Another day, another critical report – House of Commons select committee throws fuel on the fire

Hot on the heels of the APPG’s report last week and only a few months after National Audit Office’s highly critical report, the Committee of Public Accounts of the House of Commons (the “Committee”) published, yesterday, the latest political onslaught against the gambling sector. The Committee has a broad remit to “scrutinise the value for money (the economy, efficiency and effectiveness) of public spending and to generally hold the Government and its Civil Servants to account for the delivery of public services”.

During April 2020, the Committee heard oral evidence from Sarah Healey, Permanent Secretary at DCMS and Neil McArthur, Chief Executive of the Gambling Commission.  It also received written evidence submissions from a number of interested parties, largely made up of public health experts, individual players who had experienced gambling related harm, the (customarily anonymous) representatives of “expert by experience” groups and certain trade bodies.

The Committee sets out its stall in the second paragraph of the report, which states “The Department for Digital, Culture, Media and Sport and the Gambling Commission have failed to adequately protect consumers at a time of considerable change in the sector, as gambling increasingly moves online and new games become more popular”.

This gives a clear indication of the tone of the rest of the report and of its central conclusions.

The report will make grim reading for the Gambling Commission and for DCMS, who have been described as having an “unacceptably weak understanding of the impact of gambling harms and lack measurable targets for reducing them”.

For those who have an interest in the legislative background to the regulation of gambling, the conclusion drawn by the Committee that DCMS and the Gambling Commission have “failed to adequately protect consumers”, dovetails particularly with the statutory duty imposed on the Gambling Commission by s22 of the Gambling Act to “pursue the licensing objectives”, themselves enshrined in Section 1 of the Gambling Act 2005.  There are three licensing objectives, one being the protection of children and vulnerable persons.

We know there is a review of gambling legislation coming in this Parliament, but with such an influential Committee of the House of Commons concluding that the statutory duties bestowed upon the Gambling Commission are, in the views of the Committee, being unfulfilled, it is hardly surprising that there is a demand within the report for an acceleration in the proposed review of the Gambling Act which, with a call for a timetable for such a review to be published within the next three months.

Particularly startling for the industry will be the call by the Committee for the publication of “league tables of gambling operators” behaviour toward their customers, naming and shaming poor performers”.  How this would actually work in practice and how “behaviour towards their customers” will actually be measured remains to be seen.

Using their own words, we set out below the Committee’s conclusions, being: –

  • The Commission should develop a plan for how it will be more proactive in influencing the industry to treat consumers better, including using reputational tools such as league tables indicating how well each operator treats its customers;
  •  The Commission should urgently investigate the impact of fixed odds betting that falls under “lottery” legislation and is accessible by 16 and 17-year-olds;
  • The Commission and the Department should urgently look at online fixed odds betting and report back to the Committee with how they intend to increase effectiveness of online harm reduction within three months;
  •  The Commission needs to “radically improve” the data and insight it collects to know what is going wrong for consumers and develop better information on its own performance: Within three months the Department and Commission should set out to the Committee what actions they will take to ensure they have the research and evidence base needed to better understand gambling problems, and to design an effective regulatory response;
  • The Department and Commission should work together to strengthen consumer rights assess the impact on consumers of gaps in redress arrangements and examine options for increasing statutory protections with an individual right of redress for breaches of the Social Responsibility Code of Practice.”

As if the mood music had not already made it abundantly clear that significant regulatory reform was on its way, the report from the Committee is another clear indication of the direction of travel.

We also know that the House of Lords will publish their findings from their assessment of gambling regulation on Thursday.  Any attendee to, or viewer or listener of, the House of Lords Committee proceedings will have been struck by the contrast in how they were run, when compared with those hearings undertaken by the APPG.  Whilst the APPG oversaw something of a bearpit at times, the Lords process was suitability more cordial. However, the Lords’ assessment understandably focussed on the same issues. Its report will allow us to gauge how the upper house of the legislature sees the attendant issues, which will then provide a holistic view of the pathway ahead for the industry.

The full Public Accounts Committee report can be read here.