21 October 2024

This speech was delivered by chief executive Andrew Rhodes at the International Association of Gaming Regulators (IAGR) Conference on 21 October 2024.

Please note: This is the speech as drafted and may slightly differ from the delivered version.

Thank you for that introduction, thank you everyone and ‘buon pomeriggio a tutti’.

IAGR is that rare organisation that rewards your engagement, that always gives more back to you than what you put in and always provides a forum for positive action. So believe me when I say it is a real privilege to be back here again, this time in the Eternal City, to speak to you today.

And on that note, I would also like to say ‘grazie mille e buon lavoro’ to IAGR and International Masters of Gaming Law (IMGL) for organising the conference here in Italy. Do not worry, I will not be pushing my luck with my Italian beyond that, but it was great to hear from Mario earlier in his welcome remarks and it was also a pleasure to meet with the ADM earlier today. I would also like to welcome the fact that this year’s Conference is a collaboration with the IMGL. Anyone who has heard myself or Gambling Commission colleagues speak previously will know collaboration is something we are very focussed on, so I look forward to what this partnership will deliver this week.

But what will I be using this slot to talk about? The topic of what gambling regulation looks like in the digital age – an age we have been in for a little while now of course – is an important one and one I think that the Gambling Commission are well placed to discuss. Having been a point of consumption regulator for over ten years for an online gambling sector that is worth £6.5 billion by Gross Gambling Yield (GGY) out of a total that now sits at £15.1 billion for all gambling activity in Great Britain, we have seen a lot changes and developments in that time. Given how many of the challenges we see today are multi-jurisdictional, many of the operators are common to us and as data changes the art of the possible in so many directions, it makes sense that regulators and those who work in our ecosystem work together as much as we can.

Collaboration is key to this and events such as IAGR and the partnership with IMGL give us a platform to make the space and time to not just think about that but to build and use the connections we have. I’ll spend some time talking about how in this digital age, we as regulators can and must innovate through data ourselves and not just look to police what industry are doing with theirs. I’ll draw on some examples from the British market and update on some of the relevant things that are happening back home. And I’ll set out how I and the Commission see the road ahead, highlighting some next steps we intend to take what we think that might mean.

Which brings me back to the point about collaboration.

Collaboration is something that the Commission sees great value in because it is the right thing to do. Even when it is hard.

Collaboration is key

In that way it also aligns with the three principles we call the Commission Story that we view all our work through the prism of:

• Doing the right thing

• Putting people first

• And regulation that works for all.

These all work closely with our new Corporate Strategy that we published earlier this year, and collaboration is a key part of that Strategy, including with our partners internationally. I’ll highlight later how these principles are reflected in our work as we go along but it is worth stating at the outset that collaboration is not always easy.

There is a natural tension between an industry and its regulator and this will often be most keenly felt when the issues are perhaps less obvious or where everyone agrees on the problem, but have very different views on the cause or the solution. You sometimes hear a phrase used to describe the relationship between the industry as ‘poacher versus gamekeeper’. Perhaps that was true once, and maybe it still is in some places, but I don’t think it would be the right thinking at all. The reality is the industry needs to be sustainable and the regulator needs to ensure growth, freedom and innovation are in balance with consumer protection and fairness. The views of society and politicians have changed in recent years as they react to what they might feel is excessive in a way they didn ot before. This is perhaps most obvious in the debate about advertising and as we see the US market grow, there is a very active debate about the balance between liberalisation and protection from harm.

These questions and challenges are not easy ones and there will be a multitude of views. When we say ‘regulation that works for all’ we are talking about all 22.5 million consumers in our market. That spectrum has people who gamble casually, gamble as a professional, for some it is a major hobby, others want to win the lottery and others experience devastating harm. All of those consumers want and need some things which are different, and may even compete against each others interests. The way we address these issues is by collaboration and being constructive with the industries we regulate. That is complex as this is also their business and changes do not happen in isolation. For example, recent media speculation in the UK at possible changes to gambling taxes wiped £3.5 billion off the share value of our largest operators. A newspaper story.

Collaboration might be less complicated when it comes to regulators working with each other and in our own way we all want safer, fairer and crime free gambling. But whilst modern technology helps, maintaining close relationships and fostering useful cooperation between regulators across the globe is not without its challenges too. So even with willing partners, like everyone in this room today, collaboration can be far from simple when you consider challenges like data and information sharing, national laws and expectations and a range of other things. But it is worth it and if we work at it, we can find ways to succeed.

