Analysis: Long-Awaited UK White Paper On Gambling Reform Drops

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UK white paper

The day is finally here: the UK Department for Culture, Media & Sport has released its white paper with recommendations for reforming gambling legislation in the wake of the significant technological changes since the Gambling Act‘s passage in 2005.

The origins of this project stretch back through several UK leadership changes. Earlier we heard some of the rumored recommendations contained within the work, but we now have the entire 268-page document titled “High Stakes: Gambling Reform for the Digital Age.”

The impetus for the report stems from the changes that have occurred since 2005 for both the online and land-based gambling world. As part of the undertaking, the group preparing the report received more than 16,000 submissions and hundreds of meetings with stakeholders were reportedly held.

The report states that the purpose of the review “is making sure that we have the balance right between consumer freedoms and choice on the one hand, and protection from harm on the other.”

How UK white paper breaks down

The report is broken down into six substantive categories:

Each of the report’s sections contains recommendations for bringing about changes.

Online protections

The reports note that while gambling operators are already required to examine whether gamblers are at risk and intervene, under the new recommendations operators will have a responsibility to ensure that gamblers are able to afford their gambling spend.

The affordability checks would be required at relatively low levels, including a net loss of £125 in a month or £500. This first level would focus on financial vulnerability. A second-level check would look at gamblers with losses of “£1,000 net loss within 24 hours or £2,000 within 90 days.”

It is further recommended that these check levels be cut in half for gamblers between the ages of 18-24.

Advertising, sponsorship and branding

The report notes that the Gambling Commission has already taken some steps to curb VIP schemes that could target certain at-risk gamblers. The report suggests that more work is to come review “free bets and bonuses” to ensure that they have fair terms, including time limits, such that they do not encourage “excessive or harmful gambling.”

The report also recommends that operators should go farther, using technology to ensure children and those who should not be targeted with ads do not receive them. In this vein, the report cites the removal of gambling sponsors from the front of Premier League jerseys in coming years and the recommendations that sports governing bodies adopt a “cross-sport gambling code.”

Gambling Commission’s powers and resources

The report’s biggest recommendation with regard to the Gambling Commission is that it “become a more proactive regulator.” In this regard, there is a recommendation that the Commission build out its capacity to require and evaluate more information from operators to identify licensure violations.

The report also notes that it is the intention of when “Parliamentary time allows” to grant the Gambling Commission greater authority to go after illegal operators including the power to seek court orders demanding internet providers block access to certain sites.

One of the biggest items of note states:

Government will introduce a statutory levy paid by operators and collected and distributed by the Gambling Commission under the direction and approval of Treasury and DCMS ministers.

There is also a directive to increase interest and investment into gambling research.

Dispute resolution and consumer redress

The report notes the intent to work towards implementing a consumer redress system that better serves the public through the creation of an independent ombudsman.

It further notes that if companies do not cooperate and improve their dispute processes related to social responsibility and protecting vulnerable gamblers, there will be additional legislation that will mandate the protections.

Children and young adults

The recommendations here largely suggest that operators take greater steps to ensure there is no wide or easily accessible online gambling access by those under 18 years old.

Operators will also be required to pay greater attention to age as a factor when evaluating the vulnerabilities of a customer, as 18-24 year olds have shown a higher risk of gambling vulnerabilities.

Land-based gambling

While the online gambling industry saw the reins largely pulled tighter, the land-based industry saw some measures loosened, including the ability for all casinos of any size to offer sports betting. There will also be an effort to re-allocate unused gambling licenses to “local authorities.”

Certain casinos catering to high-end customers will also be able to extend credit to certain international visitors that pass the necessary checks.

There will also be an investigation into how to move forward in a cashless world after a ban on the direct use of debit cards in machines was implemented.

What UK white paper means for US market

The UK white paper was not nearly as devastating to the industry as some had speculated it could be.

For instance, at one point some believed the report would impose monthly spending limits, though that remains on the table for further consultation. Ultimately, while operators are unlikely to be thrilled with a change to the status quo, many of the changes appear justifiable.

The US market is in a tough place at the moment, facing a lot of attention from the media and the government. While we have so far only seen what amounts to indolent efforts to address the problems facing the gambling public, adopting some of these measures proactively particularly as they relate to online protections and vigilance with regards to consumer spending, particularly with regards to the vulnerable age group of 18-24 year olds.

Ultimately, the US market would be incredibly well-served by being proactive and not waiting for Congress to establish a Special Commission to investigate the gambling industry.