Betting firms should be warned about customers in financial difficulty, urges think tank

Betting firms should be told about vulnerable customers at risk of severe financial difficulty from gambling, according to a major new report.

The alerts would stop bookmakers claiming they are unaware of customers unable to afford the bets they are making and stop problem gamblers plunging themselves and their families deep into ruinous debt.

A new gambling ombudsman should be set up and given powers to instruct betting firms to slow the pace at which a gambler can play, reduce the stakes, or, in rare circumstances, refuse to accept any more bets for a limited period.

In the wake of a gambling epidemic made worse by the coronavirus crisis, the Centre for Social Justice urges the Government to radically curtail the scope for betting firms to take advantage of gamblers whose addiction places them and their families at risk of bankruptcy.

The report, backed by Labour MP Carolyn Harris and former Conservative leader Sir Iain Duncan Smith, warns that technology makes gambling more accessible than ever, and allows gambling operators to influence behaviour like never before.

In 2019 alone, gamblers in the UK collectively lost over £14.5 billion to bookmakers, casinos, lotteries, and other betting platforms, and gambling profits are largely drawn from the losses of the most vulnerable gamblers. The CSJ report finds that problem gamblers, which make up just 0.8 per cent of the population, contribute 25 per cent of the gambling industry’s profits.

The think tank wants banks placed under a duty of care to share ‘limited and necessary’ data with a newly created bureau modelled on a credit rating agency capable of quantifying the level of risk faced by the customer. This bureau would then advise the gambling ombudsman under a duty to inform betting firms about gamblers who are severely over-extended and heading for financial ruin. This immediate intervention will offer targeted, meaningful protection where it is needed.

Many gamblers accumulate their big losses over a long period of time, not from a single bet. Data from banks can identify problem gamblers by looking at spending habits, as gamblers leave a significant digital footprint.

Tragically, family members often have no idea about these losses until it is too late, for example when the bailiffs turn up at the door.

The CSJ argues that many of the worst financial harms, such as the loss of the home or bankruptcy, are foreseeable and therefore preventable with the right intervention. Workable and proportionate affordability checks and interventions, together with banning gambling advertising, would be particularly effective measures in preventing harms.

Using real-time data on customer spending and behaviour, it is possible to accurately assess an individual’s gambling capacity and to notify a regulator or ombudsman of an individual’s level of risk of harm.

In severe cases, the ombudsman would be able to instruct the bookmakers to bar that individual from spending any more. Such a system would identify the financial risks to the individual themselves, their family members, or other dependents, without disclosing large amounts of personal data or impacting the average gambler.

This means intervention follows on from pre-determined signs of a developing harm. Financial harms can be quickly recognised by an algorithm that is programmed to look for signs of distress. For example, it might recognise markers such as severely and rapidly depleted resources, missed bill payments, or the use of payday loans as the gambling spend grows. This would be balanced against avoiding unnecessary incursions into personal freedoms by ensuring intervention only follows on from indicators of real harm.

The report also demands the elimination of all gambling marketing, inducements, and advertising in the UK, an approach akin to that applied in tobacco control, which takes into consideration all forms of advertising, including promotion and sponsorship.

The report, entitled Not a Game: A call for effective protection from the harms of gambling, seeks to inform the Government of the drastic scale of gambling addiction, which affects millions of gamblers and members of their families as well as communities across the country.

Debt, financial losses, relationship breakdown, homelessness, worklessness, and high rates of crime are consistently reported as common problems faced by gamblers.

The study was compiled in consultation with academic and gambling treatment experts.

Sir Iain, who founded the CSJ, said:

“The gambling industry now poses a very real threat to our communities and the time has come to get a hold on this pernicious addiction which has such a strong connection to social problems, including drug and alcohol addiction, debt, family breakdown and crime.

“Since the 2005 Gambling Act the disastrous consequences of an underregulated and enormously powerful industry have caused many to fall into a spiral of debt and mental and emotional turmoil, sometimes to tragic effect.

