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Gambling Commission & Enforcement

According to the Home Office’s summary of recorded crime for 2002/03 to 2008/09[i], the UK has suffered an explosion in gambling related offences since the Gambling Commission took over in 2005/06. In that (what seemed like an) auspicious year, the number of recorded gambling related crimes was 6. This almost doubled the following year (2006/07) to 13, fell significantly the subsequent year (2007/08) to 11 and for the most recent recorded year (2008/09), hit an all time high of 22, more than a 350% increase over the period. While most areas of crime in England & Wales had been falling during this time, such a dramatic rise in gambling related crime has now put criminality in our industry on a (numerical) par with abandoning a child under the age of two years (23 crimes in 2008/09) and way above health and safety offences (16 in 2008/09).

Flippancy aside, what this proves is that criminality in this industry; which employs in excess of 100,000 people, services an estimated 23 million customers and deals with a turnover of more than £84 Billion[ii], is basically non-existent and this can only be testament to the integrity and good governance of our industry who have kept it crime free for decades. In the period 2002/03 to 2008/09 the average annual number of recorded gambling related crimes was just 10 per year, or the equivalent of 0.001% of the workforce. If only the financial services industry or Parliament itself could show such a squeaky clean record. Something which many in our industry wish that politicians and regulators would remember when considering how to govern us.

In the last year, the Gambling Commission spent £9.8M on regulating gambling in the public interest[iii], in other words licensing and enforcement, their primary strategic objective. Something which they assess themselves to be at an amber risk of failing to do[iv]. By way of comparison, in 2004/05 there were only 12 gambling crimes[v] recorded, yet the Gaming Board for Great Britain spent only an estimated £3.9M[vi] in keeping the nation safe from the hordes of gambling crooks roaming the land. Now obviously the Gaming Board didn’t have to police the bookmakers, arcades or the remote gambling sector. Of the 4,166 licences existing as of 31/3/09; 1,393 were to do with betting, 951 were to do with arcades and 328 were remote or 64% of the total licences,[vii] so in effect, the Commission has a little more than doubled its workload in comparison to the Gaming Board, yet in almost all measures; the Commission seems to have at least tripled the costs of regulation (see my previous article[viii]). So are we as an industry, and as a nation, getting cost effective gambling licensing and enforcement

The trouble with assessing this, is just what metric does one use? As with all crime figures, they are not a direct reflection of the level of crime, more the effectiveness of the enforcement body in getting convictions. This is why we have the British Crime Survey to tell us more about people’s perceptions and experiences of crime. Unfortunately the BCS doesn’t ask about gambling crimes. So one option is to look at what the Gambling Commission has achieved in the Courts and by suspending licenses, their most severe sanctions.

In my previous article, I mistakenly stated that the Gambling Commission hadn’t convicted anybody yet, maybe I should have qualified my statement by stating there hadn’t been any convictions for serious crimes. According to the Commission’s press releases 2007-2010; it has been responsible for 4 convictions over this 4 year period; 2 for the illegal supply of gaming machines[ix] and 2 for making unlicensed gaming machines available[x]. There have also been 5 instances of cautions being given; 1 for illegal poker in pubs[xi], 3 for illegal betting[xii] and 1 for the illegal supply of machines[xiii]. The Commission has obviously been far busier hanging around pubs than I gave it credit for, at an average rate of 1 conviction per year it is responsible for 10% of the average annual gambling related convictions, thankfully we have Her Majesty’s Constabulary and the local licensing officers to defend us from the gambling anarchy which is out there.

