The UK Gambling Act 2005 — Fit for Purpose? By Andrew Tottenham, Managing Director, Tottenham & Co January 15, 2020 at 2:45 am The UK Gambling Act 2005 has come under a lot of fire recently from politicians of all persuasions, as well as the UK press, which is not known for its restraint or reliance on facts. Opponents of gambling argue that the 2005 Gambling Act is too lenient, did not foresee the application of new technology and is therefore not fit for purpose and the UK Gambling Commission (UKGC) has not been diligent in regulating the industry. In fact, they say that the Act has rendered the UKGC “toothless”. One of the arguments in support of this supposition is that the gambling industry has been allowed to advertise extensively without any control, and even with a voluntary code, the control of gambling advertisements needs to be put on a legislative footing. This criticism comes on the back of a year of record fines from the UKGC for: inadequate AML processes or having suitable processes, but not implementing them properly; and allowing excluded people to continue to gamble or continuing to send them marketing materials. Also, the reduction in stake limit on FOBTs due to a high-profile media campaign and despite the fact that the original £100 bet limit did not lead to a “nation of gambling addicts”, the headline rates of “at risk” and “problem” gamblers have not increased over the years, but remained fairly constant. However, it is a fair criticism that we do not know how that measurement relates to harm. Is the “quantity” (if that is the right word) of harm the same? Or has it increased or decreased? Guardian Journalist Greg Wood typifies the laziness of most journalists. In a recent article, he wrote, “‘Gamblification’ of football must be dealt with properly in the next betting Act. As a result, the most sensible way to approach it is a legalised regime, but also one in which protecting vulnerable gamblers is a key priority.” Has he not read the Act? He certainly hasn`t read Page 1, The Licensing Objectives. The third objective, and there are only three, is “protecting children and other vulnerable persons from being harmed or exploited by gambling”. In the last few weeks, the industry is in the gun sights again for allowing customers to use credit cards to obtain funds for online gambling. Articles in the press and repeated by the political classes say that it should be curtailed, because it has led to people gambling too heavily and getting into trouble, some significantly so. Last year, the Guardian reported on the case of a customer who used nine credit cards with online casinos and lost £54,000 in an overnight spree. It doesn’t say if she used nine cards or that she lost it all with one operator. This is the difficulty with online gambling: There is not a central bureau where you can enquire about the amount of credit that a single customer has used for gambling. Land-based casinos tend to use Central Credit or similar services to check if customers have used any of their credit line or in countries where credit for gambling is illegal, the total value of cheques they have recently presented, the value outstanding and whether any remain unpaid. In the high-end casinos in London, there is an informal agreement to stop customers using their limit at multiple casinos. The cash desk will call around to other casinos in the area to find out this information directly. The Gambling Act 2005 as passed was supposed to be “future proofed”, so what went wrong, if anything? Is the Act not fit for purpose? Has the change in technology made it irrelevant? The Act does pretty well with technology, because not much has really changed since it was passed. The only real change is the ubiquity of smartphones and in the early 2000s, it was pretty clear where things were heading in this regard. I would argue it is not technology that has changed, but public perception, or more correctly the view held by those in the mainstream media and by the politicians. In the UK, most Acts of Parliament allow for changes to be made to rules or regulations or details to be added at a later date, using a Statutory Instruments or SI. An SI is a delegated power which gives Ministers the power to make these changes. Often, Acts of Parliament contain only a broad framework and SIs are used to provide additional detail that might be too complex to include in the body of an Act. For elements of an Act that are believed to be too important or contentious, usually the Act will define them; then there is a procedure where the SI is presented to both Houses of Parliament and a vote is held to approve the SI. But no questions are asked, nor is it debated; this is called an Affirmative process. The Gambling Act 2005 does contain a provision where the Minister may change any regulation or rule, except for certain areas and in these cases, the Minister would need to use the Affirmative procedure described above. The UKGC has the power to change regulations, license conditions and codes of practise. If we look at the past two years and the criticisms levelled at the industry, the regulator and the Act itself, would any of these justify the wholesale “root-and-branch” reform being demanded today? The UKGC has been quite successful in extracting large fines from operators for failures in AML processes and in the duty of care for their customers — allowing them to gamble with and lose large amounts of money they do not have. I do not see these fines as a failure of the Act. In fact, it is a strength of the legislation that this happens. I might argue with the extra-judicial nature of the process, but I am hugely in favour of fines for wrongdoing. The UKGC has rightly responded by tightening up the licensing conditions and codes of practice for both AML and duty of care. I do expect to see proposals for regulations about affordability checks in the near future, once they figure out how this might be achieved. Bookmakers were castigated for having FOBTs that allowed people to bet £100 per spin on a virtual roulette game. The solution was to reduce the maximum bet on these types of gaming machine to £2. Due to pressure from UK Treasury, this almost didn’t happen, but in the end the Government of the day was forced to make the change when sufficient members of the Government’s own party were prepared to amend another unrelated Bill and to vote it through. How did the Government effect the change? It used a Statutory Instrument, titled the Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018, by way of an Affirmative procedure. Online gambling companies came under fire for too much advertising around sports events. This has led to a voluntary arrangement not to advertise during these events, although now the criticism is that some online gambling companies will stream live Premier League games to customers who have a funded account. I am not sure what there is to criticise about this, but the industry has agreed to desist from here on in. There are codes or practise for advertising, and these are easily changed, although I can see that some might want to strengthen the offence of a breach of these codes, as a breach is currently not of itself a criminal or civil offence. Apart from making it a criminal or civil offence, the Act does allow the Minister to introduce changes to advertising regulations with the use of an SI. Online gambling operators have been blasted for their VIP programs; it is alleged that these schemes entice people to gamble more and are disproportionately populated by problem gamblers. The UKGC already has the power to make the changes necessary to stop bad practice. The Gambling Act 2005 specifically allows the use of credit cards for online gambling. For casinos and bingo halls, they are prohibited, and though these venues can have ATMs, the ATMs cannot accept credit cards. This is perhaps one area where a change to the Act using primary legislation may be of value. But this presents the industry with a huge risk. Whatever primary legislation is promulgated, there is a danger that it will be a knee-jerk reaction to the bad press and will go too far in the opposite direction. In addition, due to mission creep, the legislation might include all sorts of nasties, covering areas other than the use of credit cards for gambling online, and could impose an enormous burden on the industry. Acts of Parliament are notoriously difficult to change and those concerning gambling even more so. There was very little change to the 1968 Gaming Act despite two Government Commissions, along with Parliamentary Committees, making recommendations that change was urgently required. It took 37 years before the 1968 Act was repealed and a new law about gambling was enacted. And so it would appear that there is no real need to change the Act with root-and-branch reform but to use the tools that were written into the Act, changes to rules and regulations either by the UKGC or using Statutory Instruments as experience teaches us about the deficiencies of the regulations and public attitudes change.