On 6 November 2020 the Gambling Commission published its first National Strategic Assessment (“NSA”) alongside its annual, Raising Standards for consumers – Compliance and Enforcement report 2019 to 2020.

What is it?

The NSA is a document comprised of the latest available evidence with the aim of assessing the issues and risks associated with gambling related harm. Gambling Commission Chief Executive, Neil McArthur has stated:

“We will use our National Strategic Assessment as the foundation for prioritising our work over the coming months and years.”

In the accompanying press release, Neil McArthur adds:

“We look forward to working with the government on the forthcoming review of the Gambling Act and alongside that work we will be working hard to address the issues that we have identified in our Strategic Assessment.

We have demonstrated that we are willing and able to respond quickly to emerging issues and risks and that we will use the full range of our powers to protect consumers.  We and have made considerable progress in many areas to make gambling safer – but we want to go further and faster.”

The report outlines the Gambling Commission’s assessment of the key issues faced in making gambling fairer, safer and crime free, and sets out the priority actions and an overview of progress that has been made since 2019.

The Gambling Commission acknowledges that whilst neither gambling participation nor problem gambling rates are increasing, the continually evolving landscape of gambling presents new risks and ongoing challenges.  In the Executive Summary the Gambling Commission states:

“We must see the industry doing more to proactively identify and address the risks within their businesses.  An approach to raising standards for consumers which is heavily dependent on the Commission using its formal regulatory powers will continue to damage the industry’s reputation, restrict activities and result in escalating penalties.”

The regulator maintains that the best and most sustainable way forward is for operators to allow the distinction between regulatory and commercial considerations to diminish if not disappear altogether.

How will it work?

The Gambling Commission will use “priority actions” to target relevant risks and issues whilst highlighting areas where significant progress has been made.  Assessment is built on four “pillars” relating to:

1. the Person gambling (Chapter 1);
2. the Place gambling occurs (Chapter 2);
3. the Products available to customers (Chapter 3); and 
4. the Provider of facilities for gambling (Chapter 4).

The NSA is structured around these pillars, which are coupled with sections on measuring the effectiveness of gambling regulation (Chapter 5), Covid-19 and its impact on gambling consumers (Chapter 6) and the timeline for action (Annex 1).

The NSA is essential reading for any Gambling Commission licensee.  Unsurprisingly, the content is closely aligned to the Compliance and Enforcement Report (see our blog on 18 November 2020), published on the same day, and there is a strong emphasis on affordability (Chapter 1, pages 14-18).  We strongly encourage B2Cs to review this section carefully, particularly figure 7 and the “clearly unaffordable gambling” case studies.

The NSA’s scope of evidence aims to be wide ranging, drawing on:

• the Gambling Commission’s own compliance and enforcement work;
• its advisory bodies, the Advisory Board for Safer Gambling as well as the Digital Advisory Panel;
• the Interim Experts by Experience Group (involving those with direct experience of gambling related harm);
• industry colleagues and representatives; and
• the findings of recent Parliamentary reports (see here).

Why now?

Such a document is no doubt in line with the Gambling Commission’s licensing objectives and follows on from regulatory action and research that the Gambling Commission has already performed (see Annex 1 of the NSA for a timeline of action). However, it is also arguable that the speed and depth of their action is partially motivated by the House of Commons’ Public Accounts Committee assessment in June this year that more and faster action was needed by the Gambling Commission to protect vulnerable customers and consumers’ rights to redress. Neil McArthur seems to echo this in his above statement that “[the Gambling Commission” want[s] to go further and faster” with its progress.

What to expect next?

The NSA includes numerous “GC actions” throughout.  We have summarised these, by chapter, as follows:

Chapter 1: the Person gambling

In response to the key issues and risks regarding:

1. ineffective KYC approaches including affordability checks;
2. delayed and ineffective responses to at-risk behaviours;
3. inadequate controls for more engaged gamblers;
4. underage gambling; and
5. gaps in evidence and understanding of gambling-related harms.

