Betfair founder Andrew Black: 'Spanish Inquisition' Gambling Commission needs overhaul

Betfair co-founder Andrew Black has compared the Gambling Commission to the "Spanish Inquisition" and has called for the regulator to operate like its City equivalent the Financial Conduct Authority (FCA).

Black, who also owns the Chasemore Farm racehorse breeding operation, called for a proper impact study to set out the effect of the affordability checks being proposed in the regulator's recently launched consultation on the betting and racing industries.

Half the members of the eight-strong board of the FCA are directors with a background in the finance industry. In contrast, the Gambling Commission's board features no experience of the gambling industry, something which has long been of concern to the sector.

Black believes the FCA should be the model for the commission, and said: "They have been around an awful lot longer, they have established how they operate and you would think the Gambling Commission would be some version of that."

He said the make-up and background of the commission's board made it likely there would be a "commonality of thinking among them which is not aligned in any way with the industry".

Black added: "To me they feel a little bit more like a Spanish Inquisition bearing down upon the industry than a group of thoughtful and empathetic regulators trying to potentially root out the bad apples but otherwise preserve the industry as it is, which is what I would expect.

"At the FCA, to my mind, there are people there to root out the bad operators within the industry, but they are not there to damage the industry. They are there to preserve the industry as is. What we seem to have is something that could be a private fiefdom."

Six new commissioners are being recruited for the Gambling Commission

The Gambling Commission board is set for a major overhaul, with six commissioners due to leave in stages before November 2024. The Department for Culture, Media and Sport (DCMS) carried out interviews for their replacements in April but as yet there has been no sign of fresh appointments.

"It would be great to have some representation [for the industry] in there but it is potentially too late," Black said, "so we need to be able to hold them accountable for what they are doing to us and I'm not sure how we do that. The only obvious court is the court of public opinion."

Black said he believed the gambling industry was in a "difficult place" due to the measures set out by the government in its gambling review white paper in April and on which the commission launched a consultation last month.

He added: "Normally when you make big changes you would see an impact study to say if we make these changes these jobs will be lost in the gambling industry and these jobs will be lost in the racing industry because the industry will contract. Where is the impact study?

"Is it there and if it is, what does it say? Has it been published and if not, why not? Why are we not getting transparency and most of all why are people from our industry who are empathetic to our industry not represented on this all-important, all-powerful board.

"I think there are questions they should be made to answer and I don't think we know how to make them answer those questions at the moment."

In response, a Gambling Commission spokesperson said: "One of the commission’s core aims is to be the trusted and authoritative voice on gambling, which is particularly challenging in an arena where there are many strong and often opposing views."

They added: "On financial risk checks, the policy decision to propose the introduction of such checks was taken by government after extensive consultation and was announced in the government’s white paper. Our recently published consultation sets out how the proposals in the white paper can be introduced through our rules and has been developed in close co-operation with government.

"The assessment by government, which we support, estimates that just three per cent of accounts would be caught by enhanced checks and concluded that this is a proportionate response to the risks consumers can face."

This week Peter Jackson, chief executive of major gambling operator Flutter Entertainment, voiced concerns the Gambling Commission's consultation did not reflect ministers' assurances that affordability checks would be "frictionless".

Rob Wood, deputy chief executive of Ladbrokes and Coral owner Entain, said the company was also keeping a close eye on the situation.

He said: "Clearly there is some risk here that the results don't go in the direction we would like them to, so it is something that we need to monitor closely and participate in fully which we are doing. I would concur it's important that when the DCMS talk about frictionless checks that's what they mean. We will watch closely what progresses."

Regulator in the cross-hairs: the Gambling Commission's big issues

Affordability checks

The Gambling Commission is at the centre of the long-running controversy over affordability checks. It briefly introduced them as an licensing requirement during Covid-19 lockdowns, but having subsequently updated its guidance to remove the explicit direction for checks has since denied responsibility for their widespread implementation across the betting industry. Speaking earlier this year, then gambling minister Paul Scully reminded the Gambling Commission of its remit. 

