Five things we learned from the BGC’s DCMS Select Committee grilling

Betting and Gaming Council (BGC) CEO Michael Dugher was grilled by the Department for Culture, Media and Sport (DCMS) Select Committee over gambling regulation for more than two hours yesterday (11 July) as the trade body chief fought the industry’s corner in front of MPs.

Dugher was fresh off the back of helping defend the BGC against comments made by Lord Foster reported by The Guardian, which suggested the group had not been “fully accurate” in its reporting of black-market activity.

Joined by BGC director of standards and innovation Wes Himes, Dugher proceeded to cover a breadth of topics at the Palace of Westminster.

Alongside the much-repeated lines of 22.5 million UK adults enjoy a bet each month, the tax and job contributions and commitments to safer gambling, Dugher was forthcoming in his insights around the sector.

Complete with a jibe at The Guardian on its decision to ban gambling advertising expect for lotteries – the CEO said it was akin to “someone who was teetotal saying they were giving up the drink” – Dugher did delve into pressing issues such as affordability checks, advertising and game play.

Looking back over the heated session, EGR delves into five key takeaways that give some insight to where the industry hivemind sits on certain topics, and how Dugher and the BGC played roles in the long drawn-out process that was the white paper into the Gambling Act 2005 review.

Advertising is a privilege

“They didn’t actually conclude that there was harm,” retorted Dugher when pushed on the impact of gambling advertising via front-of-shirt sponsorship agreements in the Premier League. Questioned by John Nicholson MP on the topic, the BGC CEO was steadfast in his reply, pointing to the government’s own evidence that there was no discernible link between advertising and problem gambling.

Dugher said: “If the objective is to reduce harm, to tackle problem gambling, it would be a sensible thing to do if there was any evidence of a link between advertising and sports sponsorship and problem gambling. And the government, having reviewed all of the evidence, found no evidence.

“There isn’t the actual solid independent evidence base that links advertising and sports sponsorship to problem gambling.”

Nicholson proceeded to claim that the voluntary ban agreed to by Premier League clubs to phase out front-of-shirt sponsors by the end of the 2025-26 season was a clear and obvious admission of the fact it resulted in harm.

Dugher added: “They recognised that there was public concern about the scale and volume of branding around football and they responded to that.”

Dugher highlighted one of the outcomes of the white paper could be to see an increase on the 20% of marketing dedicated by BGC-affiliated operators to safer gambling. The former Labour MP said advertising hoardings in the English Football League could eventually all be dedicated to safer gambling messaging.

Later in the session, Himes added that “banning gambling would be a gift to the black market”. He continued: “Advertising is a privilege of licence. It allows customers to be aware of offers and it allows them to gravitate towards UK regulated sites. There would be no greater levelling up for black markets than if suddenly UK operators were not allowed to advertise.”

We know best

When asked about the progress of the single customer view (SCV), Himes revealed that operators are currently able to unilaterally add customers to the scheme without their consent.

Himes added that the SCV, which has been named GamProtect, is still going through its trial period to manage customers that are deemed to be suffering from “health-related harm” connected to their gambling activity.

Data is shared between operators, with accounts permitted to be closed to protect the individual concerned.

When questioned on the individual’s role in the process, Himes said: “We have gone very diligently through the Information Commissioner’s Office and underscored the privacy matters around that scheme. The verdict on that is we are able to make those decisions on behalf of those customers that show those very acute signs of health-related gambling problems.

“In that case, we are then allowed to put them into the scheme and we’re currently trialling that to understand its effectiveness.”

Dugher added that both the Gambling Commission (GC) and the government were holding the body’s “feet to the fire” on SCV.

Leaky ship

On the subject of the black market, which was the core focus of Lord Foster’s letter sent to the DCMS Select Committee arguing the BGC had overstated its significance, Dugher doubled down on the fact the unregulated sector was growing and continuing to attract punters.

The BGC CEO hinted that affordability checks, which have since been rebranded as financial risks checks, were having a definite impact on leakage, as were other planned measures put in place to reduce gambling-related harm.

Addressing this double-edged sword, Dugher said: “Part of me worries that part of the decline in problem gambling is that some of these people have just fallen off our box as we’ve put restrictions in place.

“It is absolutely the right thing to do in raising standards but I think there has been a displacement, which would explain why you’ve had roughly a doubling in the number of customers and a doubling in the amount being staked.”

