Just as the UK government and the powers that be in the domestic gambling industry have been teaming up to improve conditions for punters and businesses alike, new elements are proving to be potentially problematic.
Recent years have seen so-called ‘new, novel products’ emerge that are presenting both operators and regulators with a conundrum in that they’re not so easily definable as gambling per se.
At the recent ICE 2022 London Expo, Sarah Gardner, Deputy CEO of the UK Gambling Commission (UKGC), mentioned a number of products and engagements that could potentially be troublesome from a gambling perspective but in and of themselves don’t readily fall within hitherto conventional gambling parameters. Not only can they not automatically be defined as gambling, but the language used in the way they are presented also makes it difficult to even acknowledge using current UKGC guidelines that a customer is effectively making an actual bet.
And herein lies the problem: if regulators are unable to define these ‘novel’ products in the same way that, for example, sports betting, online poker, traditional casino games, bingo and slots can be unambiguously compartmentalized, then this murky, grey area can be impossible to properly monitor and, in turn, to regulate and, consequently, protect customers.
One such product that proved problematic to categorize was offered by Football Index, whose collapse last year led to questions being asked of the UKGC as to how far their remit should extend. In this case, customers bought ‘shares’ in footballers and, depending on such eventualities as (for instance) goals scored in a specific match, would receive ‘dividends’ – this fiscal venture might well revolve around a football match, but is it a bet? We could be forgiven for believing that indeed it is but, back then, the UKGC decided that because the central element of the transaction was the customer buying shares, this particular product did not justify a place within its regulatory remit.
It might seem like semantics, but how this or that product offered by companies is interpreted by potential customers can influence whether or not they participate. Gardner: ”We see consumers ‘investing’ life changing money on a product which they would not if they understood it to be gambling… This is something we need to be aware of. Although the product might look different, the potential to cause harm is still present. Collectively, we need to be watchful, we need to take action where we can.”
Another example of ‘novel’ offerings is blockchain-based products, with Non-Fungible Tokens (NFTs) being a relatively new but increasingly popular investment avenue for the more forward-thinking punter. Not surprisingly, then, especially given the speculative nature of NFTs, big names are inevitably going to stake a claim for a piece of the action. Entain, for instance, are to introduce NFTs through their recently launched £100 million-financed Ennovate innovation hub.
Gardner also pointed out another area of concern for regulators (and the extent of their influence) in the form of international companies and black markets. Referring to the latter: “That is obviously an area of focus for us but we do at least know about it and we are deploying more resources to combat it.”
What is clear – even if the definitions are not – is that the UKGC intends to widen the parameters and tighten the screws, targeting those companies who don’t adhere to licensing conditions. To this end, 130 investigations will be carried out during 2022-2023… “We have been clear to the operators we regulate that a growing business is not an excuse for growing misconduct, and we will not turn a blind eye to bad practice.”