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The House Can Lose Warns New UK Gambling Commission CEO
By Shane Addinall Jun 15, 2022 IndustryIn a recent address Andrew Rhodes, CEO of the UK Gambling Commission, spoke frankly about their concerns regarding lacklustre financial controls by licensed casinos and entertainment products that flirt with being games of chance but avoid regulation.Speaking at the Westminster Media Forum Gambling Regulation Conference, Andrew Rhodes, CEO of the UK Gambling Commission, addressed several areas of concern. While he addressed the overall state of Britain’s gambling regulations ahead of the upcoming revision, he did raise two points we found particularly noteworthy and delivered a warning to operators who do not intend to toe the party line.
Rhodes addressed that as gambling moves away from traditional bookmaking and into the technology sector, it is becoming increasingly difficult to define the boundaries between gambling products and mainstream entertainment. He also spoke of the Commission’s frustration with the ongoing issue of lax regulatory controls by certain licensed operators.
Product Gamblification Has Raised Alarm Bells
Many products in the video game and entertainment space need tighter controls. These products either emulate the mechanics of highly regulated games of chance or trigger a FOMO (fear of missing out) response that can lead to significant financial losses.
Rhodes commented:
“… the boundaries between products that can be defined and regulated as gambling are becoming increasingly blurred.”
In his address, Rhodes specifically addressed the ongoing issue of loot boxes. Loot boxes are when instead of purchasing a specific in-game item, the player must buy a digital "pack" which holds a random percentage chance of delivering the desired item. You're right if this sounds like a spin of a video slot. It is the same mechanic, only in many instances with far worse odds.
“As entertainment more widely is becoming more seamless – across locations, channels and devices – so too gambling operators are looking to take advantage of this trend by moving towards more entertainment-focused business models, reducing the friction between gambling and non-gambling products.”
He also addressed the growing number of play-to-earn or play-to-own products that have been launched in the NFT space. These products capitalise on the ever-increasing fear of missing the next big crypto-trend by allowing players to win NFTs in-game. However, these games often require that the player purchase various in-game items to boost their chances of "earning" a top-tier NFT. Once again, these acquaint to nothing more than reskinned slot machines posing as NFT video games to avoid regulation.
Licensed Operators Need to Tread Lightly
Rhodes addressed the Gambling Commission's desire to expand the gambling sector as a viable business within Great Britain – one which serves the players, encourages commercial growth, and provides revenue for the state.
Rhodes said:
“I have to believe it is possible to have a successful and innovative gambling industry that provides something its consumers want but can do so in a responsible way; eradicating the inexcusable excesses we still see today and expanding the good practice we also see. For those operators who understand this, we will continue to work with them towards that shared goal.”
He was quick to point out that the Commission would not make allowance for online casinos and betting sites that continue to deal in bad faith. The warning is clear – shape up or prepare to lose your license!
“To anyone else offering gambling to consumers in Great Britain, whether with a licence or not, then I’m afraid that is the time when the House always loses.”
It will be of interest to those in the industry to see how the Gambling Commission backs up that threat. While it is a valid concern and even an appropriate sentiment, the reality is that the UKGC's hardnosed approach to regulation has driven more than 450,000 British players to gamble at unlicensed offshore casinos.
To both follow through on their threat and increase player channelling, the new gambling regulations will have to include controls that limit player deposits and withdrawals at black market casinos.
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