UKGC Struggling to Keep Up With Gambling Industry, Report Concludes

  • NAO report highlights rise of online gambling, says Commission lags behind industry
  • Looks into regulator's measures against gambling-related harm and emerging risks
  • UKGC urged to work with industry operators to provide problem gambling protection 
  • Watchdog underlined current funding constraints but acknowledged need for more to be done
poker chips with ipad showing online casino screen in background
The UKGS’s efforts to curb gambling-related harm are “unlikely to be fully effective”, according to the NAO. [Image:]

NAO questions regulator’s effectiveness

As part of a review on the UK’s gambling regulator, the National Audit Office (NAO) has said the Gambling Commission (UKGC) “lags behind the industry.”

The UKGC was criticized for the way the watchdog has tackled the rise of online gambling, despite having powers to regulate the industry through disciplinary measures such as fines.

The report ended with the verdict that the Commission would be:

unlikely to be fully effective in addressing risks and harms to consumers within the current arrangements.”

This was due to “inflexible funding” and a “lack of evidence on how developments in the industry affect consumers.”

Why was the report needed?

The NAO looks at the effectiveness of public bodies in the UK. It was commissioned to look into how the regulator protects people from gambling-related harm and addresses emerging risks.

In its review, the office remarked that around half of Brits currently participate in some form of gambling, from arcade games and casinos to bingo, the lottery, and sports betting. Currently, the gambling industry in the UK raises around £3bn ($3.88bn) a year in duty alone.

The report addressed the issue of whether the Gambling Commission had the correct powers and expertise to address emerging changes in gambling. It was especially concerned with new risks emerging in online and mobile gambling as well as through other technological developments.

A small regulator in a fast-evolving industry

Other issues in the report highlighted a lack of budget for the Commission. This was despite its £19m annual budget and the fact that it handed out almost £20m ($25.84m) in fines last year.

The penalties were mainly for breaking regulations, such as having no or inadequate anti-money laundering checks and non-compliance. Gambling operators also received fines for targeting minors with badly placed adverts.

The UK gambling industry’s advertising spend rose by 56% between 2014 and 2017, something the NAO says the commission has not kept pace with. And with the increase in mobile gambling having almost doubled, the auditing body observed that developing technologies and links with popular sports such as soccer pose risks to gamblers.

Gareth Davies, head of the NAO, said: “The Gambling Commission is a small regulator in a huge and fast-evolving industry.” He concluded that:

While the commission has made improvements, gambling regulation lags behind the industry.”

The UKGC has already announced a review of the 2005 Gambling Act, but the NAO wants it to do more. It has called on the commission to work with operators to provide problem gambling protection. This would include financial and reputational incentives. There may also be changes in how the commission is funded, such as a revision of license fees.

Response to the report

The Gambling Commission replied that the NAO’s report “underlines the constraints that our current funding arrangements presents, and we are developing proposals to discuss this with the Department of Culture, Media and Sports”.

It defended some of its recent measures, such as tightening up age verification and banning gambling on credit cards. It did, however, acknowledge that there was more to be done.

In a statement, the Department of Culture, Media, and Sports urged “a reduction in the number of people experiencing harm.” It added, “we are currently pushing the industry to focus on poor VIP practices, advertising technology and game design.”

Meanwhile, Labour MP Carolyn Harris has called for the resignation of Chief Executive Neil McArthur, claiming that “the Gambling Commission is not fit for purpose.”

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