Fast Growing UK Operators To Find Themselves Under The Microscope

November 10, 2023
Mid-sized gambling operators that are growing fast should expect the eye of the UK gambling regulator to fall on them in the coming months, its CEO has warned.

Mid-sized gambling operators that are growing fast should expect the eye of the UK gambling regulator to fall on them in the coming months, its CEO has warned.

Gambling Commission chief executive Andrew Rhodes told the industry that high performing small- and medium-sized businesses are increasingly the focus of the authority’s compliance investigators.

“Our compliance programme is focused on risk and we have specifically been looking at operators in tiers two and three, particularly where they may have grown rapidly,” he said.

“This is not because we think growth must be a bad thing, but we have seen examples of operators growing their business faster than the underpinning compliance infrastructure.”

Rhodes made the comments as he addressed a gathering of more than 90 UK-licensed operators at an event in London on Wednesday (November 8).

His wide-ranging speech, however, did acknowledge that compliance as a whole had improved over the past 12 months.

“Last year I said we are still seeing too many of the extreme cases – the top of the chart – and that this was holding us back from grappling with those more complicated and harder to solve challenges about where the right balance of risk is – in the middle.

“I’m not going to say everything is perfect now, but 12 months on we are seeing far less of those extreme cases emerge from our casework. The industry has made progress and I want to thank the many operators in the room today and your trade bodies for having worked with the commission to achieve this step forward,” Rhodes said.

Rhodes dedicated much of his time to expanding on one of his core messages of recent commission statements, namely that the regulator is grappling with the difficult task of finding the middle ground in an increasingly polarised debate.

That included defending the Gambling Commission against accusations that it has repeatedly breached the Regulators’ Code, a seven-page document drawn up by the UK government that defines several principles of good regulation.

The code, said Rhodes, is just one document that guides the commission’s actions and is sometimes in conflict with the regulator’s other north star - the Gambling Act 2005.

“Depending on who you are and your view of the world, they can conflict and people will take different meanings from each. The Commission’s job is to balance the two. The Regulators’ Code stresses throughout that growth must come when the business is compliant, not instead of it,” he said.

Rhodes also claimed to have been misquoted on his comments around the black market.

Unlicensed gambling operators do present a problem, he said, and the regulator says it is taking more steps to crack down on its access to the UK, but “the black market as an argument against reform of regulation is, I think, overstated”.

Affordability, or financial risk checks, is undoubtedly the most polarising of the many issues that the UK gambling sector is currently grappling with. A petition calling on the government to completely scrap the planned programme of financial checks to be required of all online operators has reached over 75,000 signatures.

Many operators and punters complain that the proposals will decimate the horseracing industry and drive high volume players offshore.

Rhodes dedicated a large portion of his speech to the “exceptionally difficult and sometimes very bitter debate” currently engulfing the horse betting sector.

He again reiterated that the government and the commission would not allow checks to become mandatory until they were actually “frictionless”, and pointed to a recently announced industry working group that has been tasked to work out how the policy objectives can be implemented in reality.

It will be for the Department for Media, Culture and Sport (DCMS) to ultimately make the call on affordability, said Rhodes.

“The commission is implementing what the government has set out and before any of the White Paper consultations have been launched we have had confirmation from DCMS the consultation meets the direction and intent of the White Paper. Government will naturally respond to a range of points of view as it decides what to do,” he said.

Rhodes also warned the industry not to underestimate the impact of the Gambling Ombudsman, also mandated by the white paper, which will adjudicate on customer complaints.

Over 90 percent of the complaints currently received by the Gambling Commission are outside of its remit, said Rhodes.

Providing a forum for these concerns with the possibility of redress, “will be a good thing for consumers, but I would not underestimate how this will change perceptions for the industry, Government and its regulator,” he said.

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