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David Clifton: Licensing Expert – All eyes focused on on gambling’s A-Factor

January 2019 famously saw the introduction of the gambling advertising ban in Italy, with forecasts of the disaster that would befall the industry if similar prohibitions spread across Europe. The following year a new Royal Decree on Commercial Communications imposing strict limitations on gambling advertising in Spain was approved by the European Commission. Only the COVID-19 pandemic has delayed its implementation.

More recently, a ban has been introduced in the Republic of Georgia. Belgium could be on the brink of doing so, its Justice Minister having controversially declared that “gambling is the new smoking”. Sweden has only just stepped back from a similar brink, the Netherlands has yet to decide and Ireland is considering a pre-watershed prohibition of gambling ads.


It should therefore be no surprise that the vexed issue of gambling advertising in Great Britain has been gaining ever greater prominence in media headlines and political debate since the UK Government launched its Review of the Gambling Act 2005 in December 2020.

The official government line back then was that: “studies looking at the impact of advertising on adult gambling behaviours have indicated that exposure to advertising may be linked to a greater propensity to gamble. However, the existing evidence base does not demonstrate a causal link between exposure to gambling advertising that complies with the current rules and problem gambling”.


That statement was largely based on a literature review conducted in 2014 by Professor Per Binde for what is now GambleAware. This explored the following five possible mechanisms by which gambling advertising could impact problem gambling behaviour:

  1. stimulating a current gambler’s gambling behaviour to an extent that it becomes problematic,

  2. inducing a non-gambler to start gambling in a way that quickly becomes problematic,

  3. inducing a non-gambler to start gambling in a way that eventually becomes problematic,

  4. maintaining or exacerbating existing problem gambling behaviour, or

  5. creating a positive societal attitude (particularly amongst young people) towards gambling.

As the then Gambling Minister John Whittingdale said in a written parliamentary answer in June last year: “Of these potential impacts, Binde’s review found empirical evidence only for the fourth. While this research found evidence that advertising may adversely impact problem gamblers’ efforts to cut down, it did not establish a causal link between exposure to advertising and the development of problem gambling”.


Not surprisingly, the Gambling Related Harm APPG took issue with this. In its June 2020 Online Gambling Harm Inquiry Report, the APPG had maintained that, based on the evidence it had received and “given that the point of advertising is to encourage people to gamble and given the clear risks of exposing children to gambling advertising”, there was a clear case for banning all gambling advertising, marketing and inducements across all channels, adding that the Government was “out of step with the stringent restrictions and interventions in other jurisdictions”.


There then followed in July last year an exchange of correspondence between the APPG and the Minister, concluding with the latter receiving from the former a letter containing links to research papers which the APPG claimed do show a ‘causal link’ and wider links between adverts and harm to different groups. The dialogue appears to have concluded there.


So where does the Government stand now?

A brief House of Lords Debate on ‘Gambling Reforms’ on 17 May disclosed that, in the Government’s opinion, “Public Health England’s evidence review did not find evidence that exposure to advertising and marketing was a risk factor for harmful gambling”. However, to find out more detailed information on the Government’s current position on gambling advertising, we have to go back to two earlier debates.


The first was an earlier House of Lords debate on 1 March opened by Lord Foster of Bath. He is the Chair of Peers for Gambling Reform’, a pressure group that advocates a ban on direct marketing and all inducements plus an end to sports sponsorship by gambling operators. This debate focused on the link between gambling advertising and gambling-related harm.


Speaking for the Government (as he had done on 17 May), Lord Parkinson of Whitley Bay noted that Professor Binde had concluded “There is no evidence in this study that gambling advertising in mass media substantially contributes to gambling problems”. He commented that this “would seem to confirm that it is people already experiencing gambling problems who are most likely to be affected by gambling advertising, but we do take preventing gambling harm very seriously”. He added that the Government nevertheless welcomes efforts to develop the evidence base on this subject in order to improve understanding and acknowledged that gambling advertising remains an important part of the Government’s Gambling Act Review, bearing in mind that the ways in which gambling is advertised and marketed have changed considerably since the 2005 Act was passed.


On that front, he detailed numerous ways in which the advertising rules have been strengthened at points throughout that time not only by the Gambling Commission but also by the Committees of Advertising Practice and under the sector’s own Gambling Industry Code for Socially Responsible Gambling. He nevertheless made it clear that the Government will “not hesitate to take action to rule out harmful practices”.


Of interest to many readers will be Lord Parkinson’s comments on the associated subject of gambling sponsorships in sport. In this respect, he confirmed that the Government recognises concerns about both (a) the visibility of gambling brands in sports widely enjoyed by people of all ages, including children, and (b) the role that sponsorship can play in supporting elite and grass-roots sport, emphasising that whilst the evidence was being looked at closely by the Government, no policy decisions had at that time yet been made.

