15 November 2024Speech by Andrew Rhodes
This speech was delivered by chief executive Andrew Rhodes at the CEO Briefing on 14 November 2024.
Please note: This is the speech as drafted and may slightly differ from the delivered version
Good morning everyone and thank you for joining us today.
And welcome first of all to those of you who haven’t attended one of these before. I am genuinely grateful for your time in attending too and whilst I know you will have different reasons amongst you for being here, I hope what I will manage to do today will be to set the scene for things we are focussed on right now and in the near future.
This is the only time of the year where so much of British facing gambling sector are represented at a senior level in one room with the regulator. Last year we had over 85 percent of the market by Gross Gambling Yield (GGY) in the room. This year we have another strong attendance which likely represents even more.
I have been CEO at the Gambling Commission for almost three and a half years now. The job has been entertaining, even if I have not been. One of the things I believe in is setting clear expectations for the road ahead, as much as I can, given not all things are in the gift or control of the Commission. At this event, I try to set out very clearly some areas of focus and I hope that gives the industry and its advisors a chance to think about and prepare for those things ahead of the regulator turning its focus in earnest to them. I felt I had done this last year, but I think I was wrong – there are things I flagged where I have seen very little movement at all, so I will be more direct and specific this year, or else I am not being helpful.
There is something curious about delivering a speech in this job, because the Commission publishes everything we say. There are things I am saying to you, in this room right now, for your attention, then there are people who read it later and take things from it and then there are those who also do that but apply their own filters and interpretations of what they think I meant. It does mean I spend quite a bit of time thinking about what I want to say and what I would like people to take away from that.
For the first time, we have also invited a number of people from the gambling legal profession today. In the spirit of knowing people often read into things that aren’t there, to be clear this isn’t one of those gatherings we’ve invited you to where we also suggest you bring a lawyer and if you didn’t have one, we have provided one for you. Instead, this is about us trying to speak to as wide an industry community as we sensibly can, so you can all hear things directly and alongside those in the same industry.
I will of course talk about the value we place on collaboration today. And as part of that I’m really pleased to welcome Sarah Fox and members of her team from the Department for Culture, Media and Sport (DCMS) again to this year’s event. But without a shared understanding and commitment to improve outcomes for consumers, further efforts at collaboration become more difficult.
Transparency is another important part of our work and something we embedded in our Corporate Strategy which we published in April. So I’ll be talking to you about our approach to that a little further and how we want further transparency for consumers as well. Innovation is another area where everyone in this room I’m sure wants a bit more focus on. So I’ll also be spending a little time discussing some of the important innovation we’ve seen this year, the impact its having and what more we want to see.
As always, and after the updates colleagues have for you, I’m looking forward to your questions as well.
I’ll start first with an update on how we see the sector today from a high-level regulatory perspective. We have seen significant change in the last few years in terms of overall compliance. In the past we often found an absence of policies being in place and, when they were, adherence to them was often poor and if interventions or interactions happened they were not necessarily meaningful. All things develop over time and we see a much-changed picture today. In our assessments now, we see far fewer examples of high-velocity spend with little or no interaction or the application of operator policy. Where we see issues, they are often different to those we saw in the past. Now, we are talking to operators about the speed of interaction taking place and how operators are applying that learning to their processes. Let’s be clear – this is a very different situation we find ourselves in.
As part of trying to build that more cooperative and collaborative approach, obviously in the last year as well we had the introduction of the voluntary code which was developed by the Betting & Gaming Council (BGC) but also in partnership with the Commission, which was a way of us trying to address some of the friction and issues that we know you experience in trying to ensure that consumers are best protected, but also consumers’ experience as you try and derive some of that information, and I'm hoping that the industry code that was developed has made a difference and is helping people both in the industry and consumers.
The slide on the screen shows some of the volatility we see in assessment outcomes and this is down to a number of reasons. Between April and June this year, 42 percent of those assessments came back with Good or Satisfactory results on consumer protection requirements. This leaves nearly 60 percent with either improvement required or significant failings. Recently we published the stats for July to September and here we see 75 percent Good or Satisfactory and 25 percent with significant failings.
