November 17, 2023
Andrew Rhodes has done some good things since his appointment as CEO of the Gambling Commission in 2021 and really deserves some credit. There. I said it.
He took the helm at a regulator at a time when it: (a) had battened down the hatches and was avoiding engaging with industry stakeholders and, in particular, those it regulated; (b) was creating regulation on the hoof without having full regard to its own responsibilities, following due process or making an evidential case for the changes it was introducing; and (c) was under fire from all quarters including politicians, the media, punters, problem gamblers, operators, lobbyists and, worse still, industry lawyers(!).
Mr Rhodes’ recent speech to the CEO Briefing on 8 November 2023 (in full here) gave him a chance to summarise where his organisation has got to and, more importantly, where it is going under his stewardship. The speech triggered a pause for thought as to how much Mr Rhodes has turned the needle on (a) to (c) above and how much credit he now has in the bank.
Dealing with the needles in order, let’s start with (a) – aka “Engagement”.
Mr Rhodes has been very visible from the get-go – meeting with stakeholders across the sector and, in particular, engaging with operators around best practice outside of the adversarial confines of regulatory enforcement action. The Commission has been more visible at industry conferences, in creating forums, in board rooms and even on twitter (albeit even Mr Rhodes eventually gave up tweeting on his personal account in the face of a pretty ugly and relentless torrent of anti-gambling sentiment). Mr Rhodes has shown himself to be prepared to speak and to listen.
In August, he went further and called out what he viewed as the continuing misuse of gambling statistics as part of the ongoing White Paper debate. Jason Chess wrote at the time (see here) that “the Commission must be objective in its own use of statistics (including in current and forthcoming consultations) and look to hold outliers on both side of the fence to account” and, on the latter point, Rhodes has been as good as his word – even being critical when quizzed by a Select Committee of the use by anti-industry lobbyists of seemingly baseless gambling suicide statistics. On the other hand, the CEO has continued to lean heavily on the 2021 Health Survey for England to support his stated and much disputed 0.8% problem gambling rate for over 16s at the same time as Tim Miller, one of his charges, was tiptoeing away from reliance on that dataset in front of the same Select Committee.
Mr Rhodes told the CEO Briefing that “the Commission is committed – where possible – to a more supportive, transparent and grown-up relationship with any operator that is committed to their compliance and open to working with us……. Compliance is non-negotiable and having a better relationship, a more constructive mutual relationship, does not mean standards drop. It can mean, however, we navigate difficult things in a better way and that is very much my intention.”
Laudable, difficult to argue and there are absolutely positive signs. The last sentence, however, hints at an acknowledgment that this remains a work in progress – in our experience the rhetoric at the top isn’t trickling down the corridors in Birmingham – compliance assessments have at times quite rightly spotted failings but also often involve statements of Commission expectations which simply aren’t backed up by underlying regulation and at times feel akin to a Chinese burn in the playground. Overall, however, there is meaningful progress.
Walking into the Gambling Act review from outside the industry was never going to be easy. The Commission had already spent some years seeking to raise standards through a combination of both aggressive enforcement action not hitherto seen globally in the sector and dizzying changes to the LCCP and related guidance which at times didn’t even pretend to jump through the necessary procedural hoops – enhanced COVID-measures anyone?
As part of the announcement of the legislative review and the subsequent publication of the White Paper, both the Government and Mr Rhodes have continually emphasised the need to consult, listen to all sides of the argument and deliver evidence-led regulation striking the balance between freedom for the ordinary punter and protection for those at real risk.
As we have noted previously, the vast majority of the regulation which will emanate from the White Paper will be introduced by the Commission (via the LCCP) and not the Government (via legislation). One has to hope that Mr Rhodes will be true to his word in terms of the output on the very many consultation processes – the fait accompli which was the consultation on “Regulatory Panel Reform” started in 2021 wasn’t confidence boosting in that regard – the Commission put forward 4 proposals. The majority of respondents disagreed with all 4, yet the Commission indicated it would proceed nonetheless.
The rather public spat between Mr Rhodes and the Racing Post on financial vulnerability hints at what could become the acid test of balanced regulation. Mr Rhodes noted to the CEO Briefing that “I worry quite a lot at how what the Government actually said and what the Commission actually consulted on has been lost in the noise of worry and disagreement. Both I and the Secretary of State have reiterated that financial risk checks would only be tested, trialled or rolled out when there are credible, practical tools available for frictionless checks. How the Commission and the industry now work together to work to deliver a solution that really does achieve the outcome Government wants, will now be critical.” Our concern is that in the heat of the “battle” on what the checks comprise and at what levels they are undertaken, precious little is being said about what operators need to do with the information garnered. A missive to consider the same alongside all other information and take action “appropriately” won’t feel like much of a change to the existing and largely subjective battle grounds.
Mr Rhodes’ stated intentions are sound enough but the proof will ultimately be in the pudding.
Of the three needles, this is undoubtedly the hardest for Mr Rhodes to move. The majority of the anti-gambling lobby won’t be sated regardless of the level of changes made and gambling will likely remain a political football and a headline for the Daily Mail.
The engagement piece has helped with the industry perception of the regulator as will the “you know we’re just effecting the Government wishes” mantra already being highlighted provided (and it isn’t a small proviso) the Commission are there or thereabouts on the regulation piece and don’t overstep the mark.
But Mr Rhodes’ speech also hinted at further battle lines being drawn.
Mr Rhodes stated to the CEO Briefing that The Regulators’ Code (which the Commission obliged to have regard to under the Legislative and Regulatory Reform Act 2006) “is just seven pages and contains a number of very sensible guiding principles for Regulators, but it is meant to be just that – a sensible set of guiding principles – it does not try to cover the exact application of regulation in all circumstances…..The Regulators’ Code stresses throughout that growth must come when the business is compliant, not instead of it…… The Regulators’ Code requires the Commission to take an approach to regulation which is based on risk. This does not mean ‘no risk’ or ‘zero tolerance’.”
The seemingly purposive adherence to the Regulators’ Code is unlikely to be replicated by the Commission when it assesses compliance by oeprators against its own often vague and unhelpful guidance. There are also signs of the Commission not understanding what a risk based approach means at all. The industry is entitled to feel sometimes like its regulator is going further than a risk based approach would permit – see Steve Ketteley’s thoughts on the conflations of AML and responsible gambling in the context of the Commission’s expectations around gathering customer occupation – see here – or Patrick Rennie’s musings on the Commission seemingly wanting to outlaw soft opt-ins on direct marketing in a manner which goes far beyond the limits set by data privacy legislation – see here
Finally, little attention was seemingly paid to a throw away line Mr Rhodes made at the end of the CEO Briefing in the context of him playing down the threat of the black market to UK consumers. He said “it is worth noting that other regulators around the world are looking at this problem too and some of you are the black market in those countries. You should expect a greater degree of attention from Governments and regulators internationally, especially where there are legitimate routes to gain a licence in that country.” Having stated earlier in his speech that the Commission had sought to better understand international businesses, this comment seemed more like a warning shot that perhaps failed to grasp the efforts that most operators go to in order to construct a regulatory risk rationale that allows them to accept bets and wagers in both recognised regulated markets and .com jurisdictions. It’s certainly one to watch.
Overall, Andrew Rhodes has made some positive and tangible changes at Commission HQ since he took up his position. There is some credit in the bank but let’s do a check in 12 months to see how vulnerable that credit was.