UK LEGAL COMMENT
Gambling
Ombudsman – Q&A G
etting behind proposals first raised by then Deputy Leader of the Labour Party Tom Watson in June 2019, the Betting and Gaming Council has called on the Government to establish a gambling ombudsman. It proposes that it
should be a legal requirement for all licensed betting and gaming operators to sign up to the ombudsman service, which would be “a step forward in consumer redress”. In June 2020, the Gambling Related Harm All Party
Parliamentary Group (APPG) supported the ombudsman proposal and, building on this, the Lords Select Committee considered the proposal in detail and also decided to recommend (in its July 2020 report) the creation of an ombudsman. In its response to this report, the Government stated that it would “consider the evidence on the suitability of the current redress arrangements, and the benefits and disadvantages of any alternatives”. This is fairly non- committal but compared to its rejection of other proposals from the Lords, indicates that the Government is open to this course of action.
Whilst the Gambling Commission had a particular focus on the second licensing objective (ensuring gambling is conducted in a fair and open way) for a period a few years ago, it has more recently devoted much of its time to AML and safer gambling issues. Handing some powers in relation to this objective over to an ombudsman could be seen as desirable by the Government, as it would allow the Commission to focus its resources on a narrower remit.
Northridge Law’s Melanie Ellis looks at the potential issues for UK gambling with the potential arrival of an ombudsman for the industry
Overall there seems little dissent to the creation of a gambling ombudsman, so even before the BGC’s press release it seemed fairly likely to be adopted as part of the Government review. The BGC may be preaching to the converted, but a lot of questions remain about what a gambling ombudsman would look like in practice. I have attempted to address some of these below.
What is an ombudsman?
An ombudsman is an independent body put in place by the Government or an industry to investigate and adjudicate on complaints made by consumers of a particular service. Ombudsman services are often available for consumers of “public” services such as energy or rail travel, but are also in place for consumers of financial and legal services, for example. The Lords Committee recommended that a gambling ombudsman be modelled on the Financial Ombudsman, which is used by over a million consumers per year.
What powers would it have?
Typically, an ombudsman’s decision will be binding on a company if accepted by the consumer, however if the consumer rejects the decision they will still be able to make a legal complaint. For example, a gambling ombudsman might determine that the gambling operator should return a customer’s losses in circumstances where it considers the customer was treated unfairly. However, if the ombudsman adjudicated in favour of the operator, this is unlikely to remove the ability of customers to sue the operator for the return of their losses. This is the case with the Financial Ombudsman – following an appeal from either side where the ombudsman looks at the case afresh, the decision is legally binding on the provider but the consumer can still take the case to court. Operators’ compliance with the determinations of the ombudsman would likely be required either by the legislation creating the service, or by a licence condition. A gambling ombudsman is unlikely to be given the power to fine operators (that would remain the role of the Gambling Commission), however, in line with the powers of the Financial Ombudsman, it may be given the ability to award compensation for distress and inconvenience, in addition to e.g. refunding losses. This would serve as an incentive for operators to settle disputes before they reach the ombudsman.
An ombudsman can also play a role in identifying and reporting on systemic issues in an industry. Potentially, a
22 JULY 2021
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