The Gambling Commission’s latest Annual report and accounts (the “Annual Report”) for the reporting period 1 April 2023 to 31 March 2024 (the “Period”) was published on 17 October 2024. Key focuses during the Period include the implementation of the Gambling Act Review and the Gambling Commission’s award of the Fourth National Lottery Licence, which led to the first ever change of licensee in the history of the National Lottery.

Performance report

The Annual Report contains a performance report in which the Gambling Commission provides a detailed overview of its delivery during the Period against the five strategic objectives from its 2021-2024 Corporate Strategy. We have summarised some key information from this performance report below, along with other highlights from the Annual Report.

1. Protecting children and vulnerable people from being harmed or exploited by gambling

Following the publication of the Gambling Act Review White Paper, there were a number of consultations in the Period in relation to proposed changes to the Licence Conditions and Codes of Practice (“LCCP”) and the Remote gambling and software technical standards. Proposals included: (a) improving consumer choice on direct marketing; (b) strengthening age verification on premises; and (c) reviewing socially responsible incentives to ensure incentives such as free bets and bonuses do not encourage excessive or harmful gambling. The issue that proved most controversial related to financial risk checks, with the Gambling Commission reiterating in the Annual Report that this a complex area as it aims to “protect vulnerable people from harm whilst respecting the freedom of others to gamble freely”. Therefore “[the Gambling Commission is] committed to a step-by-step approach to implementation and a pilot on the enhanced financial risk assessments to test the process and impacts on consumers.”

The Gambling Commission sets out the several changes it made to the LCCP during the Period including by: (a) setting out its approach to ‘vulnerability’; (b) extending the requirement to participate in GAMSTOP to all gambling licensees that make or accept bets by telephone and email; and (c) adding an additional reportable event that requires all gambling licensees to inform it when they become aware that a person who has gambled with them has died by suicide.

Gambling Commission publications in the Period aimed at improving the breadth and quality of data included:

• The Gambling Survey for Great Britain: Statistics on gambling participation – Annual report Year 1 (2023): Official statistics (See Other highlights below for further detail);
• Evidence Gaps and Priorities 2023-2026 (July 2023); and
• Young People and Gambling Report (November 2023).

2.    A fairer market and more informed consumers

The Gambling Commission points out that it has reviewed its approach to tackling non–compliant terms and practices, including the processing of customer withdrawals. Delays to the withdrawal of funds from accounts, (more than 2,400 complaints during 2023) remained the primary consumer complaint during the Period. The Gambling Commission has previously worked with the Competition and Markets Authority and updated the LCCP to clarify licensees’ responsibilities, including the requirement that licensees do not seek to verify information at the point of withdrawal that they had the opportunity to do earlier in the process. In the Annual Report the Gambling Commission reiterates that “Where such practices are identified, we will continue to hold licensees to account.” Please see our blog Account withdrawals: The mask operators cannot hide behind for more information.

In addition to initial outputs from the Consumer Voice research programme, the Gambling Commission has completed 58 website reviews, with 51 websites found to be either complaint or to have minor issues relating to things such as promotional bonus offer terms. The remaining websites reviewed raised more significant issues requiring further investigation and/or escalation.

Keeping crime out of gambling

The Gambling Commission explains that it has continued to work with partners to undertake intelligence-led disruption and enforcement initiatives to contribute to a reduction in crime associated with gambling, stating that “our collection, analysis and sharing of intelligence with other regulators and agencies remains a cornerstone of our work.” It has held discussions with search engine providers to discuss referrals and further action on search results and talks are ongoing to improve its ability to disrupt unlicensed operators.

Key figures in the Period in this area include:

• 384 cease and desist and disruption notices were issued to unlicensed operators resulting in 136 website restrictions through suspension or IP blocking; and
• 122 compliance assessments of online and land-based operators, 77 website reviews and 182 security audits were conducted.

In addition, from April 2023, the Gambling Commission also assumed responsibility for collecting the Economic Crime Levy from licensed casino operators.

