'This space is money, money, money, smokescreens and mirrors' - the problem with the problem gambling sector

In recent years, there has been a growing awareness and scrutiny of the problems that a small minority suffer as a consequence of their gambling. As this awareness has grown, so has the increasingly vast sum given to organisations that support individuals who experience difficulties or those conducting research into gambling addiction.

This month Betfred paid a £3.25 million settlement after anti-money laundering and social responsibility failures were identified by the Gambling Commission. That was the latest in a string of seven- and eight-figure payments from bookmakers, whose settlements will be passed on by the Gambling Commission to what it calls "socially responsible purposes". It is a funding pipeline pumping ever greater sums into the sector and has undoubtedly enabled good to be done, but is also increasingly prompting sharp questions to be asked about how the money is allocated and why so little is done to determine whether grants are used effectively.

Central to the UK government's gambling reforms is the aspiration that fewer people suffer harm in future and that those who do end up in trouble will receive better assistance, something that the Gambling Commission's funding pipeline is central to. However, many now believe that there is not simply a problem with problem gambling but also with the sector expected to tackle it.

Betfred were recently mandated to pay a £3.25 million regulatory settlementCredit: Chris Bourchier

That is the view of Ryan Pitcher, who recently announced plans to close down Nowt Left To Lose, an officially recognised non-profit platform that has sought to provide support and information to those who might be suffering from gambling-related problems.

In an open letter to Gambling Commission chief executive Andrew Rhodes posted on LinkedIn, Pitcher delivered a withering assessment of the harm prevention sector. He warned that organisations were acting dishonestly and spending money for purposes far removed from those for which it was intended. He spoke of being "attacked and ostracised" from within the sector and claimed "politics and greed are the rulers of this sphere".

Speaking to the Racing Post, Pitcher describes the space as "dirty", one in which there is a misappropriation of money that should be helping those in need. Moreover, Pitcher and others are also critical of the body that regulates the businesses providing most of the charitable funding, accusing the Gambling Commission of backing politically motivated projects and failing to ensure money is properly spent.

That allegation is connected to regulatory settlements, whereby, in lieu of paying a fine following a licensing breach, gambling firms are required to transfer the penalty sum to charitable or public organisations that must propose to the Gambling Commission a specific project to be funded. From March 2019 to November 2022, the settlements resulted in £48.7 million being allocated. Further settlements have been announced by the Gambling Commission since then – including the Betfred £3.25m payment – but the recipients of the money have not yet been revealed.

Completely separate from the system of settlements is the routine funding that goes from gambling firms to the problem gambling sector.

The Gambling Commission determines which organisations are allowed to join an approved group of service providers known as the RET (research, education and treatment) list, whose members can seek contributions from gambling operators. In the most recently documented financial year from April 2021 to March 2022, 14 organisations received a combined total of just over £40m.

Unlike the settlements system, this RET model is based on operators making voluntary contributions. It could soon become a thing of the past. The Conservative government's gambling white paper includes plans for a statutory levy paid by businesses and distributed by the Gambling Commission to fund research, education and treatment of gambling harms. The Gambling Commission believes that would make the RET list redundant, while it additionally wants to "consider the impact of a levy system on the destination of any future regulatory settlements".

The regulator believes the system must change. So do many others – although not necessarily for the same reasons as the Gambling Commission.

A waste of money?

Dan Waugh, a partner at strategic advisory firm Regulus Partners, has produced reams of work focused on the problem gambling sector and highlighted the extent to which large sums of money are being poorly spent, often by groups opposed in principle to gambling.

Waugh says: "Some of the money has gone to good places but an awful lot has been wasted on research that has been either incompetent or politically motivated and frankly dishonest. These are funds that should have been spent on helping people suffering from gambling disorder.

"The Gambling Commission says it bears no responsibility for these projects, despite the fact it is in charge of the approvals process and so determines where the money goes."

Like Waugh, the Gambling Business Group – a trade association that represents land-based gambling businesses – is dissatisfied with the quality of work being undertaken in the name of reducing gambling harm.

Chief executive Peter Hannibal says: "Our members have been concerned for some time that too much of the research and reports in the name of responsible gambling have not been peer reviewed or quality checked before publication, only to then to be accepted on 'face value' by many in authority.

