Raising the bar on gambling controls

Imposing a record penalty package of over £7.8million on online gaming company 888 was a strong move by the Gambling Commission earlier this year. The action was taken following the discovery of serious failings in the company’s handling of vulnerable customers.

While the majority of gamblers do so safely, the Gambling Commission estimates that more than two million people in the UK are either problem gamblers or at risk of addiction. Their latest research has revealed that some 430,000 people in the UK suffer from a serious habit, up by one third in recent years.

The industry has a duty to protect these individuals, not just from an ethical business/corporate responsibility perspective, it is also a condition of the licence to operate and a requirement of the industry’s code of practice.

From our assessments, we know that good control schemes really can work and are essential if the industry is to help reduce gambling-related harm. We have worked with several leading companies in this sector over the last 17 years to test their processes for ensuring responsible gambling. This has included mystery shopper/test purchasing exercises to assess the effectiveness of all aspects of gambling controls, including self-exclusion schemes.

Bookmakers are anxiously awaiting the government’s review into the gambling industry, due imminently. Top of the expected list of recommendations will be limits on fixed-odds betting terminals (FOBTs), described as the “crack cocaine” of gambling. According to the Association of British Bookmakers, 11.5% of the people who use machines in bookmakers are problem gamblers, up from 7.2% in 2012.

FOBTs provide the largest source of revenue for some retail bookmakers. Current limits allow consumers to place a maximum stake of up to £100. Activists such as the Campaign for Fairer Gambling are calling for a £2 maximum stake, while compromise figures of £20 or £30 are being widely discussed.

In addition to limiting the maximum stake for FOBTs, the Department for Culture, Media and Sport which is carrying out the review, should be making five critical recommendations.

• Require all operators to monitor and report on the effectiveness of their controls around vulnerable customers, using a common reporting format that reviews what systems are in place and what action is being taken as a result of the findings. This could be done by making annual assurance statements mandatory for all licence holders, and publishing the aggregated findings.
• Implement training programmes for staff so they can identify signs of problem gambling and intercede. As a problem gambler recently argued in his court case, if a barman isn’t allowed to serve a customer who has had too many, why do bookies allow known problem gamblers to keep feeding the machines?
• Review the frequency with which bets can be placed at FOBTs – currently an individual can gamble £100 every two seconds. Reducing the maximum stake will only have a limited effect if bets can be placed with such frequency.
• Develop an industry-wide self-inclusion scheme building on the success of SENSE, a national self-exclusion scheme currently operated by UK casinos. Customers who ask to exclude from a casino because of a gambling problem will be asked to join SENSE. Their exclusion information is then circulated to all casinos participating in the scheme. A National Online Self-Exclusion Scheme (NOSES) is currently being developed by KPMG to allow self-exclusion from all on-line operators licensed to the British Gambling Commission
• Draft an industry wide code that requires gaming companies to monitor gambling patterns and intervene at an early stage if indicators of problem behaviour are identified. This could be applied to online as well as retail gambling through the development of algorithms. Research is currently being carried out in this area, allowing gaming companies to intervene and notify their customers if they suspect a problem.

This is not just a socially responsible approach to gaming, there is a strong business case for adopting such controls. As the world moves towards more licensing of gambling, companies that can proactively demonstrate the use of these models are much more likely to win licences and to obtain a favourable hearing from regulators. In contrast, the addiction modelling that is being developed will soon allow the regulator to take a harsh view of those that refuse to intervene.

In addition, there are brand reputation issues to consider. If the numbers with some form of gambling addiction continue to rise, it will only be a matter of time before gaming companies are pushed out of main stream advertising and promotion opportunities, for example on football shirts.

If government and regulators are serious about developing a responsible gaming industry, they need to ensure that the industry takes a proactive approach to responsible gambling. Governments and regulators should use these new techniques to push irresponsible gaming companies to adopt best practice or face sanctions.

Posted October 2017