Opinion: UK thinking on egaming more confused than ever

The House of Commons Committee on Culture, Media and Sport has just concluded a broad report on the UK gambling industry. If one had to lift out any one section as representative, it would be paragraph 208 in which the Committee asks the government to make up its mind about gambling and give some sort of leadership to the industry, noting that the DCMS failed even to mention the gambling industry in its Departmental Business Plan for 2011-15.

Does the Budd Report mean anything now? Does the government still think that gambling is a bona fide leisure choice for adults or has it slipped back into the reluctant permissiveness of previous generations? The vacuum in leadership concerned the Committee. As one might say, if the trumpet give an uncertain sound, who shall prepare himself to the battle?[1]

No area is more beset by uncertainty than online. The committee dissected in detail the devastating effect of HM Treasury’s failure to work with the DCMS to integrate taxation policy with regulatory policy, causing ‘”¦almost every online gambling operator moving offshore whilst most are still able to advertise and operate in the UK’[2]. The Committee expressed the forlorn hope that HM Treasury would in future ‘work with industry stakeholders to establish the correct level for online gambling taxation’ and feared that its failure to do so would give rise to a UK ‘grey market’ comparable to that which misjudged French remote gambling taxation has caused.

There were other aspects of policy that were too much for officialdom to cope with. For example, the Committee was suitably shocked at the Full Tilt Poker debacle and not unreasonably sought assurances that no such disaster could happen under any future UK point-of-consumption regulation.

The minister complacently replied that ‘”¦it would be too burdensome and would render the industry too uncompetitive to require operators to hold a separate players’ winning account”¦’. Evidently the minister has not visited the Isle of Man, where regulations require operators to do exactly that, an approach that has been amply vindicated. How the government can claim to be motivated by the need to protect UK players and at the same time dismiss the gold standard of regulation in this area mystifies me. The committee was blunt on the matter: ‘”¦the Gambling Commission should consult”¦as to what form of ‘ring fencing’ or protection of player accounts”¦would be a proportionate response”¦to this unfortunate episode’[3].

More widely, the challenge posed by point-of-consumption flummoxed the Gambling Commission. The disjointed state of regulation in Europe was lamented, but when the Committee asked the Commission which jurisdictions the Commission would tighten up on as part of future UK regulation, the answer was that the Commission didn’t know[4].

The Committee suggested that if the Commission didn’t know enough about the operators it is going to licence, it should at least acquaint itself with the regulators: “Even if the Gambling Commission does not directly assess individual operators for their suitability to hold a UK licence, it will”¦have to make an assessment of which regulators it will allow to act as its agents..’[5]

In terms of unnoticed elephants-in-the-corner, there was no mention of the lawfulness of a UK point-of-consumption regime in EU law (dubious) nor, in the unnecessary agonising over arguable problem gambling statistics, of ‘social gaming’ whereby children play products almost identical to gambling using ‘virtual’ stakes and prizes.

Overall, the report suggests that the UK’s thinking on remote gambling is way more confused than anyone feared.

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