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Avoiding Turbulence

The UK is now halfway through a consultation process regarding the current UK Gambling regulation and legislation, in other words a review of the 2005 Gambling Act. This process gives all stakeholders an opportunity to not only answer a wide range of questions directed at both the online and land based sectors but to also comment in more general or more specific ways regarding the UK gambling sector as a whole and to identify and to comment with more granularity areas of the industry that do not appear to be covered in the 40+ questions laid out in the consultation document.

So that is the backdrop against which the industry and the regulator are currently dancing. The 2005 Gambling Act was implemented in 2007 which is, I should have thought, a relatively short time to have elapsed (13 years) before conducting a root and branch review. Prior to the 2005 Gambling Act we were regulated by the 1968 Gaming Act (37 years).

In my view the main thrust of the current Review is really to address concerns about the current ‘unlimited’ stakes and prize structure for online slots that are available from UK licensed online operators. It may well be presented as a general review and the wider industry be encouraged to spend hundreds of hours preparing requests for various nuanced adjustments to the current regulatory framework but the ‘Elephant in the Room’ must be concern about online stakes and prizes. I do not believe that we need a paradigm shift.

This review is particularly surprising given the fact that when the 2005 Gambling Act was passed the then Secretary of State (the late Baroness Jowell) informed us that any aspect of the act could be adjusted at the stroke of a pen and that was what would provide the regulatory steel backbone (my words not hers) for the 2005 Act and which would mean that there would be no need for further lengthy and expensive reviews or even wholesale change. It was recognised that technology was moving so fast, and the gaming industry was so creative that the ability to regulate swiftly was of paramount importance. But it seems that that is either not actually the case or the current regulator and the DCMS do not feel sufficiently confident to address the changes (that some believe are necessary) without this formal review. How odd.

But let’s take a step back, because I think that the most important thing that we can all ask for (or demand) of this review, and the panacea to many of these concerns is the reintroduction of the Triennial review of stakes and prizes, aka ‘The Triennial’ and we all need to make a cogent argument for this reinstatement. It is a matter of fact that in about 2003 it was decided to put to one side the Triennial review process that had been in place for well over thirty years and which had largely served stakeholders well. At the time we were disappointed that this was deemed necessary but the whole situation in the run up to the passing of the Act (and it only really crept through as part of the ‘wash up’ of draft legislation prior to the 2005 general election) was so fractious with the looming prospect of ‘Super Casinos’ appearing in every major city in the UK that having no Triennial review for a while seemed to be the least of our worries and not worth objecting to.

The 2005 Gambling Act was introduced in 2007 and everyone then expected the Triennial process to be reinstated but instead successive Gambling Commission CEOs have steadfastly refused to countenance this and have instead batted away enquiries by saying that they have the ability to regulate, or reregulate whenever they like. I imagine that successive Gambling Ministers have bought into this idea as it does offer a great opportunity to avoid doing anything (in the words of Sir Humphrey) ‘courageous’. Of course, reverting back to my original point, if they had indeed been courageous and had decided to use the legislation as Tessa Jowell suggested, they might have addressed the thorny issue of online stakes and prizes some time ago…

So why do we need the reintroduction of a Triennial Review? For over thirty years the Triennial process worked well for both the regulator and the industry. It brought order to regulation and to the review of products, stakes and prizes. It was a simple process that all stakeholders understood. The actual process involved a six month consultation followed by decisions from Ministers and the Regulator as to what changes, if any, were required for the next three years. Once submissions were considered and a pronouncement was made, then the industry had (in general terms) year one in which to interpret the new regulations, design, sell and introduce new products, a second year or so in which to sell and to operate these products at optimum levels before in year three they commenced the run in again towards new submissions. A process of anything less than three years would have been too rushed and anything over three years would remove the opportunity for industry to keep pace with RPI (in terms of stakes), advances in technology, and to ensure that customers did not start to feel that products were becoming stale. Gambling businesses are the same as any other retailer, whilst you have a bedrock of products that customers love (e.g. Roulette, Bingo or the ubiquitous Bar X slot) you also need a selection of other games and products for customers to choose from.

Whilst the decision to set aside the Triennial pre 2005 was understandable (so as not to cloud the debate at that time over significant changes to UK gambling regulation), the law of unintended consequences can be applied to what has come since, a disjointed and at times unintelligible series of ‘tweaks’ to regulation.

It is a bit like flying an aircraft, you need small control inputs to gently adjust your heading and altitude, if instead you throw the controls around in a heavy handed way then at best your passengers are reaching for the sick bag and at worst you find yourself in a fatal nosedive. The whole UK industry desperately needs a swift return to a sensible cycle of regulatory review, to avoid turbulence, a Triennial review.

Nick Harding

March ‘21

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