still uncertainty about what the proposed measures will actually look like in practice.

The proposed thresholds for interaction in relation to a customer’s net loss would be helpful for identifying when a gambling operator should intervene, however the white paper does not comment on what a sufficient interaction should look like. In our experience, it has historically been the case that some gambling operators have sent automated emails to customers once a loss threshold has been met, seemingly as a ‘tick-box’ exercise, rather than completing a more meaningful and potentially more effective interaction.

The introduction of a gambling ombudsman would also be welcome, however it is important that any such body is truly impartial and has the necessary expertise and resources to adjudicate effectively. There are many who have question marks over current ADR providers and whether they would be able to perform this role. The current ADR providers also have a relatively low cap on the amount of compensation they are able to award, which would not be sufficient to properly compensate many complainants. If setup and structured correctly, a gambling ombudsman could provide a more time and cost-effective means of resolving disputes without the need for court proceedings.

Whilst the Premier League has agreed to remove gambling logos from the front of players’ shirts from the end of the 2025/2026 season, gambling sponsorship will still be able to be placed on shirt sleeves and displayed around football grounds. It is therefore questionable whether this move will, in fact, sufficiently reduce children and vulnerable people’s incidental exposure to advertising by gambling companies. Much more could be done in this respect.

A lot of detail is still to come regarding the proposals, with further consultation needed, and therefore it will be interesting to see how many of the proposals outlined in the white paper are implemented and how far the measures go.

How Ellis Jones can help you?

We would recommend that anyone who may be suffering from gambling related harm seeks appropriate help and support. This may involve approaching relevant medical professionals or support organisations, as well as implementing some of the various tools available to reduce such harm. Details of some of these can be found here.

At Ellis Jones, our lawyers specialise in dealing with gambling claims and complaints to recover monies clients have lost as a result of the failings of betting operators. To date, we have successfully recovered over £5million for clients and are continuing to actively pursue court claims and complaints on behalf of clients.

If you have experienced struggles with your gambling, have suffered financial loss as a result, and feel that a betting operator should have done more to protect you, please get in touch with the Betting and Gaming Disputes Team at Ellis Jones at bettingclaim@ellisjones.co.uk or by calling 01202 525333.

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When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.

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