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Table of contents

In July 2020, the House of Lords Social and Economic Impact of the Gambling Industry Committee published a report entitled ‘Gambling Harm—Time for Action’. The House of Lords is due to debate the report on 27 April 2022.

1. What is problem gambling and gambling harm?

The House of Lords committee quoted a definition of ‘problem gambling’ produced by the Gambling Commission in 2020. The commission said problem gambling was:

Behaviour related to gambling which causes harm to the gambler and those around them. This may include family, friends and others who know them or care for them.

Public Health England (PHE) published a more detailed breakdown of the harms associated with gambling in September 2021. It described six types of harm:

  • Financial, such as debt and bankruptcy. As well as being harms in themselves, the report said they could lead to other types of harm on the list.
  • Relationship, including lower levels of family functioning and social support and an increased risk of domestic abuse.
  • Mental and physical health, such as an increased risk of dying from any cause and a significantly increased risk of suicide. Problem gamblers were also more likely to suffer from self-harming, depression, sleep and alcohol and drug-related problems.
  • Employment and education, for example a loss of concentration at work that can mean a higher risk of losing a job or being demoted. Child gamblers, and children of gamblers, also experienced difficulties at school.
  • Criminal and anti-social behaviour, such as theft, fraud and selling drugs.
  • Cultural, for example shame and isolation resulting from societal attitudes to gambling.

2. What is the extent of problem gambling and gambling harm?

Various surveys have provided estimates of the number of problem gamblers and the extent of gambling harm. The House of Lords committee quoted an estimate of 0.7% of the population being problem gamblers, equivalent to a third of a million people in England, based on the 2016 Health Survey England. It said a further 1.8 million people were at “low or moderate” risk of gambling harm. The committee also estimated that, on average, one person commits suicide per day because of gambling issues. It said that young people, including those aged 11 to 16, were most at risk.

Other, slightly lower, assessments of the extent of problem gambling include PHE’s estimate of 0.5% of the population in England, based on a 2018 survey, and the Gambling Commission’s estimate of 0.3% in Great Britain, based on a 2021 survey.

PHE also estimated the total economic cost of gambling harms as £1.27bn per year in England. The largest category of cost was mental and physical health, including £619m resulting from suicides. However, the study noted that it was not possible to value all harms to individuals and society and therefore its cost estimates were likely to be too low.

3. What were the committee’s findings and recommendations?

The House of Lords committee criticised what it called the current “laissez faire” approach to gambling regulation. It said this was the result of the provisions of the Gambling Act 2005, which the Government described as the basis for “virtually all” regulation of gambling.

The committee argued that “successive governments and regulators have failed to keep up with the revolution in the UK gambling sector”, in particular the rise of online gambling. The committee said this had not been foreseen at the time of the 2005 act and made the act unsuitable as a basis for current regulation of the sector.

In particular, the committee stated that “gambling operators have made hay” exploiting the current regime. For example, the committee argued that the regulatory structure has allowed some gambling companies to use “unscrupulous methods and ingenuity” to increase their profits. Such tactics have included targeting the “most vulnerable” people with inducements to gamble, when the companies knew such bets were unaffordable for the customers.

The committee also criticised regulators in the market, notably the Gambling Commission, which was set up by the 2005 act. The committee said that “only recently” has the committee begun to use its wide powers, which include heavy fines and revoking an operator’s licence.

The report made over 50 recommendations. It stated that all the main political parties had promised to reform the laws on gambling in their 2019 general election manifestos, including the Conservative Party’s promise to carry out a review of the Gambling Act 2005. The committee said this review should be taken forward “with some urgency”.

Other recommendations included:

  • The Gambling Commission should have a revised remit, funding structure and powers. For example, its remit should expand to include “prevention of potential and actual harm” from gambling. The commission should also demonstrate “much greater willingness” to use its existing powers; for example, to withdraw an operating licence in the case of repeat offences or other extreme circumstances.
  • The Government should impose a mandatory levy on gambling companies to fund research, education and treatment for gambling addiction.
  • Companies should be obliged to take steps to identify whether customers are betting more than they can afford. In addition, operators should be allowed to share affordability information where a vulnerable customer has accounts with more than one company.
  • Customer communications containing inducements to gamble should be allowed only within “strictly controlled limits”, including affordability checks.
  • ‘Loot boxes’ in video games should be brought into the scope of the 2005 act and regulated as games of chance.
  • There should be additional restrictions on gambling advertising, for example a ban on sponsorship of team shirts and a ban on advertisements at or near sports grounds. For a more detailed discussion of issues around gambling advertising, see the Library’s briefing for a debate on the subject that took place in the House of Lords on 1 March 2022 and the Hansard report of the debate itself.
  • There should be a transparent and independent ombudsman service to resolve disputes between customers and companies.

