A coroner made legal history in June 2023 by citing gambling disorder as a contributory cause in the suicide of Luke Ashton, who was placing up to 100 online bets a day.
Gambling operator Betfair was explicitly criticised for not having intervened in the two years before his death and admitted at the inquest that it could have done more to protect their customer, whom they assessed as low risk.
The case is a salutary lesson for all licensed gambling operators. Scrutiny of their actions has never been greater – from regulators, campaigners, politicians, the media and courts of law. Operators paid more than £76m in fines to the Gambling Commission in 2022-3, resulting from 27 enforcement cases; that compares with just three operators paying out £1.7m because of regulatory failures in the 2016/17 financial year.
It is also a warning to other players in the industry, including in non-regulated sectors and in the grey area between the regulated and non-regulated markets. This year’s long-awaited White Paper outlined reforms to the 2005 Gambling Act, focusing primarily on the regulated market, but non-regulated operators will not avoid scrutiny indefinitely.
Crypto casinos have become increasingly popular, fuelled by celebrities and streamers who stream themselves playing online slots. But some sites have been accused of providing the money to streamers and celebrities without making it clear that they are not playing with their own money.
Many of these gambling sites are based in Curacao in the Caribbean to get round regulatory restrictions, but a few are broadcasting from the UK via VPNs. The White Paper does not cover cryptocasinos which operate in this way, nor does it deal with the issue of VPNs.
Whilst the Gambling Act does not have any specific provisions regarding the use of cryptocurrencies, a license is still required for casinos that support crypto gambling and online casinos are required to meet the necessary conditions to run legally.
White label partnerships
The Gambling Commission makes it clear that a licence holder is responsible for ensuring all operating gambling websites are compliant, including white labelled sites, and this responsibility cannot be transferred to any other party. Licensees must know their customers and be able to demonstrate knowledge, oversight and proactive interactions where appropriate. Any interventions must be completed in a timely manner.
However, this remains a grey area. The funding and governance of white label sites remains obscure and there have been repeated allegations that some are linked to money laundering and organised crime.
And the white label affiliate marketing products that many online casinos rely on to generate traffic are an example of outsourcing responsibility for marketing. But there is no guarantee that the marketing will be responsible and, when potentially vulnerable consumers are involved, that can leave operators exposed.
Loot boxes contain mystery in-game items, such as weapons or outfits, that can be obtained for money, without knowing what the player will get. They have become increasingly popular as a revenue stream, generating more than £10bn a year, with about 90% coming from a small group of big spenders known as ‘whales’.
Multiple studies have found links between problem gambling and loot boxes. Yet they are not regulated as gambling because players cannot usually cash out and turn their winnings into money.
Instant win games are increasingly popular and because of their immediacy are the most addictive form of gambling. The campaign against Fixed Odds Betting Terminals, led by influential newspapers and a cross-party of politicians, removed many from the high street, but online instant win games could become a new focus of attention.
For example, the Health Lottery QuickWin advertises itself as the first game of its kind with a lottery draw every 3 minutes – day or night. Its chief executive admitted the speed of play could cause problems for people at risk from gambling harm and promised to enhance the safer gambling content on their website.
A commitment to safer gambling needs to be embedded in an operator’s DNA because increasing scrutiny is inevitable throughout the industry. It should be evident in how an operator communicates with its customers, both in tone and frequency, whether directly or through its website, social channels and marketing collateral.
Operators needs to show that they are making more than a token effort to interact with their customers and that they are picking up danger signs if a customer is gambling irresponsibly. They need to be mindful of the danger that products they offer could trigger harmful gambling.
For any business, good communication begins with articulating values and purpose. Gambling operators who neglect this will invariably find themselves in the spotlight.