Analysis: Is criticism of the Gambling Commission fair?

By Tim Poole

Kicking off the Bet 2020 virtual conference last Thursday, Steve Donoughue delivered arguably the most insightful and articulate talk of the day.

But, if you know Mr Donoughue and have heard him speak at gaming conferences before, you could have predicted his message before he uttered a single word.

Lambasting what he feels is an overbearing approach from the Gambling Commission, ever since Sarah Harrison MBE became its CEO (she left the regulator in February 2018), Donoughue declared it a “very bad time to be in the British gambling industry.”

He said: “Every week, we have one company after another being fined millions of pounds for not doing enough on problem gambling or anti-money laundering.

“Some of it is warranted, some of it is slightly excessive. If you count the number of problem gamblers involved, we are probably talking 10 or 12; it’s probably £1m ($1.24m) per problem gambler.”

Donoughue went on to predict an “80% chance” of gambling turning into the “new tobacco,” with advertising restrictions, affordability limits and a “national health approach” to gambling – brought on by the political climate rather than any evidence-based strategy.

But while Donoughue is a respected analyst and Gambling Insider contributor, he will freely admit he sits on the extreme end of the anti-regulation scale.

In this sense, members of the Gambling Commission could be forgiven for feeling frustrated at accusations coming from both ends on the spectrum. Indeed, it has on more than one occasion been deemed “not fit for purpose” by the Gambling Related Harm All Party Parliamentary Group – but for completely different reasons.

This group of MPs is driven by a political inclination at the opposite end of the scale, broadcasting a fully anti-gambling and pro-regulation message. Unreasonably so, it has to be argued, although that argument’s for another day.

In response to both sides of the debate, however, the Gambling Commission can hold its head high when defending its most recent decisions.

As Donoughue admits, many of the fines handed out in 2020 have been “warranted.” But he is perhaps still dismissing things too lightly.

Let’s look at just two of the biggest examples (rest assured there are plenty of others). Caesars Entertainment UK was fined £13m by the Commission – a record penalty – but with very good reason.

Considering the current industry-wide focus on compliance, Caesars – a large operator, not a lowly start-up or anyone new to the game – allowed a player to deposit £3.5m and lose £1.6m over a three-month period, without adequate source of funds checks.

This was not five years ago; this was not 10 years ago. The scrutiny on compliance within the gaming sector had well and truly begun during the period in question (Jan 2016 – Dec 2018), in which Caesars also allowed a self-excluded customer lose £240,000 in 13 months.

In March, Betway was fined £11.6m for a series of social responsibility and money laundering failings.

Again, Betway is far from a small player in the industry. And yet it allowed a VIP customer to deposit £8m and lose £4m over four years without any source of funds checks. Another player lost £187,000 within two days.

As much as £5.8m flowed through the business which was “found or reasonably suspected to be the proceeds of crime.”

These are all unacceptable actions and the regulator simply came down firmly and fairly on the organisations in question. In these rather brazen instances, the Commission cannot in any way be declared too lenient by politicians, nor too draconian by critics.

During ICE London, meanwhile, the Commission was fully willing to engage with the sector, delivering talks and making itself both seen and heard. There are other gambling regulators the world across who aren’t anywhere near as forthcoming.

More emphatic, though, is how the Gambling Commission is viewed by other sectors and outsiders to gaming. Last July, Kompli-Global CEO Jane Jee told Gambling Insider the Commission is highly respected when it comes to dealing with KYC and AML issues.

She explained: “In the Economic Crime Plan recently published by the Government, there are very few references to the Gambling Commission. It was the only regulator in this area not criticised. There have been particular criticisms of lawyers and accountants outside the financial sector. But the Gambling Commission has been seen as doing a good job. The Gambling Commission has largely been one of the best regulators in this area.”

Earlier that same month, AgeChecked CEO Alastair Graham spoke to Gambling Insider of the Commission’s influence, with the body even being looked up to in the field of age verification.

“I actually see other jurisdictions following the UK very closely,” he commented. “We do work with companies in other markets and they expect their jurisdictions to be following these regulations soon as the Gambling Commission is so influential.”

On balance, then, while the Commission appears to be following a path of growing restriction, blanket criticism of it is unjustified.

While we at Gambling Insider have ourselves questioned the regulator often enough, such as when it committed the heinous error of sending its children gambling report exclusively to the Daily Mail in advance of publication, everything must be assessed on a case-by-case basis.

Certainly, if online stake limits are introduced further down the line that cause huge damage to the regulated UK market, the Gambling Commission may stand accused of abusing its power and bowing to political pressure.

Currently, however, the string of sanctions being handed out to gambling companies is the result of incompetence and neglect on operators’ parts alone. They’ve deserved their punishments.

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