Regulatory shift prompts rise in complaints about gambling

Out-Law News | 12 Aug 2019 | 2:11 pm | 2 min. read

A sharp rise in consumer complaints to the Gambling Commission can likely be attributed to the regulator's pro-active approach to preventing harm to consumers and the high-profile enforcement action it has taken in the gambling market in recent times, according to experts.

Figures obtained by the BBC’s Panorama programme show that the Gambling Commission received 8,266 complaints from gamblers in 2018, up from only 169 in 2013.

The majority of the complaints were about gambling operators refusing to pay out on winning bets or failing to operate in a socially responsible way, according to the BBC.

Litigation expert in the gambling sector Alan Sheeley of Pinsent Masons, the law firm behind Out-Law, said one reason behind the rise in complaints is that the Gambling Commission has become more active in handing out penalties to gambling operators that breach their licensing conditions.

“As with all regulators, as they become more visible and outspoken more complaints will be sent to them," Sheeley said. "The original number of complaints – 169 in 2013 – is negligible. So as the regulator has generated more publicity on a regular basis through the significant fines it has levied on non-compliant gambling operators, it is obvious that more complaints will follow,” Sheeley said.

“The gambling market is massive and so 8,266 complaints still only represents a tiny percentage of people compared to the number of customers that use gambling operators. Despite this, particularly with the ever-increasing number and value of fines being imposed by the Commission, gambling operators do need to make sure they are following the regulations to the letter; especially in respect of the 'know your customer' requirements. If they don’t the fines will just keep coming, the fines will get bigger and civil actions against gambling operators will become an everyday occurrence,” Sheeley said.

The Gambling Commission has made a number of moves designed to protect gamblers in the past year. Last summer it commissioned research into harmful play, and in May it introduced rules requiring online gambling providers to verify the identity of customers before allowing them to deposit funds into accounts or to gamble. It is also carrying out research into the issues of gambling with credit cards.

Gambling law expert Audrey Ferrie of Pinsent Masons said the regulator’s change in focus could also be a reason for the rise in complaints.

“The significant increase in complaints reflects the shift in onus from ‘protection’ to ‘prevention’," Ferrie said "It is no longer sufficient for operators to have in place measures to protect their customers. They are expected to ‘know their customers’, to look for ‘markers of harm’ and to interact at an early stage to keep their customers safe.”

Gambling Commission chief executive Neil McArthur told the BBC: “We are pushing the industry to know its customers, and part of this is actually, possibly, a good sign because it's suggesting that consumers are demanding more of the gambling operators. And I would encourage them to continue to do that."