A parting gift: Clive Hawkswood looks back on 14 years at the Remote Gambling Association

Remote Gambling Association (RGA) CEO Clive Hawkswood announced in September that he would leave the industry trade body after helping to appoint his successor. Hawkswood has enjoyed, and endured, what has been a front-row seat on the good, the bad and the ugly of the UK gambling industry during his 14-year reign, which has stretched right the way through from the implementation of the Gambling Act in 2005 to the slashing of Fixed Odds Betting Terminals (FOBT) stakes in 2018.

Although Hawkswood insists that now is the right time to step aside, he has earmarked two key objectives to complete before calling time on his notice period. The first is to help the RGA find a replacement CEO who can get to grips with an ever-changing role without needing too much of a settling-in period during a pivotal time for the UK gambling industry. The second is to try to establish a partnership or merger with another trade body that can help the RGA consolidate and exert its influence among gambling stakeholders. “If I can do one thing before I leave, it will be to get that on track,” he says.

Here, Hawkswood answers questions on a range of industry-related issues and he believes that operators, both land-based and online, must work together in the face of governmental and regulatory scrutiny to restore the public’s dwindling trust in the sector.

EGR Intel: How has the role of the RGA evolved during your time in charge?

Clive Hawkswood (CH): If nothing else I would like to think the RGA has worked together to help the industry collaborate and address the challenges that arise in every jurisdiction.

I feel we are much better prepared for those challenges now than we were 14 years ago when the RGA was in its infancy and nobody knew what was down the road. When we started, most countries didn’t even have licences for online gambling. We take it for granted now that most European jurisdictions do. We’ve also come a long way in the development of the online sector. It is a huge journey to have been on in a relatively short period.

EGR Intel: Are there more regulatory challenges now than ever?

CH: I think that in the specific years you’re dealing with, it can seem like there are more hurdles than there were before. But if you go back 10 or 12 years, sports betting integrity, for example, was a huge issue. People thought that sport was riddled with corruption and that licensed betting operators were involved somehow. The level of ignorance was staggering. That rarely comes up these days but it is an ongoing issue that we have to stay prepared for. Also, not that it doesn’t come up periodically, is the issue of money laundering. We have come so far in dealing and preparing for those challenges.

The one challenge that will always exist is social responsibility. Expectations have changed around what the industry can and should be doing. Those expectations have gone through the roof, certainly in the UK, from back where we were in 2007. It isn’t firefighting – we are better at it than that – but there will always be people who suffer from gambling, so that will be an ongoing theme.

RGA CEO Clive Hawkswood

EGR Intel: Are operators taking social responsibility seriously now to protect the future of the industry?

CH: Not everybody has the same view, but the industry is trying to get on the front foot now. I am probably generalising, but there does seem to be a different tone and a different approach coming out of the industry. They seem less defensive, more proactive, and are suggesting ways that things can be done now. Look at the discussion about a statutory levy to fund educational treatment – if you look back a few years, everyone in the industry said it was awful and that has changed.

Not everybody supports the principle, but it was great that the RGA could propose that to the government, so that when these issues are raised in parliament or the press, we are not caught on the back foot, looking like an industry with its head in the sand. It is hard because we know how competitive the market is and how tight the margins are, but there is an acceptance now that actually getting this right will safeguard the long-term future of the industry. People think it is the right thing to do and it will have long-term commercial value. We will have longer retention of customers and we will gain more trust from regulators.

EGR Intel: Will the mainstream news ever report stories on responsible gambling initiatives?

CH: There are some people in society who have a negative view of gambling and that is never going to go away – it’s the same with smoking and alcohol. In terms of the wider media, I think we need to take a step back and ask, ‘what kind of world do they operate in?’ They are fighting competitors and fighting with social media. A story about some poor soul who has committed suicide as a result of gambling will attract more interest from the average reader than a story about improving the way we detect underage gambling.

EGR Intel: In your experience, is that also true outside of the UK?

CH: It just isn’t as newsworthy and that will be true in every country. In the US, in the states of New Jersey and Nevada, gambling is such a major industry that you will get more positive press than you do elsewhere, simply because it is so important. You also notice that on a smaller scale in places like Malta and Gibraltar – if the GDP of gambling is north of 10% then the industry is likely to get a fairer shout because the benefits to the economy are there for everyone to see and it is much harder to depict gambling as an evil empire. There is the perception that problem gambling is out of control and that all these children are gambling but official facts say problem gambling rates have been stable since the year dot. A lot of it is just what people want to believe.