The introduction of LCCP 3.4.3 to use its technical name, or customer interaction to speak slightly more plainly, means there are new requirements and operators are adapting to that. We have also been assessing in sectors, sub-sectors and operator tiers where we suspect there may be issues or where we at least want some assurance there are not. This does mean the proportion of operators with positive outcomes will change, but that does not mean the industry as a whole is oscillating up and down. If we separate out new requirements and look at the same operators and tiers then, overall, the pattern of compliance has continued to look positive. This is not universal though and I ought to sound a small note of caution. Any operator of any real size and scale now who does not have well-developed algorithms, policies, procedures, interactions and interventions in place is increasingly an outlier and this will become more obvious as the industry continues to make developments in this area. And one other note of caution that I will give is there's been a lot of mergers and acquisitions over the years, as there often is in large sectors, and we have seen that as those complicated tech stacks have grown, we've seen an increase in the number of issues with marketing failures where people have been marketed to that should not have been, they'd opted out or they were excluded, and we recognise that these are mistakes that are being made. It's not deliberate and that is reflected in the response that we've had to it, however these are the sorts of complicated issues that we are going to need to be better at resolving, because otherwise they leave the industry open to pretty significant criticism.
This is an industry that tends to be described homogenously by media and critics where all of you are sometimes judged based on the conduct of one. I’m not sure I have an answer for that and I’m also not sure it is one of the many problems I have to solve, but I do think it is a consideration for trade bodies and advisors perhaps.
This is the third time we have invited you to come together as a group of CEOs and senior leaders in the industry and I’d like to take you back to a slide I used the first time we met. The point I made in 2022 was that I felt we were focussed at that time on removing the extremes from our work – cases nobody wanted to see or justify and which damaged the industry. I said then I thought we would soon see the tops of those spikes reducing and we would enter a much more complicated phase of regulation, where we would instead be dealing with more nuanced and more complicated issues, with less obvious solutions. This is where I think we now are.
Before I come to that, however, given this is billed as a briefing I thought I would give some updates on some of our activity.
We will cover off some topics with you today, so thankfully for all of us it won’t just be me speaking and we’ll also have time for questions at the end. We’ll give you an update on the Gambling Act Review, as much as we can, and we’ll also have our Research and Statistics team here to take you through the Gambling Survey for Great Britain (GSGB) in more detail. The GSGB is a big step forward: 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. And the depth of information it provides is helping us push forward in a number of ways already.
I am of course well aware of some of the concerns you have on this front, so I think it’s sensible we take you through some of the work we’ve done and are doing. I do need us to accept some reality though. I’ve seen and read quite a bit about how we should stay with the Health Survey and how it is the ‘gold standard’. Let’s be clear – the Health Survey was the ‘gold standard’ and it worked well for a long time, but it had its flaws. It was conducted differently in each country of the UK and was relatively infrequent with limited questions about gambling. The authors of it were clear it likely underestimated the problem gambling level because of the methodological approach. The most recent 2023 survey could not be run because of this and the authors have already consulted on moving away from their approach because it’s no longer viable. So, when people quote older statistics or talk about how we should use that approach, we are actually talking about relying on something that no longer exists.
That is why it’s so important we take the widest evidence base we can and we continue to improve our approach as much as we possibly can. In the GSGB we have the ability to do that, but the team will talk to you more about that later.
I have set out to you before how I want the practical working relationship to be easier and simplified, to make it easier and more straight-forward to find what you need and for us to build onto that a more proactive two-way relationship where it is needed.
The Commission, many of you will recall, has been talking about developing an ‘account management’ framework since 2022. But following feedback and discussions with a working group of operators that we set up about a year ago, we quickly realised that whilst there is a role for some more traditional account management, what was needed here was something a little different.
The Gambling Commission is committed to improving how we engage with industry, and as a result we have introduced several activities which will support our engagement with you, both proactively and reactively. On the reactive side, we have run a Pilot this year that I will discuss further in a moment. But we also want to do more proactively. So we are continuing to explore a role for some proactive account management in certain instances. It’s worth remembering the Commission is not a massive organisation and it wouldn’t be feasible to build regular two-way relationships across over 2,000 licenced operators. We are looking to provide opportunities for two-way operational collaboration, and to build trusted relationships both between the Commission and all of you and also, between operators at that more operational level.
So in September we held the first Operator Engagement Forum. We had around a hundred different operators and trade bodies represented there for a day of workshops, updates and debate. I think those who attended felt it was a really positive day – I know that’s true of my team who were there – and we already have a date in for the next one in April next year.
