Gambling Commission is “a small regulator in a huge and fast-evolving industry”, warns spending watchdog

Even if the Gambling Commission were to make recommended improvements, it is “a small body that is unlikely to be fully effective in regulating a challenging and fast-changing industry within the current system”, the National Audit Office has warned.

In a report, Gambling regulation: problem gambling and protecting vulnerable people, the spending watchdog said gambling regulation did not have features seen in other sectors, such as an ombudsman, and the way it was funded was not flexible meaning the Commission could not change licence fees to respond to new risks emerging quickly from changes in technology and demand.

The NAO said the Gambling Commission and government needed to do more to ensure that regulation could protect gamblers effectively.

Its report said there were an estimated 1.8 million ‘at risk’ gamblers and 395,000 ‘problem’ gamblers – including 55,000 children, some of whom were as young as 11.

The NAO acknowledged that the Commission had improved regulation, but warned that there was “much more it should do”.

The spending watchdog said: “It has increased enforcement against gambling operators that break rules, for example by revoking licences, and has also strengthened its rule book. But it needs to do more to incentivise operators to raise standards and be more systematic and detailed in recording and analysing information about gamblers to plug gaps in its knowledge.”

The report’s recommendations include that the Commission and the Department for Culture, Media and Sport should:

• Be more strategic about getting gambling companies to better protect people. “This could include incentivising companies to do more to make gambling safer beyond meeting minimum requirements”.
• Ensure gamblers are aware of services to resolve disputes, and review whether these arrangements are working effectively.
• Review how regulation is funded so they can keep pace with a fast-changing industry. 

The report also called on the Gambling Commission to enhance its analytical capability to better identify consumer harm and make greater use of the intelligence it has available. “For example, it could develop a more systematic and detailed approach to recording and analysing information from consumers who make contact.”

The Commission should also consider how it can work with other organisations such as local licensing authorities and dispute resolution providers to plug gaps in its current intelligence base.

The NAO report noted how the Commission relied on local licensing authority inspections for intelligence on licensed gambling premises. These inspections helped the Commission to understand how national operators’ policies, such as on self‑exclusion or staff training, were implemented in practice.

However, there was considerable regional variation, with 119 authorities not conducting any inspections in 2018‑19 and around 60 not conducting any for the past three years, the NAO pointed out.

The Commission’s data also showed that over the past nine years, 89% of inspections were pre‑planned and the operators knew they would happen in advance, the report added.

Gareth Davies, head of the NAO, said: “Licensed gambling has grown by 57% - £4.1bn - over the last decade mainly due to a massive increase in online and smartphone gambling. The risks to gamblers are changing as technologies develop.

“Yet the Gambling Commission is a small regulator in a huge and fast-evolving industry. While the Commission has made improvements, gambling regulation lags behind the industry. The Commission and government need to work together to ensure that regulation keeps pace with the risk to gamblers.”

A spokesperson for the Gambling Commission said: "We welcome the NAO’s report and are pleased it recognises our work in making gambling safer. We agree with the report’s assessment that we face the significant challenge of regulating a dynamic and developing industry. It also underlines the constraints that our current funding arrangements presents and we are developing proposals to discuss this with DCMS.

“Everyone at the Commission is absolutely committed to drastically reducing gambling harm and work hard every day to make the maximum impact for the greatest amount of consumers within the resources we currently have. In addition to a programme of tougher enforcement and compliance activity, in the last two years we have strengthened protections including online age and ID verification, customer interaction and most recently we banned gambling on credit cards. We are currently pushing the industry to focus on poor VIP practices, advertising technology and safer game design.”