Since my last " Licensing expert »For SBC News, the most notable gambling regulatory issues in the UK were the circumstances leading to the April 20 Independent Review Announcement the collapse of the Football Index and (b) sudden unexpected Neil MacArthur's resignation as CEO Gambling commissions within days of the Football Index license suspension. You can read here full details of what led to this suspension and everything that has happened since then.
The statement above states that an “independent expert” will (a) review and (b), in addition to establishing how the Football Index collapsed and identifying lessons to be learned from it, review the decisions and actions of the Gambling Commission with a view to publicizing the results. in summer. These findings will also form part of the evidence for purposes of government review of the Gambling Act 2005 in relation to the White Paper, outlining findings and proposals for reforming the Act, to be published by the end of this year.
The official line seems to be that Neil MacArthur's immediate resignation was not "linked" to the suspension of Football Index's license, despite the fact that it was only three days between the two events and the regulator had to hastily push forward two of them. to the position of acting general director.
Actually, hunt to replace the CEO started only recently, and even then it will only be for the "temporary" holder of the position. with a fixed contact period of only 19 months. This is because the appointment of a permanent replacement will not take place until the new chairman of the Gambling Commission replaces incumbent President Bill Moyes later this year. As a result, began hunt for chair replacement ... In general, this is an disadvantageous position for the regulator when faced with calls from parliamentarians and others to completely repeal it on the grounds that, according to the APPG regarding harm related to gambling, it is “not fit for purpose” or As the Committee described it in House of Commons government accounts, it is "a sluggish, toothless regulator who does not seem to be very interested in the harm it can mitigate, nor in the means it can use to do it."
Personally, I dispute any suggestion that the Commission or its leadership is not interested in harming gambling. Based on my own relationship with MacArthur throughout his tenure on the Commission, I strongly believe that he genuinely wanted to mitigate the harm associated with gambling and, in his words, allow British consumers to "enjoy the most fair and safe gambling in the world."
In terms of accomplishments in his three years as CEO, the various measures to tighten consumer protection introduced by the Commission while he was in charge are too many to list, but I am very concerned that a careful balance is needed between (a) protecting vulnerable people and their families from the harm associated with gambling; and (b) giving people freedom to choose how they spend their own Money has now shifted too much in favor of the former at the expense of the latter. The current debate about accessibility is an obvious example of this.
I also can't help but feel that the Commission, and with it and its Chief Executive Officer, seem to have become more 'distancing' from the industry than they have been before. To some extent, this could be a consequence of a pandemic or the fact that the Commission had a lot to deal with, but whatever the reason, it would be nice to see a closer working relationship between regulators in the future. and is governed by the same spirit of “collaboration” that MacArthur has maintained throughout his tenure as CEO
... An independent review of the Football Index crash will rightly focus on its business model (which has been dubbed both a "virtual stock market with real money" and a "betting platform" that "should not be seen as an investment vehicle"), it is worth noting that in an update statement released on 20 March, the Commission stated that it “determined that the product contains elements that are betting in nature and therefore are regulated by us as gambling, as well as elements [that] that are not considered gambling and are therefore not subject to our regulations. this is ".
It is not yet clear whether the identification of a question mark over the relevant regulatory framework took place until 30 years ago in May last year, when the official verification of the operating license began. The 'independent expert' conducting the audit will undoubtedly want to investigate this, along with the recommendations the Commission has since received from the rates specialists, the 'forensic financial accountant' and the 'external quality control specialist'
Complaints have also been filed about the fairness of the Football Index terms and conditions. This is an important consideration, not least because of the second of the three licensing purposes under the 2005 Gambling Act, namely "Ensuring fair and open gambling." In support of this goal, the LCCP requires TS&C UK license holders not to be unfair under the Consumer Rights Act 2016. Likewise, changes to their T&C must be fair and transparent under the same legislation. So was the Football Index T&C unfair?
These TSiPs have definitely listed the main risks that their clients can face while gambling. ... These proposals included warnings that the football index dividend table would change from time to time, that any change in dividends could affect stock prices, that the basis on which dividends are paid could change, and that there is no guarantee of winning. specific amount of dividends at rates. While TKiP referred to a dividend cut that was only allowed in January and June of each year, Football Index's right to do so at other times was expressly reserved, including "in exceptional circumstances to protect [its] business." On the evidence, Football Index appears to have given its clients the necessary advance notice of its dividend restructuring plan, which was intended to "ensure the long-term sustainability of the platform." Unfortunately, this has had the same detrimental effect on stock prices that buyers have been explicitly warned about.
From a contractual standpoint, the question of whether Football Index customers have any right to compensation for any damages under all of the above circumstances may be theoretical now that the business is administered by the administration. Time will tell.
A separate point to keep in mind with respect to complaints from some that the Commission should have done more to protect client funds from the outset is that the Commission (s) will consider, at the stage of license application, the overall viability of what was then the proposed Football Index business, and (b) it will be possible to conduct further investigations at this stage if it appears that the applicant's available resources were insufficient or not adequately secured. However, after that time, it will not be held liable in any way under the Gambling Act 2005 to conduct an ongoing assessment of the solvency of BetIndex Limited, the company that operated the Football Index business.
