Under fire GC seeks to diminish turbulent priests

23 June 2020

Scott Longley sees recent enforcement activity as highlighting a lack of transparency in the British regulator's decision-making processes, and warns that efforts to develop more efficient processes may reduce oversight further.

The Gambling Commission would appear to be averse to complexity. Without wishing to rake over the coals of the entire PTES case, one aspect of the regulator's part in the drama which stood out was its willingness to follow the narrative lead from the family of a man who died by suicide.

This isn’t about squeamishness over the issues or about standing up for the industry. This about the guidance from the Samaritans which states in its advice to the media on the reporting of suicide that simplification of the issues should be avoided.

“Over-simplification of the causes or perceived ‘triggers’ for a suicide can be misleading and is unlikely to reflect accurately the complexity of suicide,” the guidance states. “For example, avoid the suggestion that a single incident, such as loss of a job, relationship breakdown or bereavement, was the cause. It is important not to brush over the complex realities of suicide and its devastating impact on those left behind.”

Compare that with the language used by the Commission in its press release covering the case (emphasis added): “In May 2019, the Gambling Commission started a review of the operating licence of PTES, arising from the death by suicide of one of its customers.”

Implicit in this the language is an acknowledgement of the media narrative around gambling and suicide, one which to say the least is questionable. But more than that, the case of PTES suggests the Commission is happy to be seen to be both the prosecuting counsel and judge and jury in instances of potential licensing infractions.

The incident also appeared to show the Commission to be willing to ride roughshod over its own rules in order to please the braying mob. The determination with which it made it clear that it wished to levy a fine against an entity which, as far as the UK regulatory structure was concerned, no longer existed was telling.

As is the fact that, as one source suggested, the Commission appears to use a random number generator for the level of fine it levies in the various regulatory breaches seen to date. Transparency is one of the Commission’s aims that it appears willing to forego when it has the bit between its teeth.

Many fear the Commission is intent on re-interpreting its remit, but lawyers who deal with the body on a regular basis complain that it is also attempting to change the rules of engagement when it comes to the whole process of policing the regulatory regime.

They cite the ongoing consultation over proposed changes to the regulatory panel system, a process kicked off in mid-May when the Commission said that due to “change in the gambling market and gambling regulation,” the cases that went before the regulatory panel were “becoming increasingly complex and legalistic.”

Power play
Under the guise of cost-effectiveness, the Commission appears intent on a further power grab. It proposes the appointment of between four and six adjudicators solely for the purpose of sitting on panels. These would, as the lawyers have pointed out, would be Gambling Commission employees.

The Commission also proposes the panels should be drastically slimmed down, to one Commissioner and one adjudicator in the case of operator licensee hearing and only the adjudicator when it comes to personal licensee hearings.

Finally, the Commission wishes to reduce the occasions that disputes go before the panels, saying referrals should be consulted “if” asked by the Gambling Commission staff to provide “steers on regulatory settlement proposals… and financial penalties.”

Bahar Alaeddini, partner at Harris Hagan, said in her firm’s blog on the proposals the idea that it should be a problem that cases that come before the regulatory panel are “increasingly complex and legalistic” is absurd given the gravity of the decisions being made.

“Revocation, suspension and a hefty fine are on the table, so what is wrong with that?” she queries. “It is a misconception that boils down to a noticeably changed approach to gambling regulation in Great Britain, influenced by various factors including the competence and integrity of the Gambling Commission, and whether it can be trusted to make robust, consistent and fair decisions.”

As it stands, the purpose of the quasi-independent regulatory panel is to give licensees the opportunity to challenge “minded to” decisions on the part of the Commission staff. That independent status will be eroded by either lessening the number of Commissioners taking part in a hearing or doing away with their participation entirely.

Instead, the new rules would place more importance on the adjudicators who, it should be noted, would receive precisely one day’s training a year in order to fulfil their tasks. As Alaeddini says, “it is unimaginable that the Gambling Commission would consider one day of training annually to be sufficient education for anyone working in the gambling industry”.

It hardly needs a look at a dictionary to point out that a panel consisting of one person, employed by the Commission, is neither independent nor a panel.

Trust issues
Moreover, this move comes at a time when trust between the regulator and its licensees is on the wane and the willingness of operators and suppliers to accept Commission findings is on the decrease.

The Commission doesn’t publish any information about panel hearings, yet as Alaeddini says they provide a “critical control and protection” that will be weakened by the proposals. Given the Commission’s unwillingness to share details about the panels, “the cynic might be tempted to conclude that the Gambling Commission does not like the decisions the regulatory panel is reaching.”

That is a damaging verdict. The Commission is under pressure over its cost-effectiveness after the highly-damaging report from the National Audit Office at the turn of the year and Neil McArthur’s equally poor performance in front of the House of Commons Public Accounts Committee in late April.

If its answer is to cut costs at the expense of proper oversight, then maybe it is learning the wrong lessons from recent history.

Scott Longley has been a journalist since the early 2000s, covering personal finance, sport and gambling. He has worked for a number of publications including Investment Week, Bloomberg Money, Football First., eGaming Review and Gambling Compliance. Scott now runs his own editorial consultancy, Clear Concise Media, and writes for a number of online and print titles.