Why is gambling reform happening and how do plans tackle addiction?

The Guardian

The government’s white paper outlining proposed reform of gambling regulation runs to 268 pages, addressing almost every aspect of the £10bn-a-year British betting and gaming industry.

Most of the measures are far from final, with the finer technical points subject to a year-long consultation process due to begin this summer. But the proposals offer fascinating insight into how gambling might look in the future and why the review was needed.

Why is it happening?

Laws governing gambling in Great Britain – Northern Ireland has a different regime – were passed in 2005 and implemented in 2007. Between those two dates, the first iPhone hit the market, an invention that transformed the way people gamble.

Since then, online casino and sports betting revenues have soared, with regulation failing to keep pace. The result, say campaigners and MPs, has been that vulnerable people, addicts and children have been exposed to high-octane gambling products. The review follows a string of high-profile cases involving financial ruin, depression and even suicide, as well as multimillion-pound fines for misbehaving firms.

Will the reforms

The government wants to impose “affordability checks”, with two degrees of severity. Under the proposals, if a punter were to lose £125 in a month or £500 in a year, gambling firms would have to perform low-level checks, such as searching to see if a customer has suffered a bankruptcy. If a punter loses £1,000 in a day or £2,000 over 90 days then tougher checks would be triggered. Those thresholds could be halved for 18- to 24-year-olds.

The government estimates that only 3% of gambling accounts would be subjected to these enhanced checks, which could in theory be performed without the customer knowing, using data from credit rating agencies. But customers may be asked for information such as payslips if the check raises concerns. The gambling lobby has fought furiously against such “intrusive” checks as standard.

Another measure aimed at stemming losses is a cap on online slot machine stakes. This will be set at between £2 and £15 but, like affordability checks, limits will be lower for 18- to 24-year-olds, potentially capped at £2. The Gambling Commission will lead a consultation on affordability checks while the Department for Culture, Media and Sport (DCMS) will decide on slot machine limits.

Betting operators will be subjected to a mandatory levy, replacing the current voluntary system, to fund gambling addiction research, education and treatment. It was thought that this would be set at 1% of revenue, which would raise more than £100m a year. However, DCMS will consult on the right level for the levy.

The Department of Health and Social Care will assume responsibility, alongside DCMS, for public messaging about gambling harms, which is now left up to the industry and the charity GambleAware. This could result in much more severe warnings, as opposed to heavily criticised slogans concocted by the industry, such as “When the fun stops, stop” and “Take time to think”.

It could become mandatory for customers to set deposit limits on their online accounts, or require them to opt out of such caps.

Yes and no, but mostly no. There will be no new restrictions on the volume or content of gambling adverts, with the industry instead encouraged to sharpen up controls designed to divert ads away from vulnerable people and children.

However, direct marketing, such as emails and texts offering “free” spins and bonuses, could be strictly curbed. The white paper criticised misleading descriptions such as “free bets” and hinted at a crackdown on “re-wagering” requirements, where punters who receive a “bonus” free bet are required to make as many as 50 more bets within a tight time limit before they can cash out.

There are likely to be restrictions on such marketing, which could become “opt in” only. The DCMS said 35% of people with a gambling problem receive daily incentives to gamble, while only 4% of other people do.

Any other measures?

The Gambling Commission will get more resources to crack down on bad behaviour by legitimate firms and go after parallel market operators. There will also be a new gambling ombudsman, to help resolve disputes where punters say they have lost money because of a company’s social responsibility failings.

Land-based casinos will be allowed more machines, will be able to offer sports betting and give credit to “high-roller” customers.

Another under-reported measure is work, already under way, to make operators share data so that a gambling addict banned by one firm can’t simply go and bet with another. There are also likely to be new restrictions on the design of gambling games to slow them down and remove features known to foster addictive behaviour.

When will it happen and will it hurt gambling firms?

There is a year-long consultation on most of the proposals, infuriating some campaigners, but the government says most measures will be implemented by summer 2024.

The white paper estimates it could cost betting firms £800m a year. However, shares in the sector’s leading players rose on Thursday, as investors breathed a sigh of relief that measures weren’t tougher.

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