May 22, 2017

It can sometimes feel like the gambling industry is being attacked on all fronts. Whilst the man in the street may have little sympathy towards the industry, those of us advising operators in the sector are somewhat bewildered at the pace of regulatory change that is being demanded by the Gambling Commission of Great Britain.

Attack on all fronts

The Commission is not alone – other regulators and agencies are also taking aim. Reports, investigations and adjudications have highlighted the industry’s tardiness in complying with data protection, advertising, consumer rights and money laundering obligations. Clear statements of intent from the Information Commissioner’s Office, the Advertising Standards Authority, the Competition and Markets Authority and, indeed, the Police indicate a systematic loss of patience. This all comes at a time when the Commission appears to be sharpening its claws and one wonders how the industry will cope with this regulatory revolution. The Commission has made it clear that the perceived plethora of industry shortcomings cannot continue and has threatened to act where operators fall short in the future.

Further market consolidation

The cost of compliance rises all the time and the complexity of regulatory obligations is forever increasing. It’s likely that such onerous obligations will become a significant barrier to new entrants to the market in the future. At a time where the industry is rapidly consolidating for an array of reasons, the overwhelming regulatory burden may be yet another reason for businesses to seek efficiencies through merger or acquisitions.

Fight or comply?

At the time of writing, we are yet to see a significant regulatory sanction metered out by the Commission against any particular holders of personal management licences. It feels like this is coming though as personal accountability has been promised recently by the Commission.

Where personal reputations and livelihoods are at stake, the industry is likely to fight, rather than roll over. At the time where the industry is being required to quicken the pace of its regulatory change, an aggressive regulator may be counter-productive and force operators to mask regulatory failures rather than openly admit them to the regulator, to seek remedies and then pursue education programs to impart their learnings to the wider industry.

We will wait to see how the industry responds to the new world order and whether the Commission’s adversarial approach fulfils its aims or whether it will be the litigators who have the most to gain, rather than just compliance professionals.