In all fairness, numbers of convictions is an almost bogus metric as it depends on a number of variables outside the Commission’s control. Even though they have statutory enforcement powers, they can’t arrest or prosecute. This is still down to the police and to the Crown Prosecution Service, who may at times have other priorities. It has been alleged that the reason for the Gambling Commission’s focus on the rather basic crimes like illegal machines in pubs is because these are the easiest to get a conviction for. The machine was either in the pub or not and was either licensed or not. If this is the case, it would seem that the Gambling Commission is still, after four years, finding its feet, doing the small stuff, teaming up with the local authorities to fight low level breaches of the Act in pubs, where licensing officers have the most experience. The Commission are, in effect, the Community Support Officers of the UK gambling industry’s beat. But is this enough? Surely we deserve some proper policemen, especially, as the Hampton Review so clearly states that ‘stakeholders want to see the Commission act vigorously where operators deliberately work outside the law’[xiv].

If we look at the recent flurry of licence suspensions; ATL Amusements[xv], GameAccount Global[xvi]and Paradisebet[xvii], it would seem that the Commission’s penchant for easy policing continues. ATL Amusements are being investigated for allegedly having/supplying illegal machines, the GameAccount Global suspension would appear to be the culmination of an ugly, long drawn out affair and as for Paradisebet, it took the Gambling Commission to read about Paradisebet’s Italian head office being raided by Italy’s anti-mafia police before they moved in[xviii]. Paradisebet, who it would appear have been run by the Camorra for some time out of Puglia, have had an office in Hounslow and been fully licensed as a UK bookmaker since 2002. Our regulator not investigating in foreign shores – does remind one of Antigua joining the White list and the trouble that’s caused.

The consistent theme when assessing the Gambling Commission and considering the financial burden it places on the industry is that it just could do better. Especially now as it approaches its fifth anniversary. Initiatives like the whistleblower hotline[xix] set up to allow casino staff to inform on their bosses, are not only divisive (staff have always been able to contact the Commission with their concerns) but stink of cheap and easy. The Commission has all the tools but none of the ‘balls’. It could actively enforce the law, it could actively promote the business of our industry and it could cost us all a lot less. Let’s hope the new Minister in Cockspur Street finds the time to sort things out.

References

  1. Excel spread sheet downloadable at http://uk.sitestat.com/homeoffice/rds/s?rds.recorded-crime-2002-2009revxls&ns_type=clickout&ns_url=[http://www.homeoffice.gov.uk/rds/pdfs09/recorded-crime-2002-2009rev.xls]
  2. Taken from Gambling Commission Industry Statistics 2008/09
  3. Annual Report of Gambling Commission 2008/09, p.28 gives total operating costs of £15.3M. On p. 29 Chart 8 gives costs of regulating gambling in the public interest as 64%. £15.3M X 0.64 = £9.8M
  4. Annual Report of Gambling Commission 2008/09, p.29, table showing risk
  5. See Home Office spreadsheet
  6. Calculated as follows: From Gaming Board’s Annual accounts 2004/05, p.92 gives total cost of Gaming Board as £6.1M, using same 64% as Gambling Commission does for attributing expenditure to regulating gambling in the public interest, £6.1M x 0.64 = £3.9M
  7. Gambling Commission Annual Report 2008/09,p.15
  8. http://www.gamblingcompliance.com/node/42434
  9. From Gambling Commission press releases issued 17/7/09 & 16/1/09
  10. From Gambling Commission press releases issued 16/1/09 & 30/09/08
  11. GCGB Press Release 19/3/10
  12. GCGB Press Releases 10/3/10, 27/4/09 & 23/12/08
  13. GCGB Press Release 10/9/09
  14. Gambling Commission: A Hampton Implementation Review Report, p. 30, http://www.bis.gov.uk/files/file50888.pdf
  15. GBGC Press Release 27/4/10
  16. GBGC Press Release 26/3/10
  17. GBGC Press Release 18/12/09
  18. See Gambling Compliance article, Paradisebet Seizure Revives Italian Corruption Legacy, 14/12/09 http://www.gamblingcompliance.com/node/40658/hl/search/paradisebet
  19. See GMB press release http://www.gmb.org.uk/newsroom/other_news/casino_workers_hotline.aspx and GBGC press release http://www.gamblingcommission.gov.uk/gh-media/latest_news/2010/confidential_telephone_line.aspx