"The degradation in the quality of research being produced, intentionally or otherwise, plays into the hands of those who are looking for anything to bring gambling down, whether factual or not. For far too long the UK gambling industry has been at best passive, at worst blind to the impact of this moving narrative."

Among the most serious examples of misrepresentation has been work conducted into the extent of the link between gambling harm and suicide.

Prior to being disbanded, the government body Public Health England published a widely reported study in 2021 that estimated more than 409 suicides in England each year are associated with problem gambling. It was a conclusion built on flimsy foundations.

"We demonstrated both the original PHE report and the subsequent version amended by the DHSC [Department of Health and Social Care] were methodologically unsound and mathematically incorrect," says Waugh. "We shared our concerns with the Gambling Commission, which had endorsed the PHE report without checking whether the claims were accurate.

"We discovered through a freedom of information request that the Gambling Commission actually agreed with our analysis that the PHE calculation was unreliable – but it elected not to make this view public and appears not to have informed the DCMS [Department for Digital, Culture, Media and Sport].

"Despite the fact that the Gambling Commission knew the suicide statistics were made up, its Advisory Board for Safer Gambling published a report in May last year, stating that statistics should be used as a catalyst for action."

The Gambling Commission has been accused of failing to ensure money intended to support those suffering as a result of gambling is properly spent

In response to claims of official inaccuracies, a Gambling Commission spokesperson says: "Where we use data in our regulatory capacity, we will consider how robust the methodology is and what weight can be attached to the data. We do not routinely comment on the methodological approaches of others but where necessary will challenge the inappropriate use of our official statistics."

Robert Mabbett, crowned Racing Post/SIS Betting Shop Manager of the Year in 2016, subsequently spent five years working for Gordon Moody, a charity dedicated to providing residential treatment and support for gambling addiction. Now based with Better Change, which also seeks to assist those with gambling issues, he has experience of coming to terms with a loved one's suicide and is adamant nobody is helped by misleading data.

"When suicide happened to our family, all we wanted to know was why," says Mabbett. "For that reason, I completely understand why if people who are grieving get a clue, they will latch on to that. However, this is a deeply complex issue.

"I collected a lot of information from the applications sent in to Gordon Moody. I found 60 per cent of people who applied to us had a diagnosed mental health condition. The longer I worked for Gordon Moody, I found it was less about gambling and more about mental health.

"I'm not dismissing that gambling isn't present in some of these cases, it absolutely is, but to solve the problem we need to know where the problem lies and what the issues are. I'm therefore not a fan of misreporting suicide data in order to force a political agenda."

Also unhelpfully opaque has been some of the information put out by the NHS, which no longer accepts voluntary funding from gambling firms for its gambling clinics but is poised to take income from the statutory levy.

Waugh says: "It recently said there has been record growth in the number of people receiving treatment. That is true if you only look at NHS services – where a doubling in treatment-seeking is directly linked to an eight-fold expansion of clinics. It ignores the fact 80 to 90 per cent of the people receiving treatment are looked after by charitable providers."

'It's a shambles'

There are, however, worries that the sector is not delivering outcomes commensurate with the resources pumped into it.

Explaining how the landscape was transformed, Mabbett says: "The Betting and Gaming Council pledged funding would be increased tenfold over four years. They delivered on that, so a lot more money was made available. That led to organisations growing at pace and new organisations entering the space.

"I'm not going to say which ones are great and which ones aren't but there does need to be scrutiny over the distribution of funds. Seven-figure sums are being donated to organisations. That money could do a lot of good, but if some people are not using those funds in the right way, they need to be outed. If not, there will be a complete lack of trust in the sector and we won't be able to help anyone."

Pitcher shares that fear, which is why he has come out as a whistleblower.

"Anyone could create an organisation," he says. "You set up a website and lay out whether you work in research, education, treatment, whatever you want, all under the umbrella of gambling harm. You then get on a RET list that is literally ungoverned. Once you're on the list, the world is your oyster.

"Massive sums of money can be moved around without any oversight or governance. It's all about friendships, who you know and what you know."

Ryan Pitcher: "There is no oversight. Nobody is asking any questions about where this money is going"

Pitcher's description of the third sector becomes ever grimmer.

"This space is literally money, money, money," he says. "It's all smokescreens and mirrors but when you complain, nobody cares. There is no oversight. Nobody is asking any questions about where this money is going. We're talking hundreds of thousands of pounds going into business accounts and there is no oversight or governance. It's crazy. It's a shambles.