4. How did the Government respond?

On 8 December 2020, the Government published its response to the committee’s report. On the same day it launched its review of the Gambling Act 2005.

4.1 Review of the 2005 act

The Government said the review was in light of evidence that “too many people are still experiencing significant harm” from gambling, and that the industry had “changed enormously” since the passing of the act. In particular, the review was intended to ensure that regulation was “fit for the digital age”. It sought evidence in areas such as: online protections; advertising sponsorship and branding; the Gambling Commission’s powers and resources; consumer redress; and age limits and verification processes.

In June 2021, the Government said it aimed to publish the results of the review by the end of 2021. However, it has not yet been published. On 6 April 2022, the Government said a white paper outlining the conclusions would be published “in the coming weeks”.

4.2 Government’s response to the House of Lords committee

The Government’s formal response to the committee said “the priorities for action as set out in the committee’s report” are reflected in the “wide scope” of the review of the 2005 act. The Government’s response to many of the committee’s recommendations referred to work being undertaken as part of the review.

The Government also noted developments including:

The Information Commissioner’s Office (ICO), which oversees the use of personal data in the UK, sent a separate response to the committee’s report discussing the proposal that gambling companies should share information on vulnerable customers. The ICO noted that this gave rise to possible issues under the General Data Protection Regulation (GDPR) and data protection laws. However, the ICO stated that “data protection law should not […] be cited as a barrier to sharing when it is necessary to protect the vital interests of an individual”. The ICO said it was open to working to develop a “safe and secure” method for data sharing and was already holding discussions with the Gambling Commission and others.

5. Further developments

Following the Government’s response to the committee’s report, the chair of the committee, Lord Grade of Yarmouth (Conservative), wrote to the Government asking for action in several areas in advance of the review of the 2005 act. These included loot boxes, a mandatory levy on gambling operators and advertising. In his reply, the Parliamentary Under Secretary of State for Sport, Tourism and Heritage, Nigel Huddleston, pointed to several initiatives in gambling regulation that had already been implemented or initiated. These included several of the developments noted in the previous section of this briefing. However, he stated that changes to regulations should be considered “in the round” through the review of the Gambling Act 2005.

Aspects of gambling regulation have continued to evolve since the committee’s report. For example, in November 2021, additional guidance was added to the codes that govern advertising. This covered areas such as not presenting complex bets in ways that could lead to “erroneous perceptions of risk or control”.

On 9 March 2022, the Government launched a consultation on reforming the regulatory framework for online advertising more widely. The consultation document made frequent references to online gambling advertising, for example in relation to targeting vulnerable people or being too easily accessible by children. The consultation period closes on 1 June 2022.

On 5 April 2022, the Advertising Standards Authority (ASA) announced new restrictions on gambling advertisements, designed to reduce their appeal to under-18s. Promotions will not be allowed to feature people or content popular with this age group, such as sports people, stars from reality TV shows or video game references. The new rules come into force on 1 October 2022.

On 14 April 2022, the Gambling Commission published a response to a consultation on the steps operators should be required to take to identify vulnerable customers. It said the commission would “bring into effect significant and strengthened requirements on gambling businesses to identify customers at risk of harm and to take action as a result”.

6. National strategy to reduce gambling harms

In April 2019, the Gambling Commission launched a three-year strategy to reduce gambling-related harms. Its main objectives are to:

  • reduce the incidence of gambling harms, through measures such as regulatory reform and education and information campaigns; and
  • make treatment and support more accessible for those who need it.

The Advisory Board for Safer Gambling (ABSG) is overseeing implementation of the strategy. The ABSG’s latest progress report, published in June 2021, said that some progress had been made in areas such as the design of gambling games, the implementation of age limits and in financial institutions offering blocking tools and support when asked to by customers. However, it also said that there has been little progress on addressing gambling-related suicides or on the development of measures to assess the impact of the strategy. The ABSG made a number of recommendations; for example, that national suicide prevention strategies and reporting systems should also cover the risk of suicide associated with gambling.

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Cover image by Steve Sawusch on Unsplash.