Paul Scully: former gambling minister reminded commission of its remit this year

"Let me be really clear here, it is not the role of government or the Gambling Commission to tell people how much of their salary they are 'allowed to' spend on gambling," he said. Last month the regulator launched consultations on various measures included in the government's white paper, which featured detailed proposals concerning implementation of the 'frictionless financial risk' checks the government had set out earlier in the year. 

This reignited controversy around the subject, containing proposals to treat winnings as losses after a brief window has elapsed, to repeat checks as often as every six months, and suggested that for many the so-called frictionless checks would in fact be manual.

Voluntary settlements

There has been growing criticism of the Gambling Commission's approach to distributing voluntary settlements paid by bookmakers in lieu of fines and which are used to support gambling harm prevention initiatives.

Between March 2019 and July 2023, the commission handed out around £90 million in awards, but the regulator takes no responsibility for ensuring the money is well spent. This absence of scrutiny last year shocked Julian Knight, then chair of the DCMS select committee.

"There seems to be money going out the door and no accountability for that money, apart from when you make the award," said Knight. "This money just splashes out there and you have no idea in terms of what this impacts with the licensees. I am struggling to think precisely as an organisation how you are doing your job."

There have also been accusations that the money has been used to fund explicitly political and anti-gambling research.

Protecting consumers

While the Gambling Commission has become far more active in its protection of vulnerable bettors in recent years, it continues to face criticism that it does a poor job looking out for millions of ordinary betting consumers and has failed them by not forcing operators to ensure customers' money deposited in bookmaker accounts is safe.

The QC appointed to oversee an independent review of the 2021 collapse of Football Index, which held £124 million in open bets at the time of its administration, criticised the commission for failing to understand the basics of the firm it was licensing and for being too slow to act over concerns about the business model. 

Bettors have also complained the commission is not sufficiently interested in tackling long-running issues to do with account restrictions and difficulties withdrawing funds.

No betting experience required: who's who on the Gambling Commission board

Marcus Boyle Chair

Former equity partner at Deloitte with "extensive change management experience". Trustee of the Serpentine Gallery in London's Kensington Gardens

Andrew Rhodes Chief executive

Joined from Swansea University and previously held a number of senior civil service roles, including as lead investigator in the 2013 horse meat scandal

Catharine Seddon Commissioner and senior independent director

Former film-maker who has since filled a range of public non-executive roles, including as deputy chair of the Human Fertilisation and Embryology Authority

David Rossington Commissioner

Former finance director of the Department for Culture, Media and Sport. Interim appointee whose term ends in September

John Baillie Commissioner

A chartered accountant and former partner of KPMG. Previously chair of the Accounts Commission for Scotland, the Scottish local authority watchdog

Stephen Cohen Commissioner

Boasts 40 years' experience in asset management. Also sits on the board of the Health and Care Professions Council, a healthcare regulator

Trevor Pearce CBE QPM Commissioner

Law enforcement veteran who served with the Serious Organised Crime Agency among others. Subsequent roles include the chair of UK Anti-Doping

Compare and contrast: Half of the Financial Conduct Authority's board have backgrounds in the sector they regulate

• How to respond to the Gambling Commission consultation: Views can be provided at this page. After completing the introductory questions, select 'Remote gambling: financial vulnerability and financial risk' from the 'Consultations contents page'. You may choose to answer as many or as few questions as you wish. Further Racing Post guidance on responding to the consultation can be found here.

• The Racing Post wants to hear from you: What has been your experience of affordability checks since the white paper was published at the end of April, and what do you think of the government's proposals? Have affordability checks affected your betting behaviour?
  It's a chance for your voice to be heard. Email the Racing Post at editor@racingpost.com with the subject 'Affordability checks' to share your experiences, your thoughts about the government's proposals, and your contact details.

Read these next:

Affordability proposals are not 'frictionless' warns Flutter chief 

Affordability checks explained and how to respond to the Gambling Commission consultation 

The Gambling Commission is waging a war on punters, and this is our last chance to fight back 

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