22/01/2014 11:04 GMT | Updated 24/03/2014 05:59 GMT

Gambling Bill's Regulatory Failings Highlighted in Lords Debate

Last week's committee stage debate in the House of Lords highlighted concern and confusion over the powers afforded to the Gambling Commission to regulate foreign operators, under the proposed Gambling Bill.

During Grand committee, Lord Gardiner of Kimble noted that 'The Gambling Commission continues to build links and share information with regulatory bodies across the world' yet under the law enshrined in the Gambling Act 2005, UK bodies do not have the power to share information with overseas regulators. This position would not change should the proposed Gambling Bill come into effect in its current form. It is a fundamental, overlooked flaw in the Government's proposals.

We consider that sharing information with trusted local regulators is absolutely essential to any point of consumption licensing regime. Without it, we consider there would be a growth in operators using their UK licence merely as a 'flag of convenience' to entice consumers and operating beyond supervision, for them it is the best of both worlds.

We encourage the Government to give proper consideration to the limits of the Gambling Commission's regulatory powers. Lord Gardiner noted that 'The Government and Gambling Commission are confident that the Bill can credibly be enforced'. However, the Gambling Commission does not have any extra territorial power to enforce a regulatory regime and does not have the power to share information with local regulators who are able to enforce a local regulatory regime. Baroness Howe of Idlicote pointed out that the Bill is, 'Far too much carrot, and we are lacking on the stick side of the argument.' We agree with the Baroness and are pleased that enforcement of regulation has been placed high on the agenda. We hope the government will take this opportunity to reconsider the Bill and its effects.

The recent Canbet story comes as a salutary warning of the dangers that will face consumers regularly under the current proposals. It was revealed that the firm's customers had been unable to withdraw winnings for the past three months due to what Canbet referred to as, 'An ongoing system malfunction.' Whilst licensed in the UK, with offices in London, Canbet's main operation is based in Melbourne and, as such, it has been difficult for the Gambling Commission to regulate the firm and find a solution for its customers. This kind of situation would become all too common under the government's proposals.

This debate on how consumer protection can be managed and enforced on a cross-border basis is crucial to the end result and we are keen to work with the government to find a solution that both satisfies their objectives and ensures protection of British consumers. Consumer protection is said to be at the heart of the proposed legislation, but in fact it risks encouraging consumers access to unregulated or poorly regulated operators in far flung territories and places an unjustified burden on responsible operators. If these fundamental issues are not addressed we consider that the decision to pass the legislation will be in breach of EU law.