Committee: DCMS and GC Failed to Protect Consumers

The Public Accounts Committee which examines the value for money of Government projects, programmes and service delivery, published recently a report regarding its “Gambling regulation: problem gambling and protecting vulnerable people” ongoing inquiry. The Committee exposed the glaring deficiencies of the UK Gambling Commission (GC) and the Department for Digital, Culture, Media & Sport (DCMS) to ensure adequate consumer protection to estimated nearly 400,000 gambling addicts in the country, as well as another 1.8 million people at risk.

Poor Understanding

The Committee outlined the Government’s poor understanding of gambling problems and their consequences, compared to other public health issues. The Department underestimated the scale of gambling harm despite evidence from the Commission’s reports. Instead of using perspectives from people with lived gambling harm experience, the Commission relies on independent research.

Despite gaps being identified in the evidence base and the call for evidence based decision-making, the Department did not fund gambling related research. Hence, both the DCMS and the GC are given 3 months to come up with an action plan to ensure the research and evidence to design an effective regulatory response.

Operator Insight Missing

Lack of data and insight into consumer problems with gambling operators hinders the GC’s ability to identify and intervene, the Committee pointed out. Licensing authorities did not conduct any inspections during 2018-19, 119 out of 380 in Great Britain and almost all in Scotland, with 60 of them haven’t done so within the past 3 years.

Despite considering online gambling as the main risk area, the GC does not utilize transaction data from banks and payment providers that it uses for AML purposes. There is no data on whether the industry is meeting its voluntary commitments regarding gambling harm protection, to identify cases for direct intervention.

The CG is tasked with providing a comprehensive gambling pattern analysis, how far the industry has met its 10 commitments and what action has the CG undertaken against the industry, as well as improvements in terms of data usage to enable the quick intervention when anything goes wrong.

Commission Lagging Behind the Industry

Another issue for the GC is that it is consistently lagging behind the industry, with slow and inadequate responses to influence gambling operators to improve protection. The recently implemented ban on credit cards does not address issues around people at the age of in-between children and adults, and the GC has no feedback as to how effective in terms of gambling harm prevention the measure is.

The Committee tasked the Commission to investigate the FOBTs impact on 16-17 year olds, propose action to be more proactive including the use of league tables and increase effectiveness of online harm reduction, within the next 3 months.

Consumers Lack Rights of Redress

The Committee members stressed out the lack of reciprocity for consumers’ right of redress whenever an operator neglects its social responsibility, and the legal gaps that do not allow the GC and the eight dispute resolution providers to intervene, leaving legal action as the only option for customers to seek redress, the cost of which is not affordable. Hence, current regulation under the Gambling Act is ineffective in terms of protecting vulnerable people. The GC and DCMS are given 6 months to work out options to resolve the gaps and increase statutory protections.

No Scale for Measuring Improvement

Despite both DCMS and GC agreeing that current levels of gambling harm are unacceptable, none of them is setting targets for reduction, or any meaningful indicators against which to measure their effectiveness and be held accountable for. Within the next 3 months, both bodies should develop outcome measures for problem gambling, as well as for the impact of their interventions.

Despite the Department commitment to reviewing the Gambling Act 2005 in regards to online gambling, the license fee model utilized by the GC limits funding for its activities. Industry restructuring also impacts its budget, with one recent merger depriving the GC to the amount of £400,000. The unwillingness from the Department to accept that proper funding for the GC will result into less expenditure for treatment, despite approaching other public health issues with this premise also weighs in.

The Department has 3 months to come up with a timetable for the planned Gambling Act review, as well as details on how to ensure funding and flexibility for the GC within the industry restructuring which implies less money for the regulator.

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