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To what extent should the Gambling Commission be guided by the Regulators’ Code in discharging its duties? To what extent does it comply with the Code and how would we ever know? Does this matter?

This is the discussion that we hope to stimulate with the publication today of our new report: Questions of Principle: Assessing the Gambling Commission’s compliance with the Regulators’ Code and the Nolan Principles’.

At present, there is considerable uncertainty about what influence, if any, the Code should exercise on the regulation of Britain’s betting and gaming market; and the perpetuation of this uncertainty, we argue, is unlikely to be in the best interests of consumers.
 
The Regulators’ Code was introduced in 2014 by the Department of Business Innovation and Skills. All statutory regulators in Great Britain – including the Gambling Commission – are required to “have regard” to the Code in exercising their duties – a phrase that accommodates a high degree of subjectivity.

Last year, Commission CEO Andrew Rhodes described the Code as “not a long document – just seven pages”; and “a sensible set of guiding principles” – a characterisation that drew rebuke from the legal community.

One leading lawyer responded: “I am sure Andrew Rhodes wouldn’t like to see gambling operators treating, for example, its seven-page Industry Guidance on High Value Customers as just a ‘sensible set of guiding principles’”.

The exchange highlighted an unhelpful difference of opinion between the market regulator, its licensees and licensing lawyers.
 
The Code itself consists of six provisions:

Regulators should carry out their activities in a way that supports those they regulate to comply and grow;

Regulators should provide simple and straightforward ways to engage with those they regulate and hear their views;

Regulators should base their regulatory activities on risk;

Regulators should share information about compliance and risk;

Regulators should ensure clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply;

Regulators should ensure that their approach to their regulatory activities is transparent.

Regulators are required to adhere to the Code in the context of their wider statutory roles and they may exempt themselves from certain provisions, so long as they explain why. 
 
Our analysis suggests that, while the Gambling Commission (which has not announced any Code exemptions) is often compliant, there have been instances where it appears to have breached code provisions, sometimes on a repeated basis. Our report highlights particular concerns with regard to the Commission’s observance of the first and sixth Code provisions – supporting compliance and growth; and ensuring transparency.
 
The first of these Code provisions is often misinterpreted as a requirement for the Commission to encourage economic growth at all costs – something that is clearly incorrect. The provision is however, more nuanced than this. It asks that regulators “avoid imposing unnecessary regulatory burdens”; and that they “assess whether similar social, environmental and economic outcomes could be achieved by less burdensome means”. 

They should also “understand and minimise negative economic impacts of their regulatory activities”; “improve confidence in compliance for those they regulate, by providing greater certainty”; and “ensure that their officers have the necessary knowledge and skills to support those they regulate, including having an understanding of those they regulate that enables them to choose proportionate and effective approaches.”
 
These are sensible requirements for any market regulator; and yet we were able to find little evidence that the Commission actively pursues them. Its public consultations rarely (if ever) suggest active consideration of the need to understand and minimise regulatory burdens.

Last year, Rhodes observed (correctly) that “growth must come when the business is compliant, not instead of it”. This is undoubtedly true, but the fact is that most licensees are compliant (if they were not then they would cease, at some point, to be licensees).

No market – even a monopoly – is likely to be 100% compliant all of the time; and it is clearly not the intent of the Code that regulators should withhold support pending universal compliance. It is also unclear why the Commission would see non-compliance as a reason to ignore its duty to “understand and minimise negative economic impacts” of its regulatory activities, or to “ensure that their officers have the necessary knowledge and skills” – particularly when it is often the customer who ‘pays’ for impacts and deficits. 
 
Our report highlights a number of instances where the Commission appears to have fallen short of the standards set by the Code. These include:

The approval of regulatory settlement grants for organizations and individuals openly engaged in anti-gambling advocacy;

The misuse of statistics and research – and the withholding of key evidence -in public consultations on regulatory reform;

Inconsistent and often opaque approaches to policy determination (arising from public consultations);

A failure to apply evaluation or scrutiny to the award of £90m of regulatory settlements between 2019 and 2023.

In addition, as we note in our article for Cieo this week (Help! I have become an ‘issue’ – Cieo), we have uncovered indications of bias within the Commission’s Advisory Board for Safer Gambling, as well as the existence of secret meeting notes which should, in our view, have been published.  
 
Any review of compliance is necessarily selective – and no organisation is perfect. It is important not to lose sight of the many achievements of the Commission in supporting a generally well-functioning market, characterised by low rates of illegal and underage gambling and a world-leading approach to sports integrity.

The rate of ‘problem gambling’ is also very low by international standards, with 0.25% of adults estimated to be PGSI ‘problem gamblers’. This, at least, is the case at present – although the Commission’s plan to replace the ‘gold standard’ NHS Health Survey with its experimental Gambling Survey for Great Britain seems certain to result in much higher – and far less reliable – reported rates of ‘problem gambling’. 

In conclusion

The Regulators’ Code is a valuable document, designed to help market regulators to focus on their statutory roles, without getting distracted by alternative, often incompatible political agendas.

The Commission has the opportunity to make far greater use of the Code by stating explicitly how it guides its strategy; by actively monitoring and reporting on its compliance (as some other regulators do); and by establishing a mechanism for constructive engagement with licensees and others in regard to suspected breaches.

The absence of such measures will inevitably give rise to confusion and cynicism – neither of which is in the interests of the consumers who the Gambling Commission was established to serve.


Regulus Partners is a global research and strategic advisory business focused on the sports and leisure sectors.

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