Gambling is a global tech business and individually, even the largest of us are dwarfed by the resources that some of the big multinational operators possess. Tackling some issues like illegal online gambling that can not be solved through our formal powers alone can look problematic. But working together, our experience, our shared goals and our reach can help each of us raise standards at home and level the playing field abroad.

Over the last twelve months I have been pleased to see the development under IAGR’s leadership of an Illegal Gambling Working Group. The group came out of the many discussions we had on the topic at IAGR last year, in Botswana. Even at this early stage it is making a difference. Something you can hear more about from the Commission’s Director of Enforcement, John Pierce, later this week.

Through IAGR and the bilateral relationships we have been able to build with many of you here, we have been able to share best practice and research, support others with our insight and gain theirs in return. And we have crucially been able to share intelligence where appropriate, with other regulators both on the failings of licenced operators and on the predatory behaviour of unlicensed operators as well.

And for many regulators who are just now gaining responsibility for the online market or who are newly set up, I know that being able to talk to the Gambling Commission and others like us, has helped them get up and running. Regulating a market that never stands still, and rarely gives you time to catch your breath. I know this because you tell me yourselves.

In this way, it was great to be able to convene a roundtable of North American regulators a couple of weeks ago, sharing experiences, highlighting areas we can work closely on going forwards. And similarly I look forward to the meetings I and my team will be having this week with some of you here as well.

I think many of us get how powerful working together is but making room to prioritise collaboration can be hard. So well done for being here this week. Behind me you can see some examples of the engagement we have had with all of you over the last 12 months. Each instance told us something we did not know before, helped us connect a few more dots and helped build relationships we can use to help solve problems in the future.

Collaboration also helps us bring more diversity to our thinking and our problem solving. In this way it can help drive innovative solutions. Something we should all be spending more time looking at.

The other big opportunity for we as regulators to make use of as we look for those innovative solutions is data. We all know this. For the Commission it is another area we chose to focus on in our Corporate Strategy. For some - and for many sectors in the modern economy - the most valuable asset in the world is data. Both at the micro and personal level but also through the raw power of data at scale. We know this. But often the question is how we can make sure we have access to the data we need and then how can we make use of it for our particular focus: safer, fairer and crime free gambling.

On the first question, this is something the Gambling Commission has been investing heavily in over recent years. The most high profile is the work we have done to update our participation and prevalence statistics methodology. Work that led this year to us introducing our new official statistics: the Gambling Survey for Great Britain (GSGB).

The GSGB – as we immediately started calling it – is the result of years of hard work and investment in terms of money, people and time. The largest Survey of its kind in the world, we are now confident that we have an independently recognised robust methodology that will help us to track trends in gambling behaviour in the years to come. The GSGB provides a consistent and frequent way of collecting data amongst adults in Great Britain and will provide regular data outputs in order to help us understand changes in gambling behaviour amongst the population and amongst sub population groups. For the first time we can delve down to the national and regional levels in terms of participation. And we have data detailing the positive impacts of gambling people experience as part of our official statistics – not just a picture of the risks and consequences.

We have also been completely transparent in the development of the GSGB over the years, on the potential limitations of the methodology as well as its strengths. We commissioned a review of GSGB by a leading independent Professor in the field, shared his findings, committed to his recommendations and we continue to invite feedback on it since publication. All of this does not stop some wishing to turn back the clock and stick with the previous official statistics. This despite the fact that the public body in the UK that commissions the Health Survey – one of our previous sources of official statistics – has recently consulted on changing their own methodology. And we get that. Like collaboration, change is hard, even when it is the right thing to do. But I am clear. The Commission has taken the steps we needed to both safeguard and improve our data.

GSGB is a key pillar of our data innovation programme, sitting along with other data sources we are investigating to build a more rounded and robust evidence base. Our Research and Statistics Department, headed up of course by IAGR’s own President, Ben Haden, are engaged in groundbreaking work on developing a Regular Feed of Operator Core Data or ‘ROCD’ project that we have begun developing with some volunteer operators. I hope we’ll be able to say more about that in the coming months. We are also making strides in the use of open banking data as well.

