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Gambling regulation: problem gambling and protecting vulnerable people

The Gambling Commission and government need to do more to ensure that regulation can protect gamblers effectively, according to a new NAO report.

There are an estimated 1.8 million ‘at risk’ gamblers and 395,000 ‘problem’ gamblers – including 55,000 children, some of whom are as young as 11.1

Gambling addiction can lead to mental health problems, relationship difficulties, large-scale financial loss and, in some cases, crime or suicide.

The NAO’s report looks at regulation of an industry which now yields over £11.3 billion2 for gambling operators every year. The Gambling Commission3, which regulates the industry, has annual funding of £19 million and almost all of it comes from licence fees paid by gambling operators. The Department for Digital, Culture, Media & Sport (DCMS) is the government department with overall responsibility for gambling policy and regulation.

The report concludes that while the Commission has improved regulation, there is much more it should do. It has increased enforcement against gambling operators that break rules, for example by revoking licences, and has also strengthened its rule book.4 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.

Even if the Commission makes these 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. Gambling regulation does not have features seen in other sectors, such as an ombudsman, and the way it is funded is not flexible meaning the Commission cannot change licence fees to respond to new risks emerging quickly from changes in technology and demand.

The report’s recommendations include that the Commission and DCMS 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. 

Gareth Davies, the head of the NAO said:  “Licensed gambling has grown by 57 per cent - £4.1 billion - 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.”

Full report:  Gambling regulation: problem gambling and protecting vulnerable people

Notes for Editors

Key facts

£11.3bn
total gross gambling yield (bets placed less winnings paid out) earned by gambling operators in Great Britain in 2018-19, excluding the National Lottery

57%
real-terms increase in gross gambling yield between 2008-09 and 2018-19 (excluding the National Lottery), mostly due to a large increase in licensed online gambling

395,000
Gambling Commission's estimate of the number of problem gamblers in Great Britain, of which 55,000 are aged 11 to 16

1.8 million
estimated number of at-risk gamblers, who therefore may be experiencing some negative consequences

£260m –£1.16bn
indicative range of extra costs to various public services estimated to be associated with problem gamblers

44%
proportion of online gamblers that used mobile phones to gamble in 2018, up from 23% in 2015

56%
estimated increase in gambling operators' spend on advertising and marketing from 2014 to 2017, mostly from increases in online and social media advertising

£19m
total funding for the Gambling Commission in 2018-19 (excluding its work on the National Lottery), almost all from licence fees paid by gambling operators

£19.6m
total value of financial penalties sanctioned by the Gambling Commission against gambling operators in 2018-19, up from £1.4 million in 2014-15

  1. Problem gamblers typically experience significant negative consequences from gambling, including addictive behaviour. The Gambling Commission estimates, based on bi-annual health surveys, that the number of adult problem gamblers is 340,000 , with research suggesting that around six additional people – such as friends, family and co-workers - are directly affected by each problem gambler.
  2. £11.3 billion - total gross gambling yield (bets placed less winnings paid out) earned by gambling operators in Great Britain in 2018-19, excluding the National Lottery.
  3. The Gambling Commission regulates gambling in Great Britain. All gambling operators must have a licence, and the Gambling Commission has powers to set licence conditions and codes of practice, and to monitor and enforce compliance with these. The total funding for the Gambling Commission in 2018-19 was nearly £19 million, excluding its work on the National Lottery.
  4. The Gambling Commission rule book is its Licence Conditions and Codes of Practice, the latest version of which was published in January 2020.
  5. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  6. The National Audit Office (NAO) helps Parliament hold government to account for the way it spends public money. It is independent of government and the civil service. The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether government is delivering value for money on behalf of the public, concluding on whether resources have been used efficiently, effectively and with economy. The NAO identifies ways that government can make better use of public money to improve people's lives. It measures this impact annually. In 2018 the NAO's work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £539 million.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

Channel website: https://www.nao.org.uk/

Original article link: https://www.nao.org.uk/press-release/gambling-regulation-problem-gambling-and-protecting-vulnerable-people/

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