Optimising returns to good causes from the National Lottery

Returns to good causes which were derived from a combination of the Third and Fourth Licence period totalled £1.7 billion at the end of the financial year. The Period saw the transition of the National Lottery licence from Camelot to Allwyn, who were formally granted the Fourth Licence to operate the National Lottery on 1 February 2024. Subject to the resolution of the legal challenges this licence will run for 10 years.

Key changes to the Fourth Licence include:

• A new ‘Incentive Mechanism’ so that all National Lottery products will now make returns to good causes at the same level (meaning Allwyn will only see profits rise if returns to good causes increase); and
• A move to an outcomes-based approach that will give Allwyn greater responsibility to fulfil its obligations, while retaining the Gambling Commission’s powers to intervene if they fail to do so.

Improving gambling regulation

The Gambling Commission recognises the need for an upgrade to existing systems in order to “serve the needs of the business more efficiently” and expects this to be completed during 2024 to 2025. Its requirement that licensees send returns quarterly is intended to ensure the information it receives is relevant and timely, and enables it to identify issues arising as early as possible.

Further information on the Gambling Commission’s plans for gambling regulation are set out in its Corporate Strategy 2024 to 2027 published on 8 April 2024, with commitments to be detailed in annual business plans and outcomes published in future annual reports.

Other highlights

Gambling Commission research

In respect of other datasets referred to in the Annual Report, the Gambling Commission’s Cost of Living (2023) research  found that:

“1 in 5 gamblers who reported changes in their gambling behaviour (either increased or decreased) said this was entirely due to increased cost of living. In addition, 8.5 per cent of gamblers reported using gambling to supplement their income on a regular basis.”

The Gambling Commission therefore continues to stress the need for operator vigilance during these times of heightened consumer vulnerability.

Gambling Survey for Great Britain

In respect of the Gambling Survey for Great Britain (“GSGB”), which focuses on the types of gambling activities that people take part in and the reasons why people gamble, the Annual Report emphasises that because the GSGB is a new survey, it does mean that it cannot compare GSGB data to data from previous alternative surveys and that, with time, the data collected will grow and enable it to look at trends and comparisons across this data source.

Enforcement?

The Annual Report notes that in 2023 – 2024, enforcement action led to the suspension of one operating licence and £13.4 million in fines or regulatory settlements: a reduction on the previous year. The Gambling Commission acknowledges that it has seen a significant increase in compliance from larger operators at the point of their assessment, with the rate of operators achieving compliant first-time outcomes doubling and the rate for the largest operators almost trebling in the past two years.

In terms of other operational activities, 133 operator licenses were processed and 122 compliance assessments were conducted for online and land-based operators in the Period.

Industry figures and statistics

Gross Gambling Yield (“GGY”) for the British gambling industry in 2022-2023 was £15.1 billion (a 6.8% increase when compared to April 2021 – March 2022) and GGY for the British remote and/or online sector was £6.5 billion in 2022 – 2023 (a 2.8% increase when compared to April 2021 to March 2022).

For the Period, the Gambling Commission’s fee income comprised:

• £1.21 million from operator applications (down from £2.05 million in 2022-2023)
• £0.75 million from personal licence fees (down from £0.76 million in 2022-2023)
• £23.86 million from operator annual licence fees (up from £22.89 million in 2022-2023)
• £0.36 million from miscellaneous sources (down from £0.39 million in 2022-2023)

In terms of expenditure, gambling regulation costs in the Period totalled £21.07 million (up from £19.33 million in 2022-2023), and National Lottery functions accounted for £19.34 million (down from £21.58 million in 2022-2023), of which £17.03 million was spent on the National Lottery Fourth Licence competition. Overall, the Gambling Commission’s table of year-on-year expenditure for gambling and National Lottery regulation shows an increase in operational costs since 2019-2020.

What’s next?

In the Foreword of the Annual Report, Gambling Commission Chair, Marcus Boyle and its Chief Executive Officer, Andrew Rhodes, both agree that:

“The next few years provide a once-in-a-generation opportunity to make gambling safer, fairer and crime free.”

The Gambling Commission’s next steps are set out in its Corporate Strategy 2024 to 2027. For further details on the Corporate Strategy 2024 to 2027, see the previous blog from Gemma Boore.