NAO report on the UKGC … and it’s not impressed

The National Audit Office in the UK has released its report into the current performance levels of the United Kingdom Gambling Commission, and it’s fair to say that the NAO is not overly impressed. The UKGC has come under much scrutiny of late, particularly by certain sections of the UK’s Conservative government, and was hoping that a glowing report would give some weight to the defence of its performance. Unfortunately, that has not arisen.

The UK Gambling Commission was set up in 2007 in response to the rise in online gambling companies offering online pokies and games and sports betting opportunities. It regulates all manner of real-world and internet-based gambling activities, from seaside arcades to the leading online betting companies. Since 2015 all companies offering any form of gambling activity to people resident in the UK are required to hold a UK Gambling Commission licence.

It is the National Audit Office’s role to monitor the effectiveness of UK public bodies.

The National Audit Office is a politically-independent Governmental organisation which is tasked with monitoring and reporting on the effectiveness of public bodies, such as the UK Gambling Commission. Its report has been keenly anticipated, given the increase in gambling revenue in the UK over the past few years, and the criticisms that the UKGC has faced.

In the report which was published towards the end of February this year, the NAO says that the UK Gambling Commission is failing to react quickly enough to some of the tactics devised by the more unscrupulous betting companies to encourage people to gamble. As a result, the UK Gambling Commission has been told that it is not doing enough to prevent people who are in danger of gambling harm from experiencing severe problems because of their gambling.

It seems that the opinion of the NAO is that the UKGC is underfunded.

The good news for the UK Gambling Commission is that the National Audit Office places most of the blame on the UKGC’s ineffectiveness on its lack of funding. The commission receives an annual budget of just £19 million and works to control an industry that, in 2019, took over £11 billion from people in the UK. This budget is about one-tenth of one percent of the industry’s revenue, and the entire commission – which employs almost 300 people – receives one-twentieth of what Bet365 CEO Denise Coates earns per year.

According to the NAO, the UK Gambling Commission is “constrained by factors outside its control, including inflexible funding and a lack of evidence on how developments in the industry affect consumers.” The NAO also said that the UKGC “unlikely to be fully effective in addressing risks and harms to consumers within the current arrangements”.

The report is another black mark for the UKGC in what has been a difficult time.

The UKGC has never been under so much scrutiny. Over the past year or so many issues have arisen that that regulator has been forced to deal with. These include the rise in gambling among young people and people who are gambling illegally because they are too young, the links with football and gambling (the majority of football clubs in England’s top two divisions are sponsored by gambling companies) and the VIP schemes offered by online slots sites, casino and sports betting companies, even though such schemes have been around for over a decade.

To generate extra funding, the UKGC has ramped up the level of fines it has given out. In 2015 the UKGC raised fines totalling just £1.4 million. Last year, that figure had risen to £20 million. It has been said that because the UK Gambling Commission is issuing more fines, it acts as an indication that the industry is failing to take the UKGC’s rules seriously. £20 million in fines is perhaps small change to an industry that generates over £11 billion in revenue annually.

The UKGC does not seem to be in the best position to tackle online gambling issues.

Other failings pointed out include the UKGC’s lack of reaction to the increase in gambling advertising and the new channels open to advertising alongside traditional channels such as print and audio-visual media. There has been a 56% rise in gambling advertising spending since 2014, with companies now focusing on social media channels such as Facebook, Twitter, Instagram and Snapchat.

Another bone of contention was the UKGC’s lack of reaction to mobile channels. Online gambling via mobile apps has risen from 23% in 2015 to a minimum of 45% today.

“The risks to gamblers are changing as technologies develop,” said Gareth Davies, head of the National Audit Office. “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.”

MP Carolyn Harris, a noted critic of the UKGC, calls upon UKGC CEO Neil McArthur to resign.

Notorious UKGC critic Carolyn Harris MP said: “The Gambling Commission is not fit for purpose and Neil McArthur [the chief executive of the UK Gambling Commission] should resign in the light of this report. The commission is not up to the job of regulating the gambling industry, particularly the online sector, parts of which seem to operate like the wild west.”

The UK Gambling Commission reacted to the National Audit Office report by saying that the findings “underline the constraints that our current funding arrangements presents, and we are developing proposals to discuss this with DCMS [Departure for Digital, Culture, Media and Sport]”.

Whether Neil McArthur stays in his job remains to be seen. One thing is a decent bet, though – that something about the UKGC has got to change, and change soon.

Here at NewCasinos.org, we fully support all efforts to encourage responsible gambling. If you have been affected by anything in this article and feel you may have an issue with your gambling, please contact an organisation such as GamCare that can help you. Links can be found on the footer to such organisations.