Changes to the licence conditions and codes of practice on High Value Customers
11 - Response from the Interim Experts by Experience Group to the consultation on HVC schemes
Context - About the interim Experts by Experience group
The Gambling Commission draws on a wide and diverse range of voices to inform our work to make gambling safer for consumers. Earlier this year, to support this aim, we formed an Interim Experts by Experience Group to provide advice, evidence and recommendations to the Commission, as well as collaborating with us on co-creating a permanent Lived Experience Advisory Group to work with us on a longer-term basis.
This group will provide a key form expert advice, alongside other sources which include our Advisory Board for Safer Gambling, the Digital Advisory Panel and our wider consumer research - in addition to other evidence and analysis from our casework. The group have been involved in areas in which we consider progress can be made quickly to protect consumers. We want to be open about the decisions that we make and why, and we are committed to working collaboratively with all stakeholders, which is why we are publishing the statement below from Experts by Experience in response to outcomes of the consultation into High Value Customers.
Response from the Commission’s Interim Experts by Experience Group – 5 October 2020
The Gambling Commission announced the establishment of an Interim Experts by Experience Group in July. The consultation on so-called “VIP Schemes”, which had begun long before the group was established, was one of the first substantive issues on which the group engaged. The group are issuing this statement to sit alongside the Commission’s announcement of new rules governing such schemes because we wanted to record our fundamental disagreement with the Commission’s decision and dissatisfaction with our engagement on the topic. We want to make clear that we do not feel that we had any influence on the decision making process or the final outcome.
Most members of the group had been made VIPs by gambling companies, so have had first hand experience of the appalling ways in which schemes have been run and the devastating effects that they can have on people’s gambling and their lives. The group are also in contact with an enormous number of people who have suffered similarly. The schemes are designed to prolong and increase people’s gambling and are not related to people’s real income or wealth. Many members were driven to crime by the schemes and many seriously contemplated or attempted suicide.
The group were unanimous in believing that VIP schemes have no place in gambling and are one of the most irresponsible and vicious devices for encouraging big spenders to lose more. The group do not believe that the Gambling Commission truly understands the scale and severity of harms caused by such schemes and are certain that the changes in rules are a totally inadequate response to the scale of the problem. We believe that the failure to ban such schemes will inevitably result in further catastrophic outcomes for thousands of people, including the deaths of many.
However, the group remain committed to continue advising, liaising and working with the Gambling Commission to ensure that the voices of Experts by Experience (EbEs) of gambling related harms are heard throughout the Commission and have a real influence on decisions made by the Commission and in changing its ways of working. We believe that the challenge is too important to withdraw and that the Commission can change. The group are working with the Commission on the topic of “affordability” which we feel underpins many of the changes to regulation and practice that are required. We will judge the Commission’s commitment to really incorporating the views of EbEs into their work.
The group has the following comments on the rules announced by the Commission:
- Lack of basic management information – the Commission appears to lack basic information on the scale of problems around VIP schemes including the numbers of VIP customers, profitability of such schemes, number of failures and scale of damage, etc. We do not believe that the Commission will be able to monitor the impact of any changes.
- Lack of definition in the rules – as with many existing LCCPs, the rules are littered with vague terminology, referring to “reasonable checks” and undefined “customer interactions”.
- Affordability – most shocking is the lack of definition of “affordability”, the establishment of which is a central element of the new rules. No level of (disposable) income is mentioned and the guidance appears to conflate income and wealth. For instance, the rules mention that ‘windfall income’ should not be included but has no instruction about ignoring the value of someone’s house. So it appears that it is acceptable to allow a gambling company to encourage someone to gamble the capital in their house.
- Lack of any rigorous defined and effective penalty system – there is no clarity about the number or scale of breaches which will lead to individual or company licences being revoked. Experience has shown that these schemes are so profitable to companies that fines are just treated as a “cost of business” and do not act as a deterrent.
- Lack of adequate monitoring – we do not believe that the Commission has the resources in place to identify abuses and breaches in a timely manner. Therefore, abuse and breaches will not be discovered until it is too late, with massive irreversible damage being done to many individuals and families, including deaths.
Neil McArthur states: “If significant improvements are not made, we will have no choice but to take further action and ban such schemes.” Regrettably the group believe that the current proposals will inevitably lead to significant abuse and breaches which will not be picked up in time by the Gambling Commission to prevent the catastrophic consequences for too many gamblers and their families. The industry appeared to acknowledge that these schemes were dangerous by banning their use for people under 25. The reality is that the schemes are dangerous full stop: it is inadequate to try to lessen the harms by managing them better. Until the Gambling Commission can define and implement “affordability” and “single customer view”, they should have exercised the “precautionary principle” and put a halt on these schemes altogether.Previous section
HVC Response 10 - Annex A: Amended social responsibility code provision