How to control online gambling in a digital age – Christopher Snowdon

THE Government is running a consultation to find out how to make Britain’s gambling laws ‘fit for the digital age’.

A new review into gambling has been launched, but does it go too far?

Since the digital age was well under way in 2007 when the last Gambling Act came into force, the consultation may have been prompted less by technology and more by a growing backlash against gambling in general.

The informal coalition that successfully banished fixed-odds betting terminals from bookmakers is looking for new dragons to slay. On the agenda is a total ban on gambling advertising and sponsorship, a limit on how much punters can spend, and making online games less enjoyable by slowing them down and cutting prize money.

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The justification for this fresh slew of anti-gambling policies is, as always, problem gambling. Whilst there is no doubt that problem gambling can have serious consequences, a sober look at the evidence shows that the number of problem gamblers in Britain has remained constant at around 0.6 per cent of the adult population since 1999. Historic changes, including the legalisation of advertising and the rise of online platforms, have not affected it one jot. The UK’s rate of problem gambling is lower than in many countries where gambling regulation is tighter.

A new review into gambling is underway.

Problem gambling is endemic in all societies. It is particularly prevalent among young men, most of whom fortunately grow out of it. There are things we can do to help, such as the NHS’s new gambling clinics, but blunt tools designed to make gambling less appealing are not the way.

Ham-fisted prohibitions are particularly ineffective on the internet. If the Government forces excessive regulation on licensed operators, such as limiting how much punters can stake, players can easily switch to unlicensed websites. Recent research found that 4.5 per cent of UK online gamblers had used an unlicensed operator in the past 12 months and 44 per cent were aware of at least one unlicensed website.

These numbers are small by international standards but they are likely to rise if the Government strangles the licensed sector.

A ban on gambling advertising and sponsorship would not only deprive the world of sport of much needed revenue, it would also blur the lines between the regulated and unregulated sectors. At the moment, the freedom to advertise is, as the Government says, “one of the primary advantages that licensed and regulated operators have over the black market”. Since 2015, all licensed operators have to pay tax in the UK and abide by British regulation. Unlicensed operators don’t. At the moment, most gamblers are happy to use licensed websites, but this is not a bear that should be poked.

It is not as if there has been a shortage of gambling regulation in recent years. In addition to the de facto ban on fixed-odds betting terminals, gambling with credit cards was banned in April 2019. All online gambling operators are now required to join the national self-exclusion system GAMSTOP which prevents anyone who has excluded themselves from one gambling website from playing on any regulated site. Teaching about the risks of online gambling became mandatory in state schools in September 2020 and the age at which the National Lottery can be played will be raised from 16 to 18 in October 2021.

What more can the Government usefully do? I think the answer lies in technology. Sophisticated algorithms can spot potentially harmful patterns of play. A range of indicators, including failed deposits, use of multiple payment methods, previous self-exclusions, erratic betting patterns and chasing losses, raises red flags and allows operators to intervene. Interventions range from a friendly email reminding the player that he can set deposit limits, or a telephone call raising concerns, to the full suspension of the account.

In the past, gambling companies often had no idea who their customers were. Today, online operators not only knows their customer’s name and address (which they check with credit agency databases), but how much they spend, what they play and how they play. The ability of ‘Big Data’ to identify problematic gambling gives us opportunities to prevent harm that we have never had before, but we can only do it if players are using a UK-licensed website.

The internet is not going to disappear and people will always be able to gamble online.

Instead of resisting digital platforms, we should recognise the potential they have for helping the small minority of problem gamblers while maintaining free choice for everyone else.

Christopher Snowdon is Head of Lifestyle Economics at the Institute for Economic Affairs.

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