“Only wholesale reform can meet the scale of the challenge posed by the well-engineered and sophisticated practices of the gambling industry to recruit and retain their customers.

“We call for a model that uses a strong independent ombudsman to analyse essential banking data to identify those in need of support and protection from gambling related harm.

“With the ombudsman’s intervention, we can protect the fundamental rights of individuals to express personal and financial agency, while achieving necessary levels of protection to people and their families heading for financial exclusion and serious harm as a result of their gambling.

“This is, I believe, a very conservative action to take and one which would help those in the poorest communities enormously.”

Ms Harris said:

“We have long called for truly independent and effective affordability checks. Today, our gambling legislation is hopelessly and dangerously out of date. While huge profits are made and bonuses are paid inside the gambling industry, too many families are exposed to poverty and all the social injustice and hardship that follows.

“We believe that tackling this issue must involve a whole system approach to reform, from the use of tools already available, such as the gambling levy, doing much more in prevention and recovery, through to imposing advertising bans.

“However, this timely report calls for a data-led approach to identifying person specific and real time financial harms. It calls for the use of existing technology to be employed to ensure a robust and proportionate response capable of delivering real protection. It calls for a truly independent regulator with the powers of an ombudsman to act swiftly and fairly to create affordability checks that will work.

“These measures can save lives and further delay is inexcusable.”

Andy Cook, Chief Executive of the CSJ said:

“It’s time we recognised the disastrous impact gambling has on some individuals and really take hold of this threat. This needs a bold effort to completely redesign our relationship with gambling. It must start with stripping out the worst abuses; helping families avoid ruin through workable affordability measures is a sound start.”

“The solution to this crisis has to be multi-faceted and beyond regulation, we must also invest in recovery services.”

“The CSJ believes that affordability checks are an essential part of the equation. Banks have the capacity, and very often the genuine desire, to protect their customers. They are uniquely placed to offer the missing data link and we must recruit them to help protect the vulnerable by implementing a workable system of affordability checks, to be enforced by a new ombudsman.”

“The Government can help by creating a truly independent ombudsman capable of offering real protection.”

Matt Zarb-Cousin, a former gambler, co-founder and Director of External Affairs of Gamban, and the Director of Clean up Gambling, praised the CSJ’s approach:

“This is a hugely important work that adds to the growing consensus for a dedicated gambling ombudsman, independent of the industry. It makes the aspiration to build a sector that does not profit from gambling harm.”

ENDS

NOTE TO EDITORS

For media enquiries or a copy of the full report please contact Matthew Eason of Media Intelligence Partners at eason@mippr.co.uk or on 07780 707 322.

ABOUT THE CENTRE FOR SOCIAL JUSTICE

Established in 2004, the Centre for Social Justice is an independent think-tank that studies the root causes of Britain’s social problems and addresses them by recommending practical, workable policy interventions. The CSJ’s vision is to give people in the UK who are experiencing the worst multiple disadvantages and injustice every possible opportunity to reach their full potential.

The majority of the CSJ’s work is organised around five ‘pathways to poverty’, first identified in our ground-breaking 2007 report Breakthrough Britain. These are: educational failure; family breakdown; economic dependency and worklessness; addiction to drugs and alcohol; and severe personal debt.

Since its inception, the CSJ has changed the landscape of our political discourse by putting social justice at the heart of British politics. This has led to a transformation in government thinking and policy. For instance, in March 2013, the CSJ report It Happens Here shone a light on the horrific reality of human trafficking and modern slavery in the UK. As a direct result of this report, the Government passed the Modern Slavery Act 2015, one of the first pieces of legislation in the world to address slavery and trafficking in the 21st century.

Our research is informed by experts including prominent academics, practitioners and policy-makers. We also draw upon our CSJ Alliance, a unique group of charities, social enterprises and other grass-roots organisations that have a proven track-record of reversing social breakdown across the UK.

The social challenges facing Britain remain serious. In 2021 and beyond, we will continue to advance the cause of social justice so that more people can continue to fulfil their potential.