Along with the GSGB, another pillar of our data transformation programme is our use of Open Banking data. We recently ran a successful pilot to see if we could make use of Open Banking data to help us understand gambling customers, operators, and the market. This dataset comprises thousands of individuals’ anonymised banking transaction data, which we are using to understand gambling in Great Britain from perspectives that we have not seen before.

The project has already yielded tangible benefits, with the pilot phase successfully contributing to the threshold setting for the new financial vulnerability checks, as well as demonstrating potential for continuing to improve our understanding of how the market works and giving us our broadest, most objective, view of individuals’ gambling spend behaviours and their context.

Following the successful pilot, we are expanding the project to obtain regular updates of data to understand consumers and the market over time.

But what about the other question I raised? How can we make use of all this data?

I think one way of answering this question takes me back to the Commission Story that we have and particularly putting people first. Illegal online gambling is something every gambling regulator must grapple with. And the impact of it on people who get caught up in it can be devastating, with none of the protections that our regulation ensures in the licensed market. The worst examples in the UK target gamblers who are signed up to self-exclusion schemes, directly marketing to them and appearing in their search results online.

I’ll discuss how we are working to frustrate it shortly but from the data side, we are also looking to do more.

If we are to be able to tackle the problem of illegal online gambling we need to understand more about how its impacting the public. How many are currently using illegal sites and why.

Just this morning the Commission has published a paper detailing on the methodology we are developing to estimate how many people are gambling with the illegal market and how much they are spending in it.

Through our Consumer Voice programme of research, we are also looking to develop in depth qualitative evidence for why people gamble with illegal operators. Combined, these two data projects look to make use of the wealth of data we can now collect and draw learnings that can immediately inform our work to tackle the illegal online market.

I mentioned a moment ago some of the work we have been doing with open banking data. Let us have a look at some of the ways we have been using the data, first looking at the perspective of individuals. We can see when people make deposits and withdrawals to gambling operators. This gives us a good proxy for gambling spend over time, though we can not directly see spending activity within their accounts.

This plot shows the net deposits for three of the most active gamblers at a single operator in the first six months of 2023. The line goes up when they make a withdrawal, down when they make a deposit.

This first plot only shows the transactions with Operator A, so this is what that operator can see of their transaction behaviour. Individuals 1 and 2 (the red and green lines) both appear to make a small net spend with the operator over the period. Individual 3 appears inactive for the first three months, before briefly becoming an apparent net winner, then finishing the period with a net spend of £7,000 after six months.

However, this single operator view of gamblers’ behaviours is not necessarily the full picture. We know that many individuals gamble with multiple operators, and this is more frequently the case with more engaged gamblers. A major strength of using open banking data is that it shows transactions across all operators and this plot shows us the net deposits for the same individuals across all operators in the same period. We can see here that Operator A only sees a partial picture of these people's spending behaviours.

The first thing that jumps out here is that the total net spend is very different. On the left, 1 and 2 (in red and green) appeared to finish the period in a similar net position, however, Individual 1 spent much more with other operators and was the highest overall spender of the three. Meanwhile, Individual 3 (in yellow) was a much higher overall spender than they appeared to Operator A. In the first three months their line is flat on the left-hand plot, so Operator A may not have known they were actively engaged in gambling, however on the right we can see that they are gambling with other operators throughout this period.

We know this is sometimes the case, but what we are able to do now is actually see it in practice and have the data and evidence we need to start to ask ourselves questions about what the right course of action might be.

We saw in the previous slide what a difference it makes to zoom out from a single operator, to look at customer behaviour across all operators. But what can we learn about those other operators?

The Open Banking data enables us to explore which operators have similar groups of customers. By looking at which companies that multi-operator gamblers spend money with, we can say whether any two operators in the market share a high proportion of their customers.

This network diagram shows a line when a high proportion of an operator’s customers also make up a high proportion of another operator’s customers. There is a line drawn between two operators when the proportion of shared customers meets a threshold.

To carry on from the previous slide, we can see which other operators that gamblers who use Operator A are more likely to gamble at. Operators G, M, Q, S, T and U all share a high proportion of their customers with Operator A.

This could mean lots of things, for example, they may be offering similar products, or a similar gambling experience. They may advertise in the same places or, potentially, they could share weaker or less intrusive customer protections.

