Big Debate: In light of a parliamentary inquiry into the Gambling Commission, is the UK regulator fit for purpose?

Yes

David Clifton, director, Clifton Davies Consultancy Limited

This is not a new question. It is one that has already been explored by four other parliamentary bodies within the last 18 months or so.

The most damning indictments have been those of the Gambling Related Harm APPG and the Public Accounts Committee, whose respective chairs concluded that the Gambling Commission “is not fit for purpose” and is “a torpid, toothless regulator that doesn’t seem terribly interested in either the harms it exists to reduce or the means it might use to achieve that”. I disagree with both of those opinions.

More measured criticism of the regulator was made by the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry, but its call for “lax regulation of the gambling industry” to be replaced by “a more robust and focused regime which prioritises the welfare of gamblers ahead of industry profits” grossly mischaracterised the Commission’s high standards of regulation.

The most valid criticism of the regulator was that delivered by the National Audit Office which, among other things, called on the Commission to articulate what level of reduction it wants to see in the number of people affected by problem gambling, over what period of time this should occur and what would indicate good progress.

It’s easy to criticise the Commission for its exasperatingly poor website search engine, for jumping ahead of itself in the affordability debate and for the time it has taken to determine licensing applications while its staff have been working from home. But do these factors make it unfit for purpose? I don’t think so.

It has a new chairman and a new CEO, both with a mission to ‘transform’ the Commission. Although some criticisms of the regulator voiced by the APBGG have a sound foundation, this is not the correct time for those within, or associated with, the UK licensed industry to jump on the same bandwagon as those opposed to gambling or demanding that much stronger regulatory controls are imposed on the British gambling industry.

No

Dan Waugh, partner, Regulus Partners

To understand whether the Commission is fit for purpose, it is important to be clear on what that purpose is. The regulator exists to ensure the market functions efficiently and in the best interests of the consumer – consistent with the licensing objectives of fairness, crime prevention and the protection of vulnerable people and children. These goals are uncontentious but so broad as to invite subjective interpretation – particularly in harm prevention.

In recent years, there have been suggestions the Commission has revised its own view of what the licensing objectives mean. For example, in last year’s consultation and call for evidence on remote interactions, the regulator appeared to define a majority of people in Britain as “vulnerable”,  a revision that is patently at odds with the intention in the act. It is difficult to see how market sustainability may be achieved if the regulator perceives most or all gamblers as helpless victims rather than rational consumers.

The wellbeing of consumers is the true test of regulatory effectiveness. The collapse of Football Index earlier this year is a clear instance of market – and therefore regulatory – failure. The recent report from Malcolm Sheehan QC will have made for uncomfortable reading. Yet while the episode highlighted certain shortcomings, it does not mean the regulator is moribund. Several hundred people are employed at the Commission and a majority go about their work diligently and in good faith. The problems that have beset the Commission have been the result of weak leadership during a period of crisis for the market – but these are soluble and redemptive action has seemingly been taken.

The new chair and CEO, Marcus Boyle and Andrew Rhodes, have an opportunity to address the challenges that face the Commission unencumbered by the sunk cost of past missteps. Refocusing the organisation on its core purpose – the sustainable functioning of a regulated gambling market – is likely to be key to restoring trust.