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Angel Hristov November 10, 2023 8 min read
UKGC’s Rhodes Hopes for a Non-Adversarial Relationship with Operators
The full speech can be seen on the United Kingdom Gambling Commission’s official website
The United Kingdom Gambling Commission’s CEO Andrew Rhodes delivered a speech at November 8’s CEO Briefing, discussing the state of gambling in the UK, the challenges the regulator faces and outlining the commission’s desire to work with the industry and not against it.
In the wake of the publication of the Gambling Act white paper, gambling in the UK is set to change, leading to a polarization within the sector. He added that the commission has no commercial interest, strives to be impartial and seeks to set clear statutory objectives.
Rhodes reasserted that certain parties have been misinterpreting statistics and misinforming the public, making it increasingly challenging to engage in a meaningful debate. While the CEO acknowledged that everyone is entitled to their opinion, he added that the ongoing situation isn’t helping anyone.
Despite that, Rhodes remains committed to leading productive conversations with the industry and commenting on the difficult things. He said the UKGC hopes for a “more grown-up relationship” with gambling operators, leading to transparency and collaboration. To that end, Rhodes addressed what gambling companies can expect from the UKGC and its three-year Corporate Strategy.
The Industry Can Now Focus on More Complex Issues
Rhodes admitted that the joint effort between the UKGC and gambling regulators has led to a decrease in cases of extreme harm. As a result, the industry can now start looking at more complex issues.
Rhodes also recognized that the industry is diverse and one-size-fits-all solutions are not always the best. Because of that, the industry needs to strike an appropriate balance and must start by forming a constructive relationship with the regulator.
One of the things the CEO mentioned is the exaggerated risk the black market represents. Rhodes admitted that some risk exists but said that the industry must turn the anecdotal examples into something actionable.
He also noted the changing nature of risk, noting that active players are now playing more. The UKGC’s compliance program focuses on risk and ensuring that operators in tiers two and three grow in a responsible fashion.
The Debate Is Becoming Increasingly Bitter
Rhodes underscored the importance of the Gambling Act Review and its implementation, saying that much of the regulator’s focus in the following year will be dedicated to that. He proceeded to comment on the “very particular ecosystem” in the UK.
The CEO promised operators that the UKGC is constantly seeking to resolve conflicting requirements. As a result, the commission seeks to maintain a healthy industry while also protecting vulnerable audiences from harm. According to Rhodes, balance is exactly what helps the UKGC make complex judgments.
However, considering the size of the British gambling market, there are many people with strong opinions on where this balance should be.
Rhodes mentioned the horse racing debate that has been becoming increasingly bitter, with many people seeking to scrutinize any word he speaks. As a result, Rhodes has heard a variety of opinions, many of which have become increasingly extreme.
I can completely understand the passion for their sport, for their sector and this is something DCMS explicitly factored into its impact assessment.Andrew Rhodes, CEO, UKGC
Rhodes also mentioned that sometimes, people tend to overexpose the gambling side of things. On one side, Rhodes pointed out that soccer, for example, will continue to be popular, regardless of whether players can wager on it or not. On the other, Rhodes agreed that racing’s relationship with gambling is more unique and that a decline in betting will deprive the sector of money. In addition, he pointed out that the racing sector depends on an audience five times smaller than other sports betting.
Rhodes Addressed the Affordability Measures yet Again
The UKGC CEO then discussed the controversial affordability measures. He noted that the horseracing industry is currently petitioning against the measure.
This is a point of principle disagreement – it does not matter whether checks are frictionless or not, the point of the argument is there should be no checks at all.Andrew Rhodes, CEO, UKGC
Rhodes used the opportunity to remind operators that the checks in question would only affect the online gambling sector and not the land-based sector.
Rhodes reminded the industry representatives that the financial checks appeared on the white paper for a reason since many examples showed unaffordable gambling taking place with little to no intervention.
He said that compliant companies should keep in mind that their compliance doesn’t mean that everyone is playing by the rules. In short, the industry has to be treated as a whole.
Rhodes once again regretted the ongoing misunderstandings and pointed out that both he and the Secretary of the State have reiterated that the checks would only be tested, trialed or implemented when reliable tools are available. He added that it is imperative for the UKGC and the industry to work together to deliver a solution that satisfies the government’s vision.
The Industry Must Strike a Balance
Beyond the claims that affordability checks would negatively impact the sector, the executive also addressed the belief that the checks would intrude on players’ liberties. He said that the balance between individual choice and protection of vulnerable customers.
The CEO asked company representatives where they draw the line between choice and harm.
Where do you pitch your risk appetite? Where does the Commission draw the line? How much is enough information in a risk-based model? These are the sorts of very difficult questions I alluded to when I spoke to you all last year.Andrew Rhodes, CEO, UKGC
He added that the balance is something the government will have to consider in the following months.
The Industry Will Continue to Change
Rhodes warned that the creation of an Ombudsman would introduce further change. He noted that the UKGC continues to receive an overwhelming amount of complaints that ought to be directed to a specialized body.
While the CEO emphasized that the Ombudsman would be a good thing for the players, he warned operators that it would change perceptions of the entire sector. He added that the introduction of the statutory levy would also drive further change.
Rhodes also commented on the importance of maintaining high AML standards and pointed out how FATF-graylisted countries often suffer a variety of setbacks. The government is already considering a single regulator for AML. The government plans to task it with conducting checks regardless of whether the UKGC introduces affordability checks or not.
The UKGC Will Encourage Collaboration
In the meantime, the UKGC CEO reasserted the commission’s intention to join forces with other regulators all over the world. As previously explained by Tim Miller, cooperation can ensure that licensees are also behaving abroad.
While Rhodes acknowledged that some tension between the regulator and the regulated is unavoidable, he reasserted his desire to work with the industry in a non-adversarial manner. To that end, the UKGC will continue to have roundtables with different operators and encourage transparent discussion.
Rhodes pointed out that the UKGC is ramping up its engagement. Last financial year it held 220 meetings, visits and events with stakeholders. This year, it has already held almost 150.
So the Commission is committed – where possible – to a more supportive, transparent and grown-up relationship with any operator that is committed to their compliance and open to working with us. And it’s not just me – you have some of the Exec team here – and the wider team are increasingly reaching out to help ensure we are familiar and reachable to you.Andrew Rhodes, CEO, UKGC
Rhodes concluded that compliance is non-negotiable, which is why a better relationship between the regulator and the regulated can benefit the entire sector.
Rhodes Teased Details about the UKGC’s Corporate Strategy
In conclusion, Rhodes teased a small update on the development of the UKGC’s three-year corporate strategy. The strategy, which the UKGC will publish next spring, will see the commission bolster its efforts to engage with the industry and ensure compliance.
Much of what comprises the strategy is not new, Rhodes noted. However, the plan demonstrates the UKGC’s desire to invest in this approach and reduce the reliance on formal enforcement and highlight transparency around compliance as a key theme.
Rhodes concluded that the UKGC and its licensees will likely always have their rocky times. However, he is keen on building on the ongoing efforts to encourage a collaborative and transparent approach. In line with that, Rhodes wished everyone who attended the meeting.