Consumers in sports betting have been able to bet on game-level events for a long time. It started with the full-time result, but expanded into other markets like how many goals, tries, runs, points or whatever. This coupled with the popularity of accumulators and then bet builders has made these micro markets a major factor for sports bettors.

The availability and provision of real-time or near-real-time data has totally changed the nature of betting in these markets, whether it is in-play or before the event started. Today, sporting leagues and data providers are integral in their provision of data for these markets, which are massive.

If you look at this video, you can see this one cricket match has a massive array of markets the consumer can engage with. Beyond these game level events, however, we find player level events. Some of these are easier than others and they are binary – player X has either scored a goal or they have not. Others are more subjective – a player to have a shot, shot on target, to make a tackle and so on. These require an element of judgement and where a bettor might be relying on a specific player-level event to go their way, whether that shot was intended by the player or not has a totally different meaning for that bettor, who might not care at all about the result, team or the league.

This brings a very different sort of challenge for regulators and it comes in at least two places. The first is the already naturally adversarial relationship between the operator and the consumer now has a debate about the judgement made by a data provider if they think that decision was wrong. This is complex and emotive and plays to a sense of right and wrong for people and it is by no means easy.

The second element comes from what data providers tell you when you ask them what they think the next big development will be. The answer I keep getting is hyper-personalisation. Serving up options, products, games, markets which the operator knows will likely be of much greater appeal to the consumer. That huge array of choices I showed you in that video can be bewildering, but what if you were served exactly what you like to see? What if you could watch an event and be given options on the sorts of things you like to bet on? The next corner, the next card, a player to be carded?

We can probably easily understand why that would be appealing to consumers and also the industry. It is ultimately what all industries do – provide you with suggestions of things they think you will like so you buy something when you had not been thinking about it. Amazon is always telling me it thinks I need a new something or other. The trouble there is my whole family use the same account so yesterday the Amazon app suggested it was time for me to buy some collagen face masks. I do not think that was for me, but then again, with facial recognition on our smart phones, perhaps Amazon is trying to help me make the best of myself.

But how is the Commission tackling illegal online gambling. As I said earlier, John Pierce will be addressing this in detail later in the week. I recommend you attend that session and so won’t go into detail now. But it’s worth stating, it is in everyone’s interest that we all look to make progress on this one. I think we should all acknowledge, however, that illegal gambling is not a straight-forward issue. There are plenty of people looking for binary answers about why people use the illegal market and the reality is for some consumers it’s a free choice they have made. Whether it is because they have self-excluded themselves, they have been turned away from the legitimate industry for some reason, they want to evade legal requirements or they simply like what they find in the illegal market, we have a challenge to meet in attacking the illegal market’s ability to operate at scale. And over the last couple of years at the Commission we have increased the resources we dedicate to tackling it.

But we have also looked to go further than just using our own powers, collaborating with other regulators, with operators but also with payment providers, internet search providers and all parts of the supply chain to frustrate illegal operators from being able to operate at scale.

And it is showing results:

Since the start of April this year, the Team has issued over 750 cease and desist, and disruption notices - this includes 259 cease-and-desists issued to operators and 189 to advertisers.  

Over that same period the Commission has referred over 78,000 URLs to Google with 50,000 of these removed by the search engine, and 221 websites taken down. This is more than a tenfold increase in URL takedowns in comparison to the whole of 2023-2024.

I am not going to claim for a moment that we have cracked this – far from it. We have made some very good progress but there is still much more we will do. It is also worth acknowledging that the risk and threat of an illegal market cannot be a justification for lower or falling standards in a legitimate market.

Through innovation and the careful use of limited and specific data, operators in the British market have taken a step forward in drastically reducing the risks of extreme harms for their consumers. The new product is called GamProtect and the Commission has been involved throughout.

We initially launched the ‘challenge’ that led to it back in early 2020, at an event with over a hundred people from across the industry and wider sector, looking at how to close the gap in knowledge operators have about vulnerable consumers.

As I am sure is familiar to you too, operators often tell us that they are hamstrung by not having sight of levels of risk to consumers outside of their own business. GamProtect can help fill that blind spot. Where an operator has closed a customer’s account after identifying a customer that has self-declared a very serious marker of health related gambling harm, the system allows for that operator to share that decision by a flag through the system with other participating operators.

