.svg)
Body
New UK research suggests authorities should apply pressure to operators by sharing information on their responsible gambling credentials with consumers, and create stronger regulatory incentives to encourage best practices.
The discussion paper was published on August 1 by the Behavioural Insights Team (BIT), a consultancy that works with governments to tackle policy problems, and its Gambling Policy and Research Unit.
“With the recent publication of the Gambling Act white paper, this is a timely opportunity to develop solutions to fix market failures,” the BIT said.
The BIT research argues that the UK gambling market does not incentivise operators enough to prevent gambling harm, “apart from at the extreme ends”, adding that a well-designed market would align operator incentives with improving consumer welfare and well-being.
As an example, the BIT suggests providing consumers with information such as which operators have the best customer service score to “encourage consumers to spend more money with those operators, incentivising all operators to improve their customer service”.
When it comes to regulatory incentives to encourage best practices, it suggests “clear guidelines and/or outcome measures allow the regulator to monitor operator performance. Performance can be tied to incentives such as levies, fines or other regulatory action to further incentivise operators to prioritise consumer interest.”
“Our current view is that the first approach has benefits but is unlikely to be sufficient on its own to reshape the market, and that a combination of both approaches is likely to be most effective,” the BIT said.
In order to support its findings, the BIT listed a host of behavioural factors that it says are currently “exploited” by the gambling industry.
These include “limited cognitive bandwidth”, which makes it hard for consumers to know if they are making good decisions and “present bias” where people tend to prefer immediate rewards over waiting for later, larger rewards.
Additionally, the BIT claims many UK operators take “the path of least resistance”, claiming that businesses knowingly introduce extra hassle to put people off from making a decision.
“Operators make certain things really easy, like placing a bet, and other things hard, like withdrawing funds, opting out of marketing messaging, or closing an account,” the BIT said.
The BIT is welcoming feedback on the discussion paper, in particular on a set of questions it has outlined. The feedback will be used to prioritise its next steps.
“Our ambition is to develop additional evidence and pilots to inform decisions for policymakers on how to reshape the market,” the BIT said.
Questions to stakeholders include if it is possible to create stronger incentives by using existing legislation, what additional resources it may need for it to succeed, what incentives should be looked into, and if there are any other factors that it should consider as possible “backfires”.
