25 March 2021

Sensible reform of gambling regulation? Don’t bet on it

By Andrew Bridgen

Parliament has been engaged in a voracious and sometimes volatile debate concerning the review of the Gambling Act. 

However, in light of the not-so-surprising yet deeply concerning collapse of Football Index last week, perhaps it’s time to consider a wholesale review of the failing quango at the heart of this mess, especially before it is handed more powers that clearly cannot be wielded fairly or effectively. Those powers it is asking for include setting up a national register of gamblers together with an ‘affordability test’ to limit the amount people can spend on gambling each month.

Of course, I’m talking about the Gambling Commission, which had taken its eye off the ball long before last week’s own goal cost its CEO Neil McArthur his job, and Football Index’s youthful customers £90m in ‘shares’.  

While this ponzi-style scheme grew at an alarming rate, the industry regulator distracted itself with arbitrary, intrusive and difficult to enforce affordability checks; targeting bookmakers that admittedly pose concern – largely through unsavoury advertising – but can at least point to secure business models and a modicum of self-regulation.  

And the Football Index debacle is just the tip of the iceberg. The Gambling Commission’s reactive approach to regulation has prevented a crackdown on the insidious rise of ‘loot boxes’, which has created a ticking time bomb for problem gambling behaviour in Generation Z, whose life opportunities have already been severely hampered by the pandemic. Without strong action now, the corrosive effects of these in-game gambling products will be felt for many years to come. 

These issues have been admirably raised by influential campaigners on all sides of the gambling debate and well covered by the media, but Neil McArthur’s resignation demands deeper scrutiny – where else did the Gambling Commission fall asleep at the wheel? 

Coincidentally and coinciding with McArthur’s resignation, a press release was issued by Team GB announcing a corporate sponsorship by Camelot, the operator of The National Lottery. It’s a welcome cash injection for athletes who have faced unprecedented uncertainty over the past twelve months, but the announcement blurred the lines between Camelot’s corporate identity and The National Lottery brand, underlining the Gambling Commission’s ineffectiveness as a regulator. 

It’s difficult to blame Team GB for their failure to distinguish Camelot, a holding company owned by the Canadian Ontario Teachers’ Pension Plan, from The National Lottery. After all, the lottery has only ever known one master – across 26 years and three licence competitions, the Gambling Commission failed to attract robust competition for The National Lottery licence. At this point, it may as well be state-run.  

And now, with the Fourth Licence Competition underway, the Gambling Commission is allowing Camelot to dissuade potential challengers by spending huge sums on partnerships and advertising – including ITV’s flagship Saturday night programmes – that otherwise could have gone to good causes.  

This is deeply concerning. Like any industry, a lack of competition breeds complacency and stifles innovation. Since Camelot were awarded their third licence in 2009, profits for Canadian teachers have far outpaced returns to good causes, with the Public Accounts Committee concluding in 2018 that Camelot’s 122% profit growth, compared to a measly 2% rise in good causes, was “well in excess” of what was expected by its original licence. 

The Gambling Commission’s disproportionate focus on bookmakers and betting, their hounding of 97% of gamblers who enjoy betting, a failure to regulate new gambling products like Football Index and loot boxes, and the decline of The National Lottery on their watch are just a few examples of a regulator with a long track record of failure. 

With the arrival of a new Gambling Act and the long-term health of the betting and gambling industry and The National Lottery on the table – can we trust The Gambling Commission to set the record straight? 

Don’t bet on it.

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Andrew Bridgen is MP for North West Leicestershire.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.