But back to the feedback from the working group. The clearest feedback was that we needed to go further than just points of contact and that we all benefited from a quicker turnaround on your queries. You were also clear with us that quick access to the Commission team was important.
Focussing on this feedback and following further discussions with the working group, we have run a Pilot this year, to test how to make this side of Relationship Management work. We started small in February, with just 8 operators. We opted to set up a dedicated phone number and email address for queries that would be managed by experienced colleagues. We also committed to reasonable response timescales for these contact points. None of this is rocket science maybe and it of course works hand in hand with the other ways operators have to contact the Commission. But we needed to test the approach. Since then we have continued to scale up the Pilot, to the point that when at the end of October it finished, we had 500 operators in the Pilot – 22 percent of our active licence population – all with quick access to Commission experts for direct support with technical queries or just wanting to talk an issue through.
With the end of the Pilot, we are now going to take some time to review if this service is the solution that best serves the needs of licensees and is achievable on a permanent basis at the same time. But I think it’s fair to say the reaction from operators involved – including many of you in the room today, has been encouraging:
This has been backed up by positive feedback direct from those who have used the service. At the Commission we’ve been speaking about how we want a better, more constructive relationship with all of you for some time. The Relationship Management approach we’ve developed with you this last year is our latest effort to embed that constructive way of working at every level of our work. As I said, we will now take some time to review the outcomes of the Pilot but we’re confident we’re on the right track.
I said at this event last year I was concerned that consumers were not having a clear explanation of why they were being asked for information or why they had been prevented from gambling or their stakes had been limited. My concern is all too often I see the phrase ‘regulatory requirements’ quoted when it is actually about terms and conditions or operators seeking to protect themselves against potential fraud or abuse of terms. The industry has a right to shield itself from such things, but I was disappointed not to see movement in the last year towards a clearer position for consumers. I obviously understand the issues of tipping off where money laundering or fraud is suspected, but not all cases are about money laundering or fraud.
Transparency is another area we committed to doing more on in our Corporate Strategy. This really splits into two broad areas – transparency about the industry, compliance and so on and then transparency to consumers about their own position and why things are happening. Some of you may be aware that we’ve already started publishing additional information to back this up through our impact metrics, which is an area the Board is especially keen on. The purpose of this is to put ourselves under pressure to improve and perform against our Strategy and our Licencing Objectives. At the same time it should also give clear information about the picture we see, which we expect will help operators focus on these issues too. We can’t be demanding more transparency for consumers from all of you when we’re not willing to push ourselves to do so as well. What’s more, we’re committed to publishing more information on these metrics, as well as our performance. I think this has been a gap for us and one I intend to close.
The Commission has engaged with a very large number of consumers as part of our research programmes – over 40,000, who are not consumers experiencing harm but will be across the spectrum of consumers who gamble in one way or another.
I am conscious of the range of people who pour over every set of remarks I deliver and find points they wish to dispute or imply have some meaning when they don’t. On that basis, I need to be clear I don’t think it is for the regulator to drive up ‘happiness’ with service or a gambling experience for commercial reasons, but I do think we have a role in understanding what works well and what doesn’t, in line with our statutory objectives, which typically relate to our objective on gambling being Fair and Open.
When we look at trust, for example, we find almost half of respondents who had gambled in the 12 months leading up to last December neither agreed nor disagreed that gambling in this country is conducted fairly and can be trusted. 21.5 percent did agree it could be trusted and 30.6 percent didn’t. Not great. But when we look at what people told us when asked how happy or unhappy they were with the way gambling businesses had treated them in March this year:
Four times more people were happy than unhappy with most people not having an opinion. Some people will always have a moral stance on gambling, for or against. There is no changing that. But what we’re already seeing is the picture for most people is more varied and more textured than what is sometimes said.
One final point on our own efforts to be more transparent. The depth of information we’re getting on this and the frequency that we can report on these measures is only possible because of the Gambling Survey for Great Britain. We’re only scratching the surface on what’s possible with this new data so far and I’m sure that is true for others also.
Everyone in this room today knows that there are plenty of legitimate reasons why accounts may be closed or restricted by operators. But at the Commission we also expect operators to be transparent with their customers on the reasons additional information is requested or accounts are restricted or closed.
