Gambling Commission boss raises alarm over “blurred lines” between investment products and gambling
“Language has changed in these products, with talk of ‘investment’ and trading, yet with none of the safeguards or standards those terms should bring with them.”
Several of the products carry the hallmarks of gambling, he added, despite remaining unregulated, and can cause a different pattern of harm to consumers when compared to gambling.
In traditional gambling, he said: “We are accustomed to thinking about a pattern of deposit and losses. Chasing losses, escalating deposits, and deepening financial problems in the worst cases.“With these evolving products, the pattern is different – it sees more and more deposits – sometimes wildly unaffordable levels, with theoretical increases in value and ever-increasing exposure to loss. When the harm occurs it can be instant and catastrophic, with little or no recourse.”
Rhodes did not suggest the Gambling Commission should regulate products such as NFTs or other investment products, but that “these are lucrative growth areas, and we ignore them at our peril.”
Gambling Commission CEO Andrew Rhodes: “When the harm occurs it can be instant and catastrophic, with little or no recourse.”
Finally, he suggested the industry is likely to see increasingly blurred lines between traditional gambling and the new products coming to market, in a way that has never been seen before.
The British government’s Gambling Act Review White Paper is expected to be published in May.