Written by Andrew Tait
In December 2017, the GB Gambling Commission (‘GC’) published the results of its annual survey which studies the exposure of children in Britain to gambling. Andrew Tait, partner at Gordon Dadds, analyses the results of this survey, and considers the possible incitements to children to gamble, and what action might be taken about it.
The survey was based upon an assessment of 370,000 children. This included Scotland for the first time (previously it just included England and Wales) and extended the age range from 11-15 to 11-16 year olds. The headline showed that 12% of those surveyed had spent their own money on gambling in the past seven days, down from 16% in 2016 and reinforcing an overall downward trend from 23% in 2011. Whilst this trend is encouraging there is no room for complacency, especially given the proliferation of gambling advertising, not just on TV but now more than ever before on the internet and social media. New gaming products like eSports (playing of well-known video games), or certain free play casino type games are of particular appeal to children. Coupled with children’s increased ownership of smartphones, these new forms of online products are easily accessible to children as they are not legally considered gambling. eSports may still be damaging, for example where there is an enticement to gamble by betting with in game items (‘skins’) on third party sites.
However, despite the general shifting balance from land based to online gambling, the highest occurrence of underage gambling still remains firmly in the land based sector, with 12% spending their own money in the past week in land based premises versus 1% online. This indicates the effectiveness of the strict 72 hour deadline for completing age verification for new player accounts. In land based gambling the main culprits for illegal underage gambling in the past week were 4% on fruit machines, 3% on lottery scratch cards and 3% on private bets. Gambling online, as mentioned above, is only minimal, only reaching 3% of 11-16 year olds over a whole year. The most common form of underage online gambling is on National Lottery games where 5% have gambled but only with their parents’ help and permission.
Increase in volume and means of advertising
The saturation of gambling ads on TV, particularly where allowed before the 21:00 watershed for bingo and betting (if around sporting events) exposes children to a culture of gambling, especially coupled with the predominance of English Premiership and other major sporting teams sponsored by gambling companies. Indeed 80% of 11-16 year olds have viewed TV gambling ads, with 39% seeing them at least once per week.
In the online world, the picture is not much better where 70% have seen gambling ads on social media and 66% via online advertising. The popularity of social media in this age group has led to 10% following gambling companies, resulting in the worrying trend of 30% of those following gambling companies on social media spending their own money on gambling in the past week compared to the 9% average. However, despite the very visible dominance of gambling advertising and sponsorship, only 1% of those asked in the survey linked advertising to encouragement to gamble more or gamble for the first time.
Gaming: accessibility to children
Whilst underage online gambling is very low (1%), there is a much higher uptake in unregulated free play gambling type games where 11% have played these types of games, with 4% in the past week, mostly using apps on a smartphone or tablet (73%). These gaming products have no age restrictions as real money can’t be used, so whilst this high usage may seem irrelevant, it’s still worrying as it encourages and may serve as an introduction to real money gambling. Indeed these ‘gamers’ are twice as likely (25%) to go on to gamble with their own money than those who haven’t played these free games (12%).
The survey for the first time assessed those taking part in ‘skins’ betting on eSports. 11% admitted having done this, the majority being boys in the older age bracket of 14-16. No doubt the figure would have been even higher if 16-18 years olds were covered. Participation in eSports is on the increase, especially amongst teenagers to whom it has particular appeal and where skins betting sites are keeping pace with this growth.
The highest instance of illegal underage gambling is on fruit machines (Category C gaming machine) played in land based premises such as pubs, hotels, clubs and arcades. The highest instance takes place in family entertainment centres (49% in 11-13 year olds). This is despite the strict requirements under their premises licences for supervision and controls to prevent underage gambling. The GC had previously spotted lax controls in many entertainment centres back in 2014 and told those affected that they must take a list of specific measures.
Fruit machines are also played in alcohol licensed premises, such as pubs and hotels where up to two Category C machines are automatically allowed without a gaming machine permit. 23% of the illegal underage gambling on these machines occurs in pubs. However GC codes must be followed in relation to supervision and prevention of underage access.
Licensing authorities are supposed to remind pub and hotel licence-holders that they must comply with these codes. However this rarely seems to happen, given their stretched resources, and for instance fruit machines are often left switched on and unsupervised in hotel dining areas during family meal times. Interestingly pubs are not covered by s83.1 of the Gambling Act 2005 which requires gambling operators to return stakes to underage persons and cut any winnings and losses. National Lottery products, which can only be played by over 16s, have one of highest instances of underage gambling, with 3% buying Lottery scratch cards and 2% tickets. The retail outlets are supposed to follow the licensee’s (Camelot) underage prevention practices.
However the survey showed that 79% of the National Lottery product underage sales involve the parent handing money over to their child at the point of purchase, thereby clearly illustrating failure by some outlets to comply with Camelot’s code.