Instead, when an operator has granted its operating license, the License Terms and Codes of Practice (LCCP) of the Gambling Commission require it to report as a “key event” certain prescribed metrics that could potentially indicate an increase in financial problems; this could lead to some regulatory intervention. The LCCP also requires operators' TK&P to include information about their mechanisms to protect customer funds that they own in the event of operator insolvency, the level of this protection and the ways in which it is achieved. In addition, remote licensees are required to keep customer funds in a segregated account and report customer funds to the Commission as part of their overall quarterly regulatory reporting.
Simply put, this is all about protecting customer funds currently in terms of UK gambling regulation, and the Gambling Commission has no greater responsibility than ensuring that its licensees comply with these rules.
It remains to be seen whether the Football Index controversy (or a "scandal" like Caroline Harris, as the APPG chairman of the game against gambling harm called it) will lead to tightening restrictions, requiring operators to provide more protection for customer funds in the future. I would not be surprised if this happens.
In the absence of Neil MacArthur, everything fell on Tim. Miller, executive director of the Commission, will speak at the conference on March 30. Entitled ' Moment for impulse ", The speech did not specifically refer to the Football Index, but it served as confirmation that" in the coming fiscal year "the Commission will" look "to the defense. customer funds "both in terms of our own rules and to inform any advice we can give regarding the broader legal framework through a review of the Gambling Act."
Miller's speech also makes it clear that despite MacArthur's departure, this will largely remain "business as usual" at the Gambling Commission. His exact words (which may or may not hide thoughts of Football Index) were: “We will continue to look for ways to collaborate with others, including operators, to make progress, as we have successfully done over the past. a couple of years. And we continue to focus on prevention by default, with the goal of ensuring that things go well in the first place. But we will also intervene if something goes wrong and the operators do not meet the standards that we, their customers or the general public expect. We will not move at the slowest pace. We will not use any positive data to remove the gas pedal. We will not be distracted from pressing issues and risks by long-term political debate. We will continue to build momentum. "
But that's not all
The last month or so has not been devoid of other very important events. In short, they included the following.
Despite concerns expressed over its enforcement responsibilities in the Football Index case, the Commission has imposed severe sanctions on both online and ground-based operators for AML and social responsibility deficiencies. Penalties in the amount £ 6 million and £ 3.4 million were imposed on two online operators, and financial fines exceeding £ 1.3 million were imposed on five operators of land-based casinos. The Commission also published its three-year corporate strategy and annual business plan and encouraged online operators to continue extra vigilance.
Subject to compliance requirements, I draw attention to the High Court decision of April 8 in the case Andrew Green v Petfre (Gibraltar) Limited t / a Betfred, as a result, all licensed remote gambling operators in the UK must carefully consider whether they urgently need to rethink their terms of business.
GambleAware and YGAM published the evidence they submitted in response to the government's request for evidence regarding the revision of the Gambling Act. , the first calls for a mandatory tax on RET, and the second for the industry to "do much more to protect consumers."
GambleAware also posted new ones intermediate research results conducted between July 2018 and June 2019 by the National Center for Social Research regarding gambling habits close to 140, 03 online gambling account holders in the UK, (b) published a report titled “ L I with lids on loot boxes. Video Game Shopping-Driven and Gaming and Gambling Convergence »Link research. Ween video games 'loot boxes' and gambling problems and (c) released their annual UK Treatment and Support Report based on a survey conducted by YouGov on its behalf to examine the use of treatment and support services among players as well as those affected by other people's gambling.
With regard to other academic research, (a) a study titled “ Prioritizing research on play-related harm "- conducted by the Institute for Policy at King's College London on Harmful Gambling, found that, compared to other countries such as the United States, Canada and Australia, there is relatively little research done on gambling harm in the UK, and (b ) a study entitled " Nudge versus sediment on gambling warning labels "Concluded that the way that online gambling operators submit information about risky gambling in accordance with the technical standards of remote gambling and the Gambling Commission software is" ineffective and too difficult to find. "
The Betting and Gambling Board has followed closely the revision of the Gambling Act 2005, (a) the publication by EY of an Economic Impact Assessment Report entitled “ Economic contribution of the betting and gambling sector »And (b) producing video for work that a UK licensed industry does to protect under - 19 year olds.
Continuing on the UK gambling reform, () Christopher Snowdon, Head of Lifestyle Economics, Institute of Economics, in the IEA's Current Controversy article, entitled “ A safer bet - gambling and over-regulation risks "And (b) the Social Market Fund in its recently published report entitled" Twice or nothing? Assessing the Economic Impact of Gambling ".
Finally, Camelot fulfilled six months ahead of schedule the government's decision to attract 18 to 19 minimum age to participate in the National Lottery.
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David Clifton - Director - Clifton Davies Consultancy Limited
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