And the biggest source of frustration we hear about from consumers in this space is on withdrawals. It’s still the most frequent raised by consumers with us and is a large driver of traffic towards the Alternative Dispute Resolution services as well. And we know, that for many of you, you have strong processes in place to turn withdrawals around quickly. Data provided to the Commission by some of the largest gambling companies shows that those firms approve, process and fulfil around 99 percent of customer withdrawal requests within 24 to 48 hours of the request being made. That is really positive.
There is, however, quite a dominant narrative forming which is that winning sports bettors are quickly limited or accounts closed and withdrawals frustrated. I have observed numerous social media storms where there has been a feeding frenzy about a case where an individual claims they have been treated unfairly. A whole group of people will be commenting extensively on this and drawing all kinds of conclusions, often including the need for a licence to be suspended or revoked.
I have personally followed up on many of these cases and they rarely ever present the picture claimed on social media. We have found the use of forged documents, multiple accounts, changing financial information and inconsistent stories. The cases we have looked at, where people have vociferously claimed they are the victims of abuse of process, often do not actually represent the things individuals claim they do. Some of these cases may even be examples of fraud by misrepresentation.
However, we do also see an increased pattern of concerns and complaints about the fairness of gambling and whether winning sports betting consumers in particular are tolerated within the industry.
I know you will have some strong views on this and several of you have quoted figures to me in the past. However, I am genuinely concerned at the consistent narrative that certain consumers are being frustrated or turned away. In the UK, there are very few examples of companies who are obliged to provide a service and cannot decline custom if they want to. I have a concern about what other issues this may be causing elsewhere, which I will come to shortly, so rather than people make assumptions, suppositions or anything else, it’s important we actually gather the evidence. That said, it seems pretty clear that where criminality is not a genuine concern, communication to consumers is often poor and sometimes misleading and it is leading to unnecessary complaints and frustration.
I said last year we would want to understand more about accounts being restricted, so in the very near future we will be asking you for data on account restrictions and the reasons. We want to understand what the actual reality is for accounts being factored, restricted, closed, put onto zero stakes and other similar things. We cannot continue to be surrounded by a debate where it is not clear what the true picture is.
With account withdrawals being the top complaint, we will also want to understand more about what is happening in that 1 percent of accounts where withdrawals are delayed.
We know there are a range of issues in this, which can be from suspected abuse of terms and conditions, Anti-Money Laundering (AML) concerns, changed financial information and a host of other things. Nonetheless, we need to build a more complete picture of this area, so you may well have already had that data request from us.
We have been dedicating resources into areas we have been less able to focus on in the past. I have spoken to you before about the investment we have made in tackling illegal gambling and will come to this again, but we have also been recruiting people into our Compliance team to focus specifically on the statutory Fair and Open objective we have. Those people have already been focussed on a review of the terms and conditions of all band 3 to 5 operators and bands 1 and 2 will be next.
The last year then has seen successes as well as showing there is still more to do. That’s true of industry compliance. It’s true in how we want to improve our communication with you. And it’s true when we look at our efforts to improve our data and improve transparency.
What’s also true though is the last year has also seen some real success through innovation and collaboration and I want to finish today by highlighting just a couple of them for you now.
First one that many of you in this room today deserve credit for and that is the development and launch of GamProtect. Through innovation and the careful use of limited and specific data, a group of operators, led by the BGC have taken a step forward in drastically reducing the risks of extreme harms for their consumers. GamProtect was fully launched in September 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.
It was back in 2020 that we initially launched the ‘challenge’ that led to GamProtect, with an event that brought the sector together to look at how to close the gap in knowledge operators have about vulnerable consumers.
Operators had no awareness of the risk a consumer may be facing beyond what that operator could see in 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. And to be clear, the Information Commissioner's Office (ICO) provided support in the development of GamProtect to make sure it is fully compliant with data protection. No consumer's data is at risk and it can only be used to protect them.
It is early days but GamProtect has already identified over 6,000 consumers, helping protect them from risk and serious harm. Those of you already involved and the 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.
The topic of illegal gambling is a major one here and internationally, though the nature of the challenge can vary considerably between countries and jurisdictions. Let’s also not pretend illegal gambling is an entirely recent phenomenon – it isn’t. In some countries, the legitimate licenced industry is taking over from the illegal market, which was previously the only means of gambling, or was the only place you could gamble outside a fairly small number of establishments. In this country, there has always been an illegal presence, but awareness and the nature of the challenge has changed.