The Gambling Commission proposes to act on the following:

• Consultations regarding more effective KYC and early identification and effective responses to at-risk behaviour, to include: responding to and implementing the Gambling Commission’s customer interaction consultation on themes of affordability, vulnerability and identifying and acting on harm indicators, including the management of high value customers. In addition, the Gambling Commission will issue a consultation on streamlining the approach to tracking of gambling participation and prevalence of at-risk and problem gambling, with the aim of implementing consultation outcomes in 2021. The Gambling Commission also intends to publish a statement setting out the principles and key areas of work in its approach to vulnerability.
• Developing first-rate evidence to inform regulation and legislation, including but not limited to: added questions to the Gambling Commission’s quarterly online omnibus survey to understand the public’s experience of gambling-related harms; longitudinal study of gambling behaviours and problem gambling to inform future improvements to gambling research; a permanent advisory body (Experts by Experience) to build on the Gambling Commission’s interim arrangements.
• Developing risk-based approach to harm minimisation in response to more engaged gamblers, such as, developing solutions to provide a ‘single customer view’, and including an updated approach to and use of technology.
• Regulatory powers: continued regular investigation of operators’ adherence to social responsibility code provisions and review of its commitment to Annual Assurance Statements; ensuring compliance with strengthened age verification controls and supporting industry bodies generally in their legal and regulatory oversight.

Chapter 2: the Place gambling occurs

In response to the key issues and risks regarding:

1. the accessibility of online gambling;
2. the anonymity associated with premised-based gambling; and
3. socially responsible advertising.

The Gambling Commission will take action in the following ways:

• Partnership and industry engagement, to include: partnership with key regulators to ensure gambling is fair, safe and crime free; working with product design groups to challenge the industry to implement better consumer protections; engaging the non-remote sector and promoting initiatives that reflect the Gambling Commission’s compliance and enforcement activity elsewhere.
• Research and knowledge, to include: increasing knowledge on digital industries and emerging technologies to ensure regulation remains fit for purpose and responsive to emerging risks; gathering evidence on the most effective ways to prevent bonuses being offered to consumers displaying indicators of harm; building on its interim guidance issued during the first Covid-19 lockdown; monitoring progress on the use of ad-tech to proactively target online marketing for gambling away from children, young people and those who are vulnerable to harms.
• Regulatory powers: targeted actions using the Gambling Commission’s regulatory powers to continue to raise standards; monitoring the effectiveness of the Gambling Industry Code for Socially Responsible Advertising which came into effect on 1 October 2020.

Chapter 3: the Products available to customers

In response to the key issues and risks regarding:

1. potential harms associated with online game and platform design
2. regulatory risks presented by gaming machine product characteristics and environments
3. matching controls to the risks presented by product characteristics such as speed of play, accessibility and return to player; and
4. making consumer and regulatory outcomes equivalent to commercial outcomes.

The Gambling Commission will work on the following:

• Consultations and responses, to include: publishing a response to the Gambling Commission’s consultation on safer game design; publishing a response to its proposal to ban reverse withdrawals.
• Research and knowledge, to include: publishing the findings of the randomised controlled trials with three large operators into anchoring and commitment devices; active engagement in research programmes including the GambleAware-funded project on online patterns of play, led by NatCen.
• Testing: implementing the enhanced test house framework and ensuring that the United Kingdom Accreditation Service assessments of test houses are robust and effective.

Chapter 4: the Provider of facilities for gambling

In response to the key issues and risks regarding:

1. transparent cooperation regarding ownership and governance;
2. the evolving risks presented by illegal gambling; and
3. upholding the licensing objective of keeping crime out of gambling.

The Gambling Commission will take the following action:

• Consultations and responses, to include: publishing the response to the consultation on the Gambling Commission’s corporate governance including its approach to regulatory panels.
• Research and knowledge, to include: publishing clear metrics to measure the effectiveness of regulatory interventions; increasing understanding of the scale of illegal gambling and exploring disruption techniques.
• Daily operations, to include: improving data systems and capacity to ensure quicker identification of and response to consumer issues; expanding capacity and availability of accredited online investigators and necessary software tools respectively, in order to tackle illegal gambling.
• Regulatory powers, to include: upholding stringent processes to assess the suitability of prospective licensees and taking swift enforcement action against non-compliant licensees; updating the Gambling Commission’s money laundering risk assessment; and continuing to support the sport and sports betting integrity action plan.

With regards to the impact of Covid-19 on gambling consumers (Chapter 6), the Gambling Commission has stated that it will continue to collect and publish data to inform on the ongoing impact and associated risks. 

As stated in relation to the providers of facilities for gambling (Chapter 4), the Gambling Commission is preparing key metrics on the impact of its regulation and where it is making progress in changing the behaviours of operators. It will use these metrics along with the four pillars of assessment to help prioritise its responses to harm minimisation in the short and long term. With its evidentiary emphasis, the NSA is a foundational document for the Gambling Commission to continue to develop its regulatory approach and impact and help inform stakeholders. The Gambling Commission itself states:

“Good regulation is informed by good evidence. We continually seek to improve the evidence base; to have access to better data, to move away from just counting problem gamblers to understand more about specific gambling-related harms.”