Public confidence is key to growth and innovation in the gambling industry

January 15, 2013 — Culture

Philip Graf

Chair of the Gambling Commission

As we call for evidence on problem gambling, Philip Graf, Chair of the Gambling Commission, reflects on what the gambling industry – and the regulator – can do to enable responsible growth

Gambling as a leisure activity poses diverse, fascinating policy challenges. Politics, economics, technology and neurochemistry all feed in, as you can see in the DCMS Select Committee report on gambling and today’s comprehensive response from the Government.
As a relative newcomer to the debate, what strikes me is the extent to which contributors concentrate on well-worn arguments for small relaxations of hard regulatory boundaries like stakes and prizes, or numbers of machines, and not on the core dilemma the Committee was dealing with.
That dilemma is how to be confident that the gambling industry will grow and innovate but provide entertainment responsibly, without undue risk to the public?
jackpot image by alxhee on flickr

A sceptical public

The key message I took away from the inquiry is that opportunities for growth and innovation depend on the gambling industry demonstrating – and convincing the public – that it is genuinely committed to keeping crime out of gambling, keeping it fair and protecting its customers from harm.
At best the public remains deeply sceptical about the industry’s willingness to restrain their pursuit of profit to ensure their gambling provision is socially responsible. While that doubt exists, any hope of meaningful ‘liberalisation’ (a term now with pejorative implications in the minds of those concerned about problem gambling) is probably unrealistic.
So what to do? In my view, to build confidence and unlock the opportunities, both for growth and for innovation that provides a greater range of safe gambling options the industry must take full ownership of the licensing objectives in the Gambling Act 2005.

Industry must take responsibility

Too often I hear executives from gambling companies or trade associations talk about ‘the Gambling Commission’s licensing objectives’ as if keeping crime out of their product and keeping it fair and safe is somebody else’s problem. It’s not. If the industry wants to make further progress it must embrace the licensing objectives and embed them as part of its corporate DNA. When planning new products or strategies we need to hear the right questions being asked throughout the organisations:

“How will this impact on our more vulnerable or at-risk customers and how can we mitigate that impact?”
“What will this mean for our ability to stop our business being exploited by criminals?”
“Is what we are proposing to do fair?”
“Will our customers understand it?”

High-stake machines are an area of gambling above all others where these arguments play themselves out most starkly. There is serious and widespread public concern about the safety of those people who, for whatever reason, are not able to enjoy gambling safely. This concern is shared by the Commission, but it must be balanced with recognition that gambling is fun for most people, is an integral part of our culture and brings economic benefits to Great Britain. Yet with the industry more engrossed in stake and prize levels, paying little apparent attention to legitimate wider concerns, unsurprisingly little progress is made.

Data is the key

The industry now needs to step up and ask itself a challenging question – “what harm might my products cause and how can I mitigate that harm?” It should be demanding better data on gambling-related harm and analysis of associated player behaviour. And there are grounds for optimism here, with a pledge from some of the larger betting and arcade operators to make data available for the Responsible Gambling Trust’s high stake machines research programme. However, many others still see data, evidence and evaluation as more of a threat than an enabler.
Working together cooperatively to achieve a safer playing field, the industry could free itself from blanket measures, like stake and prize regulation, which hamper creativity. Society could then benefit from a wider range of products for responsible gamblers and there would be more protection for those at risk. If the gambling industry can better demonstrate that it can deliver the licensing objectives, it might just find itself trusted to trade with a less intrusive, smaller (and cheaper) regulator.

A new landscape for regulation

Finally, it seems to me gambling is being treated by a younger, more media-savvy generation as just another form of media-based entertainment alongside TV, video games, film, music, digital publishing. This has two main implications for how we deliver and regulate gambling in the UK.
Firstly, the gambling industry must take ownership of the licensing objectives and deliver its gambling products responsibly, while continuing to grow and innovate. No-one should expect to rely on established business models – many in the gambling industry understand this and are seeking to adapt but are hampered by the regulatory framework which reflects public concern about potential risks from growth in gambling provision; many are not and are lobbying instead for the status quo to be protected. That is not a sustainable or desirable position.
The second is for the Gambling Commission, whose role is to provide assurance to the public and to Parliament that gambling is being delivered fairly and safely. In the digital world the economies of scale and lack of physical boundaries make marketing and promotion, areas policed by other regulators, critical to success and growth – so close working relationships with other regulators here and overseas are essential. To date we have invested significantly in partnerships with local authorities in terms of land-based gambling, we have strengthened our relationship with Ofcom, the ASA and others through joint working on a number of issues around advertising, marketing and gambling and we are building strong working relationships with other gambling regulators internationally.
No one is pretending any of this is easy, but the Commission, the gambling industry and the Government each have a role to play in ensuring that gambling, as a key leisure activity in an innovative growth market, is fair and safe.
Best wishes for a happy, safe and prosperous New Year.

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