Operators are not always to blame, as parents often aid their children in the more innocuous forms of illegal gambling, where 86% of National Lottery tickets or scratch cards are bought in the presence of a parent. Also 88% of those playing online do so with their parent’s permission, money and by using their parent’s accounts. Only 39% of 11-16 year olds were warned about the dangers of gambling by their parents and only 59% stop their children from gambling. It seems that gambling by family members in the presence of children helps normalise gambling, potentially leading to those children trying it for themselves.
Products of particular appeal to children
Some gambling products, particularly casino slot games, are themed using well known comic heroes, fairytale or cartoon characters, i.e. ‘Piggy Payout,’ ‘Fluffy Favourites,’ ‘Pirate Princess’ and ‘Jack and the Beanstalk.’ Where these are on public view i.e. on website pages which are not restricted to registered players, then their appearance on such pages is deemed to be advertising. Given that these pages are not restricted to over 18s, they may fall foul of advertising standards (CAP Code) which bans content ‘of particular appeal to children.’ The impact of these types of products on underage gambling remains to be seen as this topic was not covered by the survey.
The perceived increased prevalence of ‘advertised’ child themed slot games led to a joint CMA, GC, ASA and RGA initiative in October 2017. This resulted in operators having to ensure that these games were only visible to those customers who had passed age verification. To help operators navigate the thorny questions and what actually constitutes an advertisement and what’s appealing to children, the ASA issued some useful guidelines.
The GC published a paper in March 2017 on eSports and associated gambling activity, such as skin betting and underage gambling. This followed an investigation by the GC in 2015 into illegal skin betting sites, leading to over a hundred sites being shut down and enforcement action being taken against FutGalaxy.com. No doubt, given the popularity of eSports and video gaming by children (11% take part as per this latest survey) we will continue to witness the GC’s vigilance against the use of skins or cryptocurrencies to illegally bet in such games/events.
The GC has in the past cracked down on weak underage controls in adult gaming centres, such as the warnings given to Rainbow Arcades Ltd for allowing underage persons to play on B3 Machines and Happy Dayz Amusements for a similar offence in relation to Category C machines. The results of this survey identified play on fruit machines in family entertainment centres (where category C machines are supposed to be in a dedicated, supervised area away from unlicensed Category D machines) as being the highest incidence of underage gambling. Therefore it’s likely that the GC in conjunction with local licensing authorities will increase the frequency of test purchasing audits to ensure the required standards are being met, in particular where there have been past failings.
Pubs and most likely hotels are also a point of weakness, which will no doubt lead to more local licensing authority vigilance. It may also be made mandatory as is the case in gambling licensed premises to impose a requirement to return stakes to underage players and cut their winnings or, more importantly, losses. Given the possibility that underage players may try to benefit from this (i.e. risk free gambling), it should force alcohol premise licensees to take more care over supervision.
Further advertising restrictions
It’s possible that given the publicity backlash and adverse political murmurings against excessive TV advertising (reaching 80% of those underage), there may be a complete blackout of all gambling advertising before the 21:00 watershed. In addition, football club sponsorship deals with gambling companies may be banned if the Labour Party gets into government, with this recently proposed by Labour’s Deputy Leader Tom Watson. Furthermore a recent study by the University of Glasgow concluded that: “The close relationship between gambling companies and football in the UK, whether through shirt sponsorship or other media, arguably supports the normalization of gambling.”
Many underage players use their parents’ online accounts without permission (this amounts to 22% of those using their parents’ accounts). This and use of other authorised funds may amount to money laundering per se. Coupled with the greater exposure of gambling to children as shown above, which can exacerbate problem gambling (where 0.9% of children are problem gamblers and 2.3% are at risk gamblers) the propensity to steal is even greater. Given the GC’s recent crackdown on this, operators need to ensure that child problem gamblers risk factors and red flags are addressed and detection systems are in place.
The National Lottery
Given the high occurrence of underage gambling offline and online with National Lottery products, it is possible that the GC will take steps against Camelot. The timing is interesting as the GC has recently finalised an enforcement strategy consultation into the National Lottery. Therefore as set out in that enforcement strategy it may investigate Camelot’s possible failings to police its retail outlets against breach of required underage controls. After investigation a decision will be taken on whether or not to go ahead with enforcement. If any enforcement does result and if a financial penalty is levied, then the calculation of that penalty will have to take into account any gain by Camelot from underage gambling. This same survey may therefore be used in that calculation, taking into account sales to 2-3% of 11-16 year olds.
Contact the Author
I have over 20 years of experience in betting & gaming, regulation & compliance, intellectual property and commercial contracts. Prior to joining Gordon Dadds regulatory solutions team in 2017, I was General Counsel & Chief Compliance Officer at Mansion Group for 10 years. My key specialisms are gambling law and regulation, compliance, governance and risk management, AML policies and procedures, IT contracts and technology licensing, entertainment and media contracts and copyright licensing, sports sponsorship agreements, ecommerce and internet law. I am a member of IMGL (International Masters of Gaming Law), GBGA (Gibraltar Betting & Gaming Association) and ICA (International Compliance Association).