Fiver on the Nose Love?
Paula Lee and Nichola Marshall discuss how rapid changes in the marketplace have changed the legal landscape for gambling operators, putting hope of redress on the horizon for disordered gamblers whose lives have been ruined.
Posted on 09 November 2020
Following an approach by an industry insider who wanted to help disordered gamblers gain access to justice, Nichola and I have immersed ourselves in gambling practices.
The learning curve has been steep, sometimes shocking and often heart-breaking.
Hiding in plain sight – on a high street, in a bedroom, at a football match, anywhere in fact – there is a world of regret, exploitation and shattered lives underpinning an industry that claims to be ‘just a bit of fun’ but is solely motivated by the £14 billion in profit it generates year after year after year.
Half the adults in the UK gamble at least once a month and estimates of disordered gambling rates range from 340,000 to 1.4 million, depending on which study you look at. At the lower end of the scale, that is a number equal to the population of a city the size of Cardiff.
We learned four things:
The relationship between the gambler and the licensed operator is openly financially hostile.
From a legal perspective, it is highly unusual to see a contract whose very purpose is making one party a winner and the other a ‘loser’, with no middle ground. Kenny Alexander the former GVC boss told the House of Lords Select Committee that ‘99 per cent of their customers will lose’.
The more a ‘loser’ loses, the higher the status they are likely to be afforded, and the ‘better’ the service they are likely to receive.
Good ‘losers’ are so valuable to the licensed operator, that many are substantially rewarded for their ‘success’. The House of Lords Gambling Industry Select Committee estimated 60 per cent of online gambling profits come from the five per cent of customers experiencing gambling problems. The greater the gambling problem someone has, the higher the profit for the operator.
The rewards for ‘losers’ include cash ‘bonuses’ and ‘free’ bets running into thousands of pounds or all-expenses VIP trips to the Races or a box at a Premiership matches. An especially good loser will likely be assigned a personal manager, whose job it is to make the ‘loser's’ losing experience pleasurable enough that they keep on doing what the operator is grooming them to do: continuing to lose more than they can afford to lose.
Winners are not welcome to gambling operators. They are neither wanted, desired nor retained.
Losers believe that they will win. It’s the illusion of control that is so harmful, and the illusion is reinforced by the ‘stop when the fun stops’ messaging.
The fun does stop for many, but that does not mean they can stop, even when or if they want to.
This is best summed up by Matt Zarb-Cousin, a recovered gambling addict, co-founder of Gamban and director of Clean Up Gambling.
He says: “I believe gambling is the only addiction where you can convince yourself that by carrying on with the thing that you’re addicted to, it will solve all the problems that the addiction creates. That is because you can convince yourself that you’re one win away, or a succession of wins away, from clearing your debts and winning it all back. And that's a very powerful thing to be able to tell yourself, to carry on even though it's irrational. I think it’s important to educate people in recovery about how it's impossible to win."
The industry acknowledges the potential for harm, but their messaging of ‘when the fun stops, stop’ makes it clear that they see the issue as one for the individual to solve and disordered gamblers have been regarded as being solely responsible for the harm they experience.
The idea of individual autonomy is so deeply rooted in our society that only recently have we started to have a better understanding of just how vulnerable to assault our independent decision making truly is, especially in the face of unrelenting, individually targeted and mainstream marketing.
When the fun stops, and an individual has been harmed, there is no redress, no ombudsman to turn to, and the law in this area is not a friend of the ‘losers’ – yet.
Gambling disorder is now a recognised psychiatric illness. The Industry knows this – its practices create disordered gamblers and then exploit them, insulated by the knowledge that almost by definition it will be difficult, if not impossible, for the ruined individual to fund complex litigation.
Even if the ‘loser’ could fund complex litigation, the law - both case and statutory - is outdated and “not fit for purpose”.
As a condition of their gambling licence, operators are obliged under the social responsibility code to protect vulnerable people from being harmed or exploited by gambling. The industry is expected to interact with their customers in a way which minimises the risk of them experiencing the harms associated with gambling. The Gambling Commission’s duty is to police and promote compliance with these objectives.
But when the ‘loser’ has been financially, and often mentally, ruined by operators acting in breach of their social responsibility obligations, the problem is that the Commission has a legal relationship with the licensed operators and not the individual gambler.
So, while the Commission can and does levy vast fines upon operators for breaching the licence conditions, the individual is not compensated for the harm caused to them by the operator.
To drive the point home, the Gambling Act 2005 expressly provides that a failure by the licensing operators to comply with a provision of a code shall not of itself make them liable to criminal or civil proceedings.
Does common law offer a solution?
The leading authority is the High Court case of ‘Calvert’, which held that providing certain criteria are met, then a duty of care could be owed by a licensing operator to a disordered gambler. That’s good news.
Calvert was decided before the Gambling Act 2005 came into force, before the advent of mass online gambling, before ownership of a smartphone was as common as ownership of a toothbrush, and certainly before the emergence of predatory marketing practices.
Combined, those three factors put a readily accessible casino in everyone’s pocket 24/7.
To which some might say, ‘and what’s the problem with 24/7 access to a casino?’
The problem (and the danger) is that they are casinos without restrictions. Stake limits, speed of play, deposit limits, spin speeds and so on do not apply to the online world. It is entirely possible to drop an entire month’s wages in under five minutes standing at a bus stop, sitting in a bath, alone in your bedroom, even watching your child’s school play.
We are confident that in taking into account the practices of the modern-day gambling industry, the duty of care found to exist in Calvert can be relied upon, and possibly built upon, to provide redress for the harm caused to disordered gamblers, especially when those gamblers tried to stop when the fun stopped.
There is little doubt that change is coming, or more accurately there is little doubt of a government’s willingness to explore whether further regulation is needed.
Reports by the House of Lords, the All-Party Parliamentary Group on Gambling Harm, the Social Market Foundation and the Public Accounts Committee regarding the harm caused by certain industry practices are eye-opening. None of the recommendations will make for easy reading in the boardrooms of the licensed operators.
But regulatory change, as welcome as it is, will take time, and time equals further harm.
It is estimated by Gambling with Lives that there are between 250 and 650 gambling related deaths every year. That is more than one death every day, added to which the House of Lords found that for each disordered gambler, there are six other people adversely affected by gambling harm.
The numbers of individuals and families suffering harm are staggering. If regulatory change takes even just 12 months, a further 350 lives are likely to be lost and countless others will suffer serious harm.
So while one hopes that further regulation will be introduced and that it will provide a safer landscape for future gamblers, there is the immediate issue of redress for those disordered gamblers who are experiencing, or who have experienced, harm as a result of the practices of licensed operators, and that will be our focus.
Paula and Nichola are partners at Leigh Day solicitors and specialise in large group action claims on behalf of individuals who have suffered harm, often at the hands of companies or multi-nationals - and they ensure access to justice by funding appropriate cases on a no-win, no-fee basis.