EGR Intel: What do you think about the advertising debate and stricter regulations in Italy, Ireland and Australia?

CH: Going back to that analogy of perception versus reality, I actually think advertising is the best example. The independent research shows a very tenuous link between problem gambling and advertising and that fewer children are watching advertising than ever. However, I also have to say that the gambling industry is not immune from the same feelings as everyone else, and the gut feeling is that there is simply too much of it. There was a strong feeling among a lot of companies that they would be happy to ditch adverts before 9pm, but we couldn’t take that forward because of competition law.

With the way advertising is evolving, we have to work together with regulators to find out exactly what the problem is that we are seeking to address. Is there just too much of it? Or are there specific timings or specific demographics that are the problem? There is no immediate view on advertising that we would die in a ditch over. A lot of people would like to see simple solutions and a silver bullet that they all understand. But nothing is that easy. Problem gambling is a hugely complicated issue, and that obviously isn’t an excuse for doing nothing as that wouldn’t be right. We need to have layers and layers of safety nets that make it as hard to fall through as possible.

EGR Intel: Do UK Gambling Commission regulations restrict innovation in gambling?

CH: It can certainly affect innovation, but that is just reality. We are working with a number of suppliers at the moment from the first point that games are developed.

When people first start work on these games, is anybody considering social responsibility? Are there certain games that are more problematic than others, and is this being looked into at the developmental stage?

That was flagged in the UKGC review of online gambling and we are trying to stay ahead of the game, but it may be that those regulations do stifle innovation in some ways. But if we aren’t compliant with these regulations, and the regulator takes a tough line across the board as a result, the external pressure that results will stifle innovation even more.

It is frustrating sometimes that regulators don’t seem to care about the commercial impact, but they will say it isn’t their job.

Does the UKGC restrict innovation?

EGR Intel: The UK used to be an attractive market, but has it been left behind?

CH: The UK is such a competitive market that it makes it very hard for someone new to come in and make an impact. Alongside that, the regulatory, compliance and tax costs are going up and up and up. There will be a tax hike on remote gaming duty in the next budget and regulatory costs are rising. On the regulatory side, you have not only the burden of the extra measures, but also the internal costs of increasing compliance resources, which add up significantly when you have a small margin to play with.

In every jurisdiction there is this tipping point where customers will start looking for unlicensed operators outside of the market, but the UK is not at that point yet. In the US, there has been a huge black market for so long that the problem is how you attract those people back to licensed operators. In our experience, the best way to do that, and this doesn’t sit well with regulators or politicians, is to offer the right product at the right value in the licensed market. Getting the balance between regulation and tax right is absolutely essential.

EGR Intel: Have we seen the back of hefty fines being handed out by the UKGC?

CH: Given how big and diverse the industry is, I think it is unrealistic to expect that further mistakes won’t be made and they will lead to more companies getting more penalties. Everyone in the industry has a common interest in learning from those cases and trying to make sure they don’t occur again, but with the complexity and size of the industry, there will always be something. The bottom line is gambling is not a Big Brother state where we know everything about every gambler. We have good profiles, we are trying to build up that level of KYC, notwithstanding the GDPR challenges on the other side of the coin. But we aren’t going to be able to stop every single one of those cases, no more than the police are able to stop crime before it happens.

EGR Intel: What is the next step for the RGA? Is it merger time?

CH: I think there has to be a logic to that. There are tweaks between land-based and online but many are the same issues. If you look at the UKGC’s internal reorganisation, they have moved away from addressing issues on a sector-by-sector basis. It would be foolish not to recognise that direction of travel. There is lots more that unites the different sectors than divides them. The whole FOBT show over the last few years has made a lot of those relationships very difficult.

One of the weaknesses across the whole gambling industry in the UK is that politicians and regulators have found it far too easy to play us off one against the other. It is very hard then to get any sort of meaningful deregulation. For a heavily regulated industry, to have absolutely no hope of getting any deregulation just seems perverse. The government is afraid of giving anything away because it will be seen as pro-gambling or other parts of our industry will start attacking it and saying how unfair it is publicly. If we can move away from that, it would be a huge step forward. I also certainly see a rationalisation on the trade association front – if I can do one thing before I leave it will be to get that on track.