The topic has also been a political football in recent years and at times the discussion about illegal gambling has been quite reductive and unhelpful. It is also another place where we see quite absolutist views where people are cited as deniers or exaggerators. The reality is more complicated and it would be, wouldn’t it? – it's wrapped up in human behaviour.
A lot of focus has been on different groups trying to estimate the size of the market and then what they think that should mean. Estimating how big the illegal market is will be important, but knowing how big it is doesn’t tell us much about why people use it and that’s what a larger part of our focus is.
We set out in May of last year a series of evidence gaps and priorities – one of those was concerned with illegal gambling and we recently published our methodological approach to estimating the illegal market. We believe from our research so far the illegal market is populated by several cohorts of consumers and we’re trying to build a more granular picture of this in the coming months.
These are not in order of size and part of what we are trying to do is to estimate this. The first cohort is perhaps the most obvious – the self-excluded. It is not an accident that ‘not on Gamstop’ is how many illegal sites promote themselves. These are consumers who have tried to take positive steps, disengaging from gambling because they have a problem and are making use of the tools that are there. However, they will also be vulnerable and the illegal market knows that and deliberately targets them.
Another cohort are those who frankly like what the illegal market offers – they have made a conscious choice. They can find what they think are attractive offers and often feel they find the same games. Of course, social media and even correspondence with us is littered with complaints about people being unable to withdraw winnings and so on. When we talk about the illegal market not having the safeguards the legitimate market does, we don’t just mean safer gambling – consumers have no idea how safe their money will be, whether they will get any winnings out or where their financial information or anything else might be shared and exploited.
A further group are those who have been displaced and are typically sports bettors, who have found themselves unable to gamble in the legitimate market because their custom is not wanted. This is one of the further reasons we want to understand account restrictions and frustrated withdrawals – we don’t accurately know the size of that.
There is then a final cohort which is a mixture of those who have ended up in the illegal market without knowing it – and our research also indicates there are people who think they have been using the illegal market when they have not, based on the sites they named, and those who have used it to avoid checks in the legitimate market. There will be a range of other people too who will use the illegal market for a variety of reasons, including because of cryptocurrency.
I realise I have spoken mainly about online illegal gambling so far, but we have been engaged in a number of operations with police forces to address land-based illegal gambling. One operation involved 70 officers from one police force and led to several arrests and follow-up raids and action. We have several live criminal investigations which have included arrests being made as part of other operations we have underway at the moment.
Land-based illegal gambling is something that can take longer for us to disrupt as we need the support of police forces to effect entry and to make arrests and we know illegal gambling is often associated with other criminality, so the Commission cannot act alone in this regard, nor should we.
Since the start of April this year, the Team has issued over 770 cease and desist, and disruption notices - this includes 262 cease-and-desists issued to operators and 205 to advertisers.
Over that same period the Commission has referred over 102,000 URLs to Google with 64,000 of these removed by the search engine, and 264 websites taken down. This is more than a tenfold increase in URL takedowns in comparison to the whole of 2023 to 2024.
I’m not telling you of course that there isn’t plenty more for us to do here. Far from it. We’ve made a strong start with this approach and we intend to do more. And due to the constant evolution of the threat, we will continually need to innovate too.
I said to you last year that I wanted to encourage you to use your commercial influence with any partner or supplier you have to ensure they were taking all the relevant steps to verify they were not supporting illegal activity facing into GB. I’m going to go one step further than that today and strongly suggest you all undertake due diligence to ensure none of your suppliers are directly or indirectly engaged in supporting unlicensed activity in this market. The Commission’s strategy on combatting illegal gambling is to cause as much up-stream disruption as we can, which is why we have focussed on ISPs, payment providers, search engines, software suppliers and more.
And that’s ultimately what we want to see in the year to come as well. Yes, there will be more work implementing the Gambling Act Review for us all to do. We will continue to raise standards and no doubt there will be times when we need to take action where we see failings. But we also want to keep driving forward with you. Towards better compliance, better communication and better transparency.
Thank you for joining us today. I’m looking forward to your questions and more conversations later on.
https://www.gamblingcommission.gov.uk/news/article/ceo-briefing-2024-andrew-rhodes-speech