31Oct

Gambling Commission Annual Report 2023-2024

31st October 2024 Ting Fung 36

The Gambling Commission’s latest Annual report and accounts (the “Annual Report”) for the reporting period 1 April 2023 to 31 March 2024 (the “Period”) was published on 17 October 2024. Key focuses during the Period include the implementation of the Gambling Act Review and the Gambling Commission’s award of the Fourth National Lottery Licence, which led to the first ever change of licensee in the history of the National Lottery.

Performance report

The Annual Report contains a performance report in which the Gambling Commission provides a detailed overview of its delivery during the Period against the five strategic objectives from its 2021-2024 Corporate Strategy. We have summarised some key information from this performance report below, along with other highlights from the Annual Report.

Protecting children and vulnerable people from being harmed or exploited by gambling

Following the publication of the Gambling Act Review White Paper, there were a number of consultations in the Period in relation to proposed changes to the Licence Conditions and Codes of Practice (“LCCP”) and the Remote gambling and software technical standards. Proposals included: (a) improving consumer choice on direct marketing; (b) strengthening age verification on premises; and (c) reviewing socially responsible incentives to ensure incentives such as free bets and bonuses do not encourage excessive or harmful gambling. The issue that proved most controversial related to financial risk checks, with the Gambling Commission reiterating in the Annual Report that this a complex area as it aims to “protect vulnerable people from harm whilst respecting the freedom of others to gamble freely”. Therefore “ committed to a step-by-step approach to implementation and a pilot on the enhanced financial risk assessments to test the process and impacts on consumers.”

The Gambling Commission sets out the several changes it made to the LCCP during the Period including by: (a) setting out its approach to ‘vulnerability’; (b) extending the requirement to participate in GAMSTOP to all gambling licensees that make or accept bets by telephone and email; and (c) adding an additional reportable event that requires all gambling licensees to inform it when they become aware that a person who has gambled with them has died by suicide.

Gambling Commission publications in the Period aimed at improving the breadth and quality of data included:

The Gambling Survey for Great Britain: Statistics on gambling participation – Annual report Year 1 (2023): Official statistics (See Other highlights below for further detail);
Evidence Gaps and Priorities 2023-2026 (July 2023); and
Young People and Gambling Report (November 2023).

2. A fairer market and more informed consumers

The Gambling Commission points out that it has reviewed its approach to tackling non–compliant terms and practices, including the processing of customer withdrawals. Delays to the withdrawal of funds from accounts, (more than 2,400 complaints during 2023) remained the primary consumer complaint during the Period. The Gambling Commission has previously worked with the Competition and Markets Authority and updated the LCCP to clarify licensees’ responsibilities, including the requirement that licensees do not seek to verify information at the point of withdrawal that they had the opportunity to do earlier in the process. In the Annual Report the Gambling Commission reiterates that “Where such practices are identified, we will continue to hold licensees to account.” Please see our blog Account withdrawals: The mask operators cannot hide behind for more information.

In addition to initial outputs from the Consumer Voice research programme, the Gambling Commission has completed 58 website reviews, with 51 websites found to be either complaint or to have minor issues relating to things such as promotional bonus offer terms. The remaining websites reviewed raised more significant issues requiring further investigation and/or escalation.

Keeping crime out of gambling

The Gambling Commission explains that it has continued to work with partners to undertake intelligence-led disruption and enforcement initiatives to contribute to a reduction in crime associated with gambling, stating that “our collection, analysis and sharing of intelligence with other regulators and agencies remains a cornerstone of our work.” It has held discussions with search engine providers to discuss referrals and further action on search results and talks are ongoing to improve its ability to disrupt unlicensed operators.

Key figures in the Period in this area include:

384 cease and desist and disruption notices were issued to unlicensed operators resulting in 136 website restrictions through suspension or IP blocking; and
122 compliance assessments of online and land-based operators, 77 website reviews and 182 security audits were conducted.

In addition, from April 2023, the Gambling Commission also assumed responsibility for collecting the Economic Crime Levy from licensed casino operators.

Optimising returns to good causes from the National Lottery

Returns to good causes which were derived from a combination of the Third and Fourth Licence period totalled £1.7 billion at the end of the financial year. The Period saw the transition of the National Lottery licence from Camelot to Allwyn, who were formally granted the Fourth Licence to operate the National Lottery on 1 February 2024. Subject to the resolution of the legal challenges this licence will run for 10 years.

Key changes to the Fourth Licence include:

A new ‘Incentive Mechanism’ so that all National Lottery products will now make returns to good causes at the same level (meaning Allwyn will only see profits rise if returns to good causes increase); and
A move to an outcomes-based approach that will give Allwyn greater responsibility to fulfil its obligations, while retaining the Gambling Commission’s powers to intervene if they fail to do so.

Improving gambling regulation

The Gambling Commission recognises the need for an upgrade to existing systems in order to “serve the needs of the business more efficiently” and expects this to be completed during 2024 to 2025. Its requirement that licensees send returns quarterly is intended to ensure the information it receives is relevant and timely, and enables it to identify issues arising as early as possible.

Further information on the Gambling Commission’s plans for gambling regulation are set out in its Corporate Strategy 2024 to 2027 published on 8 April 2024, with commitments to be detailed in annual business plans and outcomes published in future annual reports.

Other highlights

Gambling Commission research

In respect of other datasets referred to in the Annual Report, the Gambling Commission’s Cost of Living (2023) research found that:

“1 in 5 gamblers who reported changes in their gambling behaviour (either increased or decreased) said this was entirely due to increased cost of living. In addition, 8.5 per cent of gamblers reported using gambling to supplement their income on a regular basis.”

The Gambling Commission therefore continues to stress the need for operator vigilance during these times of heightened consumer vulnerability.

Gambling Survey for Great Britain

In respect of the Gambling Survey for Great Britain (“GSGB