The UK government must be careful not to drive British consumers to unregulated gambling markets by imposing overly strict constraints on regulated providers of online gambling services, experts in gambling licensing and regulation have said.
The government opened a new review into the Gambling Act 2005 earlier this month, outlining its intention to ensure that the legislation is "fit for the digital age".
The terms of the review are wide-ranging, addressing topics such as the protection of customers in an online setting, rules around gambling advertising, sponsorship and branding, the powers of the Gambling Commission, and the framework for consumer redress. The government is also seeking views on age limits and verification, as well as potential changes to laws applicable to "land based" gambling, from betting shops to casinos.
One specific area of regulation of online gambling being explored is whether to impose limits on the value of stake customers can place when gambling online. Currently there are no restrictions imposed in this respect, unlike with fixed odds betting terminals (FOBTs) in licensed bricks-and-mortar venues.
Audrey Ferrie
Consultant
The Gambling Commission already has very wide powers, and operators are often unclear on issues such as possible sanctions and the levels of penalty. Perhaps a process which is more structured might benefit all.
Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law, said: "Limits for FOBTs have already been introduced so similar measures for online products could receive support from regulators, NHS and safer gambling organisations. This may be more difficult to enforce in the online sector, however, and the concern might be that if regulated products are not attractive to consumers, they will seek other markets."
The government is also considering whether to bring video game 'loot boxes' within the scope of gambling law in Great Britain. A committee of MPs last year said that loot boxes that can be bought with "real-world money" and the contents of which are unknown at the time of purchase should be considered to be "games of chance played for money's worth" and regulated as such.
The government has invited views on the positive or negative impact of gambling sponsorship arrangements across sport. It highlighted the right of sports clubs and bodies to benefit from commercial deals but also identified what it called "growing public concern about the relationship between sport and gambling".
The role and powers of the Gambling Commission is also under scrutiny in the review, with the government seeking evidence on whether the body has "sufficient investigation, enforcement and sanctioning powers to effect change in operator behaviour and raise standards".
Ferrie said: "The Gambling Commission already has very wide powers. It is allowed considerable leeway in the manner in which it undertakes investigations, for example, and operators are often unclear on issues such as possible sanctions and the levels of penalty. Perhaps a process which is more structured might benefit all."
The review will also look at evidence on the action customers can take where they feel operators have breached social responsibility requirements, which include intervening to protect customers showing clear signs of problematic play, and ensuring children and young people are kept safe from gambling-related harm. The government has hinted that a new ombudsman service could be considered to facilitate easier consumer redress.
Christopher Rees-Gay
Senior Associate
It is hoped that, based on the evidence obtained, an appropriate balance between consumer freedoms on the one hand, and prevention of harm to vulnerable groups and problem gamblers on the other, will be struck.
Ferrie said: "The government must be careful to ensure that any new consumer redress mechanism avoids introducing an obligation on operators to compensate consumers without consideration of matters such as contributory negligence and duty of care."
The deadline for responses to the government's call for evidence is 31 March 2021.
Christopher Rees-Gay of Pinsent Masons said: "The 'call for evidence' is diverse and far reaching, with some 45 questions being posed. The drive is clear in that the government is seeking ‘evidence’ which is key to ensure that any changes to the Gambling Act 2005 are evidence based and appropriate. A key theme is the drive for ‘customer protection’ and whether there is a need for greater controls to prevent gambling harm. It is hoped that, based on the evidence obtained, an appropriate balance between consumer freedoms on the one hand, and prevention of harm to vulnerable groups and problem gamblers on the other, will be struck."
UK digital secretary Oliver Dowden said: "Whilst millions gamble responsibly, the Gambling Act is an analogue law in a digital age. From an era of having a flutter in a high street bookmaker, casino, racecourse or seaside pier, the industry has evolved at breakneck speed. This comprehensive review will ensure we are tackling problem gambling in all its forms to protect children and vulnerable people. It will also help those who enjoy placing a bet to do so safely."
The launch of the review by the government follows the stiffening of the regulation of gambling in some areas in recent times, notably the introduction of a ban on the use of credit cards to fund gambling, as well as tighter age verification checks, and reductions on the maximum stake that can be placed by users of fixed odds betting terminals.
Last month, the Gambling Commission opened a consultation on the potential introduction of additional requirements remote gambling operators would need to meet to identify customers at risk of harm and intervene. That consultation is open to feedback until 12 January 2021.
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