Posted on: June 22, 2022, 08:34h.
Last updated on: June 22, 2022, 08:34h.
The UK Gambling Commission (UKGC) is constantly introducing new rules and regulations for the country’s gambling industry, including some that appear overbearing. In its latest initiative, which the regulator presented yesterday, it asserts that consumers can’t be trusted to determine how to spend their money.
The UKGC has instructed gaming operators to stop marketing to consumers who spend a significant amount of their discretionary income on gambling. The operators will also need to conduct “responsible gambling interactions” regularly with online gaming customers.
The new rules are a follow-up to the UKGC’s April publication of new regulations for consumers it feels have a higher risk of becoming gambling addicts. As outlined in the rules, those guidelines instructed operators licensed in Great Britain not to market to any customers that fall into this category.
More Questions Than Answers
Operators have to identify the indicators of harm and act promptly. Automated processes can also be implemented to strengthen indicators of harm.
However, the UKGC hasn’t provided any specific information about what “at-risk customers” might be. Still, it explained that there are many potential factors that come into play. These include personal and demographic factors like age, health and financial difficulties.
In addition, there are behavioral factors, such as attitude to risk, and market-related factors, such as access and type of bets, and literacy. The UKGC also believes that “unmonitored overnight gambling” is a sign of gambling addiction.
As Andrew Rhodes moves from interim to permanent chief executive of the UKGC, the regulator did not mention specific thresholds that operators could apply to all customers. Instead, it noted that they should create “custom” thresholds using open-source data about their customers.
The UKGC added that gambling licensees had not considered affordability in developing their customer interaction policies. It stated that many have used deposit and loss thresholds to prompt these interactions. However, these levels were often too high in relation to the amount of money most people have to spend on leisure activities.
Although the UKGC wants operators to use “custom” thresholds, it inadvertently showed the fallacy of the initiative. It claims that open-source data is available for assessing affordability and adds that the thresholds should be realistic and “based on the average income” of operators’ customers. However, basing a decision on an average nullifies the ability to create custom procedures.
The regulator also believes that “most people would consider it harmful if they were spending a significant proportion of their discretionary income on gambling.” However, previous studies have shown that over 75% of gamblers participate for its entertainment value. In other words, they know where they spend their discretionary income.
Reliance on Outdated Research
The UKGC, which receives tens of millions of pounds annually from the gaming industry, is relying on outdated research to generate modern-day policies. It admitted that, at times, it used figures from four years ago in formulating its latest initiatives.
The regulator quoted a 2018 Public Health England (PHE) survey that found 8.5% of online gamblers fall into the “problem gambling” category. At the same time, 3.7% of online sports betting customers are in that same category.
Additionally, 1.3% of customers who play lotteries other than the National Lottery are also “problem gamblers.” However, given that the lottery is the most popular form of gambling globally, it would seem the UK doesn’t actually have a problem.
However, more recent studies have produced findings that show much better results about the state of “problem gambling” in the UK. For example, one of the UKGC’s own surveys recently revealed that the problem gambling rate dropped from .4% last year to .2% this year. The regulator then flipped its position shortly after, claiming that the rate was 1.3%.
The regulator added that operators need to assign quotas to the number of people they identify as “problem gamblers.” It asserted that systems must identify “numbers of customers at least in line with the problem gambling rates for the relevant activity….” If not, the operators’ systems are not functioning properly.
The UKGC might request monthly progress reports to make sure that they do so. However, it didn’t expressly mention this in its latest update.
More and More Research
The regulator is prepared to spend millions of dollars researching gambling harm. But, at the same time, it admits that there are flaws in previous surveys and errors in the measurements upon which it bases some of its responsible gambling initiatives.
The UKGC has been around for almost 15 years. Although it regularly conducts investigations into problem gambling, it doesn’t appear to have figured out how to approach the subject.
As its recent pilot program likely indicates, the regulator needs to be much more thorough. It feels that a survey of only around 1,000 people, with a subsequent response rate of 21%, is enough to establish policies that are responsible for hundreds of millions of pounds in annual revenue and tens of thousands of jobs.
The regulator’s new guidance takes effect on September 15.