"There is double dipping, whereby an organisation gets money from an obscure funding source, probably from one outside of the problem gambling space while also charging others to deliver the same project that has already been fully funded. All this money is being thrown around and some of it is going into the wrong hands and being abused.

"From time to time, people will talk about the impact of projects, but it's very easy for people to hide things. Some organisations are bloating numbers and exaggerating impact but nobody ever challenges them."

That absence of external scrutiny last year shocked Julian Knight, then chair of the DCMS select committee. During an exchange with Rhodes, Knight expressed astonishment the regulator does nothing to check whether funding distributed through regulatory settlements is spent as per the initial application. He was equally bemused that the Gambling Commission then chooses not to assess the outcome of projects.

Gambling Commission CEO Andrew Rhodes has been challenged in parliament over the regulator's failure to scrutinise how regulatory settlements are spent

"There seems to be money going out the door and no accountability for that money, apart from when you make the award," said Knight. "This money just splashes out there and you have no idea in terms of what this impacts with the licensees. I am struggling to think precisely as an organisation how you are doing your job."

Defending its position, the Gambling Commission argues there has been "a great deal of misunderstanding about regulatory settlements".

A spokesperson says: "When a regulatory settlement occurs, the commission’s statement of principles for determining financial penalties sets out criteria for approving the destination of the financial element, including that proposals must be for socially responsible purposes which address gambling-related harms or other licensing objectives and should demonstrate how they will accelerate progress.

"It is a requirement of any regulatory settlements that evaluation must be built into the proposals. As part of our process for reviewing proposals, we consider two important aspects: whether there is sufficient oversight for the programme of work, and whether there are processes in place for evaluation of the project.

"Therefore, at the point of making a decision on whether a proposal meets the criteria for a settlement, the commission assesses whether there is a process for metrics and evaluation. We consider it appropriate that the organisations who deliver the projects retain oversight and responsibility alongside their relevant standards or regulatory bodies. This avoids duplication of governance and oversight, and ensures that the commission is focused on delivering its own regulatory roles."

It also means nobody is marking extremely valuable homework. Almost £50m has been given out in settlements by the Gambling Commission yet critics say the regulator fails to make itself accountable for the effectiveness or otherwise of that money. There appears to be no official oversight of whether it is making any meaningful difference.

Former betting shop manager of the year Robert Mabbett has gone on to work in the sector that seeks to help those suffering gambling-related problemsCredit: Edward Whitaker

Mabbett is clear why it is vital there is regulatory understanding of whether money is being well spent.

"I do want to see a lot of scrutiny about where the money goes because I don't want people harmed from gambling," says Mabbett. "I want every single penny of the funding to go to good things and I want to see the impact of that money.

"Gambling Commission statistics show gambling harm rates have fallen but we can't show our working out because we haven't done any evaluation. Wouldn't it be great if we could tell people how we got there?"

Mabbett adds: "Nobody is entitled to this money. You have to earn it. The need for evaluation is massive. If that isn't the Gambling Commission's role, they need to be stronger in holding people to account if those people aren't producing the outputs that were agreed in order to get the funding."

Mabbett also believes Pitcher should be applauded for raising awareness of alleged failings in the problem gambling space.

"It's very courageous of Ryan to speak out – I hope his words don't go unheard," says Mabbett. The recipient of his praise does not want to point the finger at specific organisations in a public forum. Nonetheless, a lid has been lifted.

"When you go to events and conferences, much of the discussion in the corridors is all about money and where people are getting it," he says.

"That felt like a dark undertone to me because those events shouldn't be about money. Even worse is that it also impacts service users. A gentleman who contacted me was going through a really difficult time. I forwarded him to a service provider that started asking him about Nowt Left To Lose and where we get our money. I've heard loads of similar stories."

Pitcher adds: "I don't wish for my complaints to come across as bitter. However, some people within this space have been given fantastic opportunities to do wholesomely good honest work but then gone on to misappropriate funds and perhaps even commit fraud, grossly exaggerate impact and just do dodgy stuff in general. Unfortunately, this will be at the expense of people who genuinely care and could do many sincere and meaningful projects where all the money is spent on the right things rather than lining their own pockets."

In order to support all those people Pitcher knows genuinely do care, and more importantly those individuals badly in need of that care, the problems with the problem gambling sector must be acknowledged and then tackled.

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