In his speech, Lord Parkinson also placed particular emphasis on existing rules designed to ensure that gambling sponsorship is not targeted at children and that gambling ads are not of ‘particular appeal’ to them. Matters have now moved further forward in this latter respect with announcement on 5 April of material changes to Committee of Advertising Practice rules that will come into effect on 1 October 2022. From that date gambling ads likely to be of ‘strong appeal’ to children or young persons are prohibited, especially if they reflect or are associated with youth culture.


As the Advertising Standards Authority has said in its recently published Annual Report, this change in the rules is “a step-change from the existing rules that gambling ads must not be of ‘particular appeal’ to children”. A ‘strong’ appeal (as opposed to ‘particular appeal’) test will prohibit content including imagery, themes and characters that have a strong level of appeal to under-18-year-olds. Under the new rules, this means that gambling advertisers will be prohibited from using sports people, reality TV stars and references to video games well known to under-18s, even if they also appeal strongly to adults.


The second debate I want to briefly mention took place in Westminster Hall on 31 March, at the close of which Nigel Huddleston (another former Gambling Minister) made the point that gambling advertising can not only help licensed operators differentiate themselves from the black market but also provides financial support for broadcasters and sport. Introducing a sense of balance similar to that employed by Lord Parkinson in the House of Lords, he confirmed that the Government is “committed to tackling aggressive practices” and “operators must advertise responsibly”.


Anyone wanting to delve deeper into the background to what will no doubt become a central theme of political debate following publication of the White Paper will find a wealth of material on the UK parliament website here (including a recent House of Commons Library Research Briefing Note entitled Gambling advertising: How is it regulated?).

You might also want to read:

  • Gambling Commission research entitled: ‘Understanding how consumers engaged with gambling advertising in 2020’ (published in June 2021) and

  • relevant material on gambling advertising available in GambleAware’s Research Library.

A is also for affordability

We know that the Government has been working closely with the Gambling Commission on the issue of affordability in the run-up to publication of the Gambling Act Review White Paper. In fact, Lord Parkinson said as much in the debate on 1 March that I mention above.

In my ‘Licensing Expert’ article for SBC News last month, I bemoaned the fact that no clearer indication has yet been provided with regard to the precise nature of the Commission’s current expectations on affordability checks. I suspect that its hands (or, more accurately, its lips) are tied until the White Paper is published.


In the meantime, all UK licensed remote gambling operators should take particular note of the recent Progress Play Public Statement published by the Commission on 17 May, in which the Commission states that the operator “did not conduct affordability assessments for individuals picked up by existing or new thresholds and triggers which indicate consumers experiencing harm (contrary to Paragraph 2(e) of the Commission’s updated guidance dated 12 May 2020)”. Bear in mind that paragraph 2(e) goes on to say: “Consider limiting or blocking further play until the checks have been concluded and supporting evidence obtained”.


That same Public Statement also identifies a failing to take account of an additional item of that ‘updated guidance’.


All of this clearly evidences that the Commission will hold remote operators liable not only for failing to take account of the 2019 Customer Interaction Guidance for Remote Gambling Operators but also for failing to take account of what it’s calling both ‘updated guidance’ and ‘strengthened guidance’, namely its Customer Interaction – Additional formal guidance for remote operators during COVID-19 Outbreak. That additional guidance remains in force even though pandemic restrictions have been lifted by the Government. That is clear from what I say next.


Even though the Commission’s most recent statistics (published on 26 April) confirm that “the overall headline problem gambling rate is statistically stable at 0.2%”, it made clear (when publishing operator data on 18 May) that it expects remote operators to:

  1. continue to follow thestrengthened guidance issued during the first lockdown, taking close interest in data that shows consumers expanding their portfolio of games and spending more time or money than before,

  2. interact directly where triggers are reached, in addition to their more generic email engagement,

  3. avoid any temptation to exploit the current situation for marketing purposes, in particular as consumers adjust back to a new normal and be very cautious when seeking to cross-sell products, and

  4. take particular care when on-boarding new customers and making decisions over affordability checks “which reflect the environment we are in”.

So my messages to UK licensed remote operators are:

  • Never mind the controversy caused by the absence of any consultation before those additional items of guidance were added in 2020 – be warned and check that the additional measures introduced by the Commission then are properly implemented into your customer interaction framework for the purposes of preventing gambling related harm.

  • Also, bear in mind that wholly new customer interaction guidance will be coming into force on 12 September 2022. We are promised by the Commission that will be published early in June, but you can start preparing already. See a summary of the new requirements on the Clifton Davies website here.

Finally, don’t leave it there. You should also digest all that is said in other Public Statements and Gambling Commission notifications regarding recent regulatory enforcement action, namely Jumpman Gaming and Goldchip Limited (both also on 17 May) and, if you haven’t done so already, Scout Limited, trading as Fanteam (during April), 888 and Sky Betting & Gaming (both in March). As always, there’s much to be learned from the mistakes made by others.

Source: https://sbcnews.co.uk/

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