In this way allowing other operators to take the same action to protect that consumer. And it does it with very limited data that the consumer has already self-declared.

The whole product was set up and developed with the oversight of the UK’s data regulator, to make sure it was compliant with data protection laws and regulations. It is early days but GamProtect has already identified over 5,500 consumers, helping protect them from risk and serious harm.

The gambling industry in Great Britain and the trade body who coordinated its development, the Betting & Gaming Council (BGC), deserve credit for this innovative and ground breaking product. A product that is solely designed to help protect the most vulnerable from serious harms. And at the Gambling Commission we are now encouraging more operators to sign up to GamProtect in order to get as much of the British online market covered as quickly as possible.

All this work of course are good examples of what we all need to do more of: using data and collaboration to help drive innovation.

But what else is going on in Great Britain since we last met a year ago? We of course had the small matter of a General Election which saw a change of Government in the UK. This may be of interest to you for a couple of reasons. Firstly, we have made significant progress on the implementation of the 2023 Gambling Act Review White Paper – the document that outlined the proposals to strengthen gambling regulation in Great Britain. This includes starting a pilot for Financial Risk Checks in August this year, in itself an innovative response to help tackle the risks of gambling harms for consumers.

Whilst our work has not stopped throughout the General Election period and more recently, we are engaging with the new Government on how they wish to take forward other areas of the White Paper.

The other element of the General Election you may have picked up on was what it meant in terms of betting integrity. Of course, whenever there is a question over betting integrity it is right that we as the gambling regulator in Great Britain investigate. I am sure the same would be true for many of you. Whilst I am not going to comment on that specific issue further, it does highlight another area where we at the Commission are fortunate to work with many of you – betting integrity.

Sports betting integrity in particular is an international issue. Gambling on sporting events can often present challenges when unusual and suspicious betting activity is observed. You could have an event in one country that generates unusual and suspicious betting activity on a completely different continent and therefore the need to collaborate and share expertise and information is integral to the fight against corruption related to betting.

Our own Sports Betting Intelligence Unit (SBIU) was set up in 2010 and is the operational arm of the UK National Platform for addressing the manipulation of competitions. And I think the work of our SBIU is a strong example of regulation that works for all. We worked closely with the Council of Europe on the Macolin Convention and we have been at the forefront of collaborative betting integrity initiatives throughout this period. And we continue to actively contribute to the Council of Europe Group of Copenhagen (GoC) Advisory Group initiatives. The power of collaboration when it comes to sports betting integrity can’t be overestimated.

Just this year, major tournaments like Euro 2024 and the Paris Olympics have seen international collaboration via the Group of Copenhagen – as well as the Interpol Match Fixing Task Force - to keep those events honest and fair. It has helped members with knowledge gaps on the world of esports and through the Group, assistance and advice has been given other jurisdictions on establishing their own National Platforms, revision of legislation and on developing capacities in terms of intelligence and investigations. There is also a huge amount of collaborative work with the various sporting governing bodies, especially on making sure those major sporting events stay crime free and fair.

And of course all of this work is increasingly being supported by what the data is telling us. Earlier this year I was able to meet with some of the leading bodies that provide many of the statistics and data that so many sports fans these days enjoy to bet on. The wealth of data points available have of course created tempting opportunities for the types of event betting frauds that some criminal elements try to set up. But by using the data available we can also more quickly tackle these criminals before they can make an impact.

Once again collaboration and data driving innovation, leading to better outcomes.

The job of a gambling regulator is never easy. In this room, we all know that. So at the Gambling Commission, even if not in what we do, in terms of our approach we try and keep it simple. We look to do the right thing, even when it is hard. We look to put people first – that’s everyone impacted by gambling. And we look to deliver regulation that works for all.

I’ve talked through some examples of this approach today. But I think it’s no surprise that when we look at those examples and pretty much every other area we are trying to make strides, collaboration, data and innovation are what underline our successes.

Together, through our work here with IAGR and beyond, we can all benefit from an approach based on increased collaboration and better use of data to drive innovation. I look forward to continuing to work with all of you on that and I look forward to your questions.

Thank you.

https://www.gamblingcommission.gov.uk/news/article/iagr-2024-conference-keynote-andrew-rhodes-speech

Last updated: 21 October 2024