UK LEGAL COMMENT


thing we do know about Sunak is his love for figures, spreadsheets and detail. It would be a reasonable guess that, before approving the draft proposals, he will want to conduct a thorough assessment of the implications for public finances. One of the anticipated features of the White Paper, of which Rishi Sunak will surely approve, is new powers for the Gambling Commission to requisition and analyse additional data from operators. Not waiting for the lead from the legislators, improving the way it gathers and uses data is something the regulator is already taking forward, working on changes to the way it gathers data in its surveys on gambling participation. These changes have been in progress for some time, but were perhaps expedited by the questioning of Commission CEO Andrew Rhodes by the DCMS Committee in June this year, when the subject of ‘what metrics are used to assess whether efforts to reduce gambling harms are working’ came up. The comment by the Committee’s Chair that “there is nothing there to say that what you are doing as an organisation has made a blind bit of difference to the public good” would certainly have incentivised the Commission to increase their pace of work in this area. A recent blog post by Simo Dragicevic, a new member of the Commission’s Digital Advisory Panel (DAP), gave some interesting insight into future developments in the use of data by the regulator. The role of the DAP is to advise the Commission on ways to manage the risks emerging from new technology, in particular how emerging trends in the gambling market might affect consumers. Simo discusses two key ways in which the Commission could use data to improve its regulation: firstly to assess the effectiveness of the regulatory requirements it imposes on operators and, secondly, to assess a greater amount of data from operators. In his post, Simo notes that better and faster evaluation of


policy changes is needed, so that the Commission can understand the impact of past interventions, before making new changes to gambling regulation. In recent years, gambling policy has followed the “precautionary principle”, as recommended by the Responsible Gambling Strategy Board. This involves taking preventative action where there is good reason to believe significant harm may be caused, without necessarily having evidence of the exact nature and extent of that harm and/or impact of the proposed intervention. It seems very reasonable that the precautionary approach should be joined by a follow-up review of whether the action taken was in fact justified. Advocating for this approach, Simo gives as an example the “sunset clause” in alcohol minimum pricing policy in Scotland, which requires a Parliamentary evaluation of the effect of a new minimum price of 50p for a unit of alcohol, if the policy is to continue in place after five years. Whilst we cannot necessarily expect “sunset clauses” to be built into future gambling regulations, proper evaluation of regulatory interventions can only be of benefit to all stakeholders. Ineffective or disproportionate regulations not only harm the gambling industry, but also risk vulnerable consumers moving to black market operators without any balancing benefits. It seems unlikely the Commission will be able to go back and review the impact of past changes such as the credit card ban, reversing them if they are found not to have reduced gambling harm, however we might see future


adjustments to interventions like stake limits and minimum spin speeds, if a proper analysis of their impact can be made. When it comes to data the Commission gathers from


operators, Simo discusses the potential benefits of increasing the regulator’s capacity to make use of this. He believes the Commission could engage in “pro-active data-driven regulation”, by carrying out more targeted assessments and interventions based on information it receives from licensees. One suggestion is that the Commission could compare the risk profiles of operators to see whether player behaviour and risks differs, to identify where action might be needed. This would involve operators providing the Commission with information about their risk models, risk exposures for different products and players, and the proxies of harm they use. Targeted intervention may reduce the amount of compliance activity that is needed, but with this granularity of data there is a risk that the Commission will begin to apply additional expectations to all operators, based on what it has seen from some. This is not necessarily unreasonable, however the Commission has a track record of applying regulatory expectations that have not (yet) been set out in the LCCP, regulations or guidance. For example, in recent regulatory action it criticised the operator of the Betfred brand for not having controls in place to prevent large levels of high velocity spend by new customers. This is something the Commission has seen and approved of in some operators’ policies and procedures in recent assessments, but is not (and was not at the time of the relevant Betfred activity) a regulatory requirement. These changes to the way the Commission gathers and


uses data do not necessarily require new legislation. The Gambling Act does not set out or restrict the information the regulator can request from operators, so (assuming any data protection issues are addressed) the Commission can make changes to the data it gathers in regulatory returns. The Commission recognised in its 2022-23 business plan that it would need to invest significant sums to source specialist advice and staff to support its data strategy, with £1.1m set aside for this. We can therefore expect the changes recommended by Simo to happen gradually over time, as the Commission builds it capabilities in this area.


Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products.


Melanie has a particular interest in the use of


new technology for gambling products and novel product ideas.


NOVEMBER 2022 33


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