Panorama: the fall-out

20 August 2019

In the wake of last week's damning BBC report on the industry's treatment of those addicted to gambling, operators are keen to show they've made massive changes. However those campaigning for operators to make massive changes say they are still hearing similar stories to those featured on the programme.

The Panorama episode, Addicted to Gambling, focused on the industry’s reliance on problem gamblers and claimed leading UK operators did not perform sufficient checks on possible problem gamblers. It's not just a symptom of wider public distrust - players are unhappy too, with Panorama revealing that complaints regarding operators have rocketed by almost 5,000% in the past five years. Coming when the industry is working on high profile social responsibility and responsible gaming efforts in a bid to improve public perception, the timing could not have been worse.

In the Gambling Commission’s 2018 report on gambling behaviour and attitudes, 71% of respondents said operators were 'not serious' when they say they want people to gamble responsibly. In the same report, 71% agreed with the statement that gambling is dangerous for family life, 58% agreed that gambling should be discouraged and 25% agreed that it would be better if gambling was banned altogether. The broadcast will only serve to fan these fires of distrust.

Among the case studies featured in the episode was Tony, who stole money to fund a gambling addiction. Tony claimed that Ladbrokes did not perform source-of-funds checks for his deposits and was instead granted access to Ladbrokes’ VIP programme. After quitting gambling for five months, Tony received a £10,000 bonus from the VIP programme, which he said led to a relapse.

The programme also included interviews with a former JackpotJoy customer, “Amanda,” who lost £633,000 on over a period of six years. She was bombarded with bonuses, including a £1,000 in cash when the company found out her father passed away.

The operators' responses to these cases were simple: this happened in the past, and we've changed.

GVC Holdings - which acquired Ladbrokes Coral in 2018 - said case studies such as Tony’s are not representative of the company since the acquisition, and that GVC had made efforts to improve how Ladbrokes approaches problem gambling.

“The case featured by Panorama dates back to 2013-2016, prior the acquisition of Ladbrokes Coral by GVC in 2018,” the company said. “Since then the group has transformed its safer gambling processes, having made significant investment, not only financial but also in terms of human resources and technological advancements.”

JackpotJoy parent company JPJ Group, meanwhile, said that they did make efforts to guide Amanda towards responsible gambling tools.

"We are deeply sympathetic to the unfortunate personal circumstances experienced by Amanda during her playing period with us. As a loyal customer, we had frequent and personal engagement with Amanda in 2014, the period highlighted in the programme, which involved advising on and encouraging the use of our responsible gambling tools.

"This included the use of deposit limits, cooling-off periods and alternative withdrawal methods; tools which Amanda was aware of and used during the time she played with us.”

However JPJ also attacked Panorama, claiming that the programme was misleading in its presentation of the time in which the events shown occurred. The operator stated its approach to problem gambling has improved as regulatory requirements changed.

“We are also disappointed that Panorama decided to portray the period and events discussed as very recently when in fact they took place in mid-2014,” JPJ said. “We have always acted in accordance with the relevant regulatory requirements, as we understood them to be at the time. These requirements have significantly evolved over time and notably so since the time when Amanda was playing regularly with us.

"As a consequence, our responsible gambling strategy has also evolved. This has led to ongoing investment in customer service and new technologies, which allow our customers to enjoy a fun and safe playing environment. We have closed thousands of accounts and completely re-engineered our systems and processes in order to ensure that all our players stay within their own personal limits.”

There is indeed evidence of positive change, as evidenced by GVC's Changing for the Bettor responsible gaming initiative. This includes a $5m research project into responsible gambling in conjunction with Harvard Medical School and a doubling of the company’s donation to research, education and treatment on problem gambling to 0.2% of gross gaming revenue.

This has been adopted by the UK's 'big five' operators - Sky Betting & Gaming, Flutter Entertainment, William Hill, bet365 as well as GVC - which have committed to increasing RG funding to 1% of gross gaming yield by 2023. The quintet will also collaborate on problem gambling research and increase safer gambling messaging in advertising. This follows the so-called whistle to whistle advertising ban around live sports broadcasts, that came into effect from 1 August.

However, while operators stressed that they have improved since the events highlighted in the episode took place, responsible gambling campaigners have been less sure that enough has been done.

Matt Zarb-Cousin, director of gamling-blocking software Gamban, spokesman for the Campaign for Fairer Gambling and leading voice in the campaign to reduce of the maximum stake on FOBTs, said while some improvements may have been made, cases similar to those highlighted on the programme remain too common.

“I’m certainly still hearing similar stories to those covered by Panorama," he said. "I’m not saying the companies haven’t improved but I think there’s still a long way to go."

Zarb-Cousin said he understood it was difficult for companies to self-regulate in a way that may harm their bottom line. This, however, meant that the onus fell on the regulator to force through necessary changes. 

“Operators are in a difficult position because they have to justify everything they do to their shareholders,” Zarb-Cousin said. “They can’t go to shareholders and say, ‘We’re going to reduce our profits this year because we’re introducing measures that our competitors aren’t.’

"So the regulator has to solve that with meaningful solutions that can be applied across the whole sector and the whole gambling industry.

“Reducing harm would mean significantly reducing gross revenue in the short term," he explained. "This means that any measures that would actually be significant in reducing harm can’t be introduced unilaterally, they have to be implemented on a regulatory level.”

During the programme, gambling commission chief Neil McArthur remained unconvinced by the need for this kind of top-down regulation, stating that “operators ought to be able to keep players safe and keep them from becoming at risk of problem gambling.”

The Gambling Commission has issued penalty packages to operators for failing social responsibility and source-of-funds checks, including £5.9m from Ladbrokes Coral in July after ruling the company, “failed to put in place effective safeguards to prevent consumers suffering gambling harm and against money laundering.” However, Zarb-Cousin said he believed it was the responsibility of the regulator to introduce further checks including deposit limits and affordability checks across the entire industry - something McArthur argued against.

”The regulator and the government need to step up with solutions that can be applied across the industry, whether that’s affordability checks that can’t be circumvented, the same for deposit limits, there’s things that can be done through overarching industry collaboration through the regulator that would be effective. I think until it’s applied across the industry it’s not going to be affected. There’s going to have to be some kind of joined-up approach.”

Zarb-Cousin added that he felt VIP programmes in general often find themselves too close to encouraging problem gambling, and that reducing focus on ‘high-roller’ gamblers in favour of casual punters - a move undertaken by SkyBet - could prove to be financially beneficial in the long run.

“Ending VIP programmes is probably welcome,” Zarb-Cousin said. “If it’s too difficult to differentiate between high rollers and problem gamblers it’s probably for the best that those practices can end. It’s possible for the industry to get to a place where customers aren’t losing more than they can afford. If operators can build these relationships instead that last 10-20 years, then that’s much more sustainable for the longer term - politically and commercially - for everyone.”