Code breaker? Report questions whether the Gambling Commission has adhered to Regulators' Code

The Gambling Commission has defended itself from accusations it has failed to adhere to the provisions set out in the Regulators' Code.

A report written by Dan Waugh, partner at specialist gambling research and advisory firm Regulus Partners, claims there has been repeated non-compliance with some of the code's provisions and calls for a discussion about the extent to which the code should guide the commission's actions.

Statutory regulators including the Gambling Commission are required to "have regard" to the Regulators’ Code, introduced by the government in 2014, when carrying out their duties. A regulator can, however, exempt itself from a provision as long as it explains why.

In November, Gambling Commission chief executive Andrew Rhodes described the code as "a seven-page document written some years ago", which was "a sensible set of guiding principles" for regulators.

Dan Tench, partner at law firm CMS, told the Racing Post he thought that Rhodes's characterisation of the code was "a slightly odd approach from a leading regulator in respect of a regulatory code issued by the government to which they are subject to a specific statutory obligation".

He added: "However, the obligation does ostensibly extend only to 'having regard' to the code and in theory a regulator can have regard and then do pretty much what it likes."

The code contains six provisions which Regulus's analysis suggested the Gambling Commission follows "in many respects". However, the 48-page report found evidence of "repeated non-compliance" with two of the provisions in the code: the first, that "regulators should carry out their activities in a way that supports those they regulate to comply and grow"; and the sixth, that "regulators should ensure that their approach to their regulatory activities is transparent".

"Many of the issues identified are non-trivial," the report said, "including evidence of bias against licensees; suggestions of moral distaste or exceptionalism in relation to betting and gaming as consumer pastimes; a lack of transparency in the way that decisions on regulatory policy are made; and the provision of conflicting and misleading guidance on matters of regulatory compliance."

Gambling Commission chief executive Andrew Rhodes

The report made a number of recommendations, the most important being that the commission should "restate its commitment" to the Regulators' Code and its provisions and "incorporate them explicitly within systems of performance evaluation".

In response to the report, a spokesperson for the Gambling Commission told the Racing Post that "adherence with the Regulators’ Code is, and will continue to be, at the heart of our regulatory approach".

The commission also disputed the report's portrayal of its adherence to the code. The spokesperson added: "It is entirely right for the commission to be accountable to the industry it regulates and related parties, but we do not consider the report gives an accurate assessment of our adherence to the code and is based on partial evidence.

"As the author themselves makes clear, the report is Regulus’s subjective assessment of the commission’s adherence with the Regulators’ Code."

On the specific criticism of the commission's adherence to the first provision of the code, the spokesperson said that in recent years it had "investigated and sanctioned licensees for egregious cases of non-compliance".

The spokesperson added: "Serious and repeat cases of non-compliance with minimum requirements has been an issue within this sector and therefore is relevant to any assessment of application of the code.

"Despite that backdrop, as a whole the gambling industry has increased gross gambling yields from customers by between six and seven per cent when comparing the most recent reporting period with the last pre-Covid period."

However, Tench suggested the commission was not beyond criticism on this point. He said the code's approach which "militates in favour of supporting the industry" was supported by section 22 of the Gambling Act which "puts a degree of onus on the commission to permit gambling".

Tench added: "Observers of the industry might wonder how often the commission fulfils the spirit of both the code and this section by supporting the industry and permitting gambling."

He also argued there remained questions for the commission to answer when it came to exemptions from the provisions.

Tench said: "Perhaps where the provision is at its most pertinent is not in terms of the substance of regulation but in terms of the procedure adopted by the commission, because in certain instances the code requires – where a regulator proposes to depart from the principles of it – to have a clear written record of the reasons for doing so. It's not always clear that that is occurring.

"A court might be persuaded in certain circumstances that a failure on the part of the commission to document its reasons may render a resulting decision to be ultra vires."

Regulus's report conceded that its assessment was "necessarily subjective" but said it was based on "hard evidence".

The report added: "As such our conclusions may be discussed and debated; and others [including the Gambling Commission] may put forward alternative arguments supported by hard evidence. 

"We do not claim that this report provides a definitive assessment – and our observations should be used to stimulate constructive discussion."

Nils Anden named permanent CEO of Kindred

Nils Anden has been appointed as Kindred Group's permanent chief executive having held the interim position since May. The news came as Unibet's parent company, the subject of a £2.2 billion takeover offer from French lottery operator La Francaise des Jeux, revealed its results for 2023.

Total revenue was £1.2 billion, up 13 per cent on the previous year, while underlying Ebitda (earnings before interest, taxation, depreciation and amortisation) increased by 58 per cent to £204.5 million.

Anden said: "I remain confident that Kindred can deliver above-market growth across our portfolio during 2024. We see robust performance in select core markets, and I expect this momentum to continue going forward.

BetMGM reports jump in revenue

Bet MGM: reported 36 per cent increase in net revenue for 2023

Entain's US joint venture BetMGM delivered a 36 per cent increase in net revenue in 2023 to $1.96 billion, at the top of the previous guidance range.

The operation also became profitable in the second half of the year, according to a trading update issued on Thursday, although it was expected to record an Ebitda loss for the full year of $67 million.

Horseracing data companies merge

Total Performance Data and Australasia’s biggest horse tracking company tripleSdata have come together to create the world’s largest automated distributor of live horseracing performance data.

The merger will result in the combined company supplying live and post-race performance data from more than 100 racecourses in 11 different countries, including from the Breeders’ Cup, Dubai World Cup, Melbourne Cup, Royal Ascot, St Leger and US Triple Crown.

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