In the report by The Guardian, it claimed that the Yield Sec report used by the BGC to highlight the growth of the black market actually revealed that it accounted for just 1% of overall UK gambling spend.

The Yield Sec report has yet to be publicly released in its entirety.

Expanding on the impact of financial risk checks, Dugher added: “We have it anecdotally from operators all the time that customers have come to and said they are not prepared . They’ve not stopped gambling, they’re just gambling elsewhere.”

Details revealed in the white paper note that these financial risk checks will occur in the background with little customer interaction. In the run up to the release of the policy document, operators had been proactively clamping down on customers via document requests which had led to punter revolt in some circles.

When pushed on what could help tackle the leakage, including allowing Internet Service Providers (ISPs) greater powers to shut down sites, Himes said: “It is a constant fight. There is no silver bullet to the black market. Ultimately what we want to do is keep customers here in the UK regulated market and to do that we need to provide them with the experiences that they’re looking for.”

Ombudsman, here we come

Another proposal raised in the white paper was the introduction of an industry ombudsman to manage customer complaints against operators. Himes confirmed the government has asked the industry to bring forth an ombudsman by summer 2024, a target he described as “challenging”.

Himes continued: “The minimum amount of time to create an ombudsman has been three years when you look at others, but we have embraced that challenge. We’re currently scoping out the main focus of the ombudsman which is to deal with social responsibility cases. We’re developing the parameters by which the ombudsman will judge those cases and we’re moving at pace.”

When pressed on who the ombudsman would be ultimately accountable to, Himes relayed the example of the existing Alternative Dispute Resolution (ADR) services which have an associated independent board filled by non-operator-associated personnel.

However, Dugher was bullish on the topic. He argued that an ombudsman could already be in situ had the government not “wasted at least a year needlessly” on the white paper. The CEO said the BGC was “100% committed” to introducing an ombudsman, but also relayed caveats to his thinking.

Dugher said there were concerns that the ombudsman might just focus on BGC members, which would effectively safeguard the National Lottery from claims put against it.

He explained: “It will be nonsense for my members to be put at a competitive disadvantage because they are doing the right thinking. I think all consumers should have access to the ombudsman. I think it needs to apply to the National Lottery as well.

“I don’t see why, just because they get a free pass on credit card gambling, RET funding or advertising restrictions, why the biggest gambling products that are available and the biggest GGY , why they wouldn’t also be covered by an ombudsman.”

Person not the product

Finally, the BGC duo touched on the range of products on offer from operators, before debating the fact that some verticals are intrinsically more harmful than others. Referencing a six-year-old survey during the session, Himes said that according to a GC study, slot machines held the highest problem gambling rate at 13.7%, with the National Lottery the lowest at 1%.

However, Himes went on to argue that all products have the possibility of resulting in harm for users: “Where we see a product that has a higher degree of the percentage of problems gamblers, we do anticipate that we are looking at measures in order to make that product safer.

“I think it is speculative to say that a product is addictive ‘by nature’. The fact of the matter is, unfortunately, you can have problem gambling around any product, including the National Lottery.”

Dugher proceeded to argue that tackling problem gambling rates also needed to focus on individual behaviours rather than sweeping claims on the impact of particular products.

Dugher said: “It is right to say that some products are less risky but the point I would return to is that if we’re going to tackle and prevent harm, we’ve got to look at individual customers and we’ve got to look at trigger points in terms of their behaviour.”

Labour MP Paul Blomfield interjected at this point, contesting that Dugher seemed to be “turning the conversation every opportunity away from looking at problem products”.

Dugher responded: “I genuinely don’t think that is the answer, Paul. I think we just disagree on this.”

Blomfield replied: “You don’t think there are problem products?”

To which Dugher remarked: “I think all products have got potential. All products have a degree of problems associated with them. I think if you’re going to tackle harm you’ve got to not just look at products but you’ve also got to look at individuals, behaviour, risk and vulnerability.”

Additionally, Himes refused to be drawn in on whether the BGC would back a proposal to allow new products to be independently tested for safety. The director of standards and innovation said the body would “have to understand” how safety was judged before committing to any potential scheme, then followed on by reminding MPs that products already adhere to regulatory standards testing.

Himes said: “Then you have to create a scale in order to judge . We are happy to look at products and where we can put measures in and around and make them more safer.”

When pressed again on whether different products could have stronger warnings associated with safety, Himes pointed out that the industry would have to understand what the definition of safety was in the example.