The long-awaited white paper is finally here!
We’ve finally had the chance to read and digest the 268 pages, and we’re excited to share our insights with you. While there are some positives, like introducing a mandatory levy on gambling companies and creating an ombudsman, we also want to shed light on where the paper falls short. We’ll discuss why the failure to change the conflicting objectives of gambling regulation to enable commercial growth and to protect vulnerable people is concerning and why the absence of a statutory duty of care is a significant failure that might come back to haunt us for decades to come.
We welcome the introduction of new rules that work to protect customers, such as limits on stakes and affordability checks. However, these do not change the underlying mechanisms and behaviour of either the gambling industry or the regulator. This is a fundamental point, as without changing this, we will likely be back at square one after a few more years of digital innovation in the gambling sector. Think of it like this – we have now received an aspirin for our headache but have done nothing to address the reason why we had it in the first place. As a result, it may be that our heads will start aching again very soon.
Our thoughts
We are excited about last week’s announcement of the long-awaited white paper. It made the headlines towards the end of the last week and for a good reason. It’s a step towards a safer and more responsible regulatory approach to gambling.
Having read the document fully and put it into the context of the experiences people harmed by gambling shared with us through Tackling Gambling Stigma, we felt it was only right to share some of our thoughts, both the good and the not-so-good. (for more insight into what people wanted to see change, you can read their experiences here.
Firstly, it’s great news that the white paper has been released and includes long-awaited changes for the better. For example, a new mandatory levy will be paid by gambling companies, replacing the current voluntary levy. This money will be ring-fenced to fund research, education, and treatment for gambling-related harm. This will mean that all gambling companies, large and small, will pay their share to mitigate the harm they cause. In addition, it will ensure that adequate and independent funding is available for the first time.
Another major victory for those experiencing harm is the creation of an ombudsman. Currently, there are no independent or formal means for redress for customers. Ombudsmen are independent and impartial organisations that provide a mechanism for consumers to enforce their rights against companies. This is particularly important in the gambling industry, which is inherently risky and has a high potential for harm. A gambling ombudsman will provide a much-needed means for consumers to resolve disputes with operators, ensuring that their complaints are heard and their rights protected. Additionally, the ombudsman will collect data on industry trends and issues, which will help improve industry standards and practices. Creating a gambling ombudsman will be a valuable addition to the gambling regulatory landscape, providing a much-needed layer of consumer protection and promoting industry accountability.
Another positive inclusion was a limit on stakes for online play, with an upcoming consultation to decide on the final amount (ranging from £2-£15). Not only will this bring online gambling more in line with land-based gambling, but it will also help limit the amount of harm one can experience in a short time. If you want to learn more about why this is so important, we recommend reading our contributors’ experiences of gambling harm and money. Additionally, we are also pleased to see that there will be “slot-specific measures to give greater protections for 18 to 24-year-olds who the evidence suggests may be a particularly vulnerable cohort”.
Lastly, we are also happy to see the introduction of affordability checks. While operators are already required to identify customers at risk of harm and take action, there have been too many cases of interventions coming too late or not at all. The proposed checks will help prevent harmful losses and support those at risk of gambling harm. However, we are worried that the proposed amounts will miss those most vulnerable in a society whose gambling might not be picked up by the proposed limits. (You can read more on our sister website, www.tacklinggamblingstigma.com)
Our two main concerns
However, there are still some concerns to be addressed. Below we outline our two main concerns with the white paper. Namely, it was a failed opportunity to introduce a statutory duty of care, and that gambling is still seen as part of economic growth and and treated as a normal commercial good rather than an inherently harmful one. This means that there is still a problem in changing the underlying principles of gambling regulation. Both of these are explained in more detail below.
A statutory duty of care
We fear the failure to introduce a statutory duty of care in the white paper will be felt for years, if not decades, to come.
So why is a duty of care so important, and how does it work?
A statutory duty of care for the gambling industry would mean that companies operating in this space have a legal obligation to prevent harm to their customers.
In the gambling industry, a duty of care would require companies to go beyond the minimum regulatory requirements and take proactive measures to protect their customers from harm. For the gambling industry, this would mean that they would have to build in safety by design in their products. The gambling sector is a rapidly changing digital industry. The government cannot keep up with the rapid pace. Hence, it ends up playing regulatory whack-a-mole. As fast as the government puts in new rules, for instance, on specific game features or specific affordability checks, the gambling industry finds a way past them. A statutory duty of care would require the industry to consider safety in all their developments and hold them accountable if they do not.
One of the key benefits of a statutory duty of care would be to shift the focus of responsibility from the individual gambler to the companies that profit from their losses. This is important because gambling can be a highly addictive activity, and many people who develop gambling problems do so due to the design of the products and the tactics companies use to encourage continued play.
By placing a legal duty on companies to prevent harm, they would be more incentivised to develop safer products and invest in harm reduction measures. This would help create a more responsible and sustainable gambling industry, ultimately better for both customers and companies in the long term.
Overall, a statutory duty of care would represent a significant step forward in preventing gambling causing harm and would help to ensure that companies operating in this space are held accountable for their actions. We think the absence of it in the ‘once in a generation’ opportunity that was the white paper may be well be discussed as the biggest omission for years to come.
Profit vs public health
The second omission in the white paper is the failure to formally change how the government views gambling as a normal commercial good and a contributor to economic growth.
Currently, the law has two opposing goals for regulating gambling. On one hand, gambling is seen as a way to increase tax revenue and promote economic growth. On the other hand, there is a duty to protect vulnerable people, including children, from being exploited or harmed by gambling. This means that the government and regulators must balance the need to promote the growth of the gambling industry with the need to protect vulnerable people, and can be reluctant to introduce regulations that would limit the industry’s potential growth.
However, these goals are contradictory for the gambling industry. This is because gambling companies make money by encouraging people to lose money, so the more profit they make, the more likely it is that people will be harmed. Additionally, gambling takes money from communities and funnels it into large companies, without benefiting the economy or communities as much as other commercial activities. The harm that gambling causes also generates social and economic costs. In the case of gambling, where the profit is made from people losing money this has the outcome of state-sanctioned harm.
How this looks in practice can be seen, for instance, in the Gambling Commission’s principles for licensing, updated in 2021, where it states, “The Commission will ensure that its regulatory approach does not impose unnecessary regulatory burdens in upholding the licencing objectives in the Act, and does not unduly hinder the economic progress of licensees.”
If the white paper had set out to change the objectives to be solely to prevent harm to public health, regulatory decisions would be more clear cut, and the gambling be subject to stricter regulations and limitations, similar to alcohol and tobacco. This would help to curb the harm caused by gambling by limiting its availability and visibility and making it more difficult to access. A clear example of this can be seen in advertising and marketing, where the government decided not to restrict gambling advertising as it has done to alcohol and tobacco.
It is important to recognise that gambling is not a victimless activity. On the contrary, the harm caused by gambling can affect individuals, families, and communities as a whole. Government changing the underlying principles of how gambling is viewed would focus all regulation on reducing this harm and promoting public health.
This change would help the government and regulator in resolving the internal conflict between viewing and treating gambling as a public health issue and, at the same time, gambling as a growing commercial sector and a lucrative source of tax.
Closing thoughts
Make no mistake, the white paper is a giant leap forward and will lead to a safer gambling industry. The announced ombudsman will be a much-needed means for consumers to resolve disputes with operators, ensuring their complaints are heard and their rights protected. In addition, the levy will ensure that adequate and independent funding is available, and we can only guess the long-term knock-on effect.
However, we also recognise and emphasise the need for a fundamental shift in the regulation and perception of the gambling industry. Without addressing these underlying issues, we risk repeating the same cycle of regulatory shortcomings in the future. It’s time for a paradigm shift towards a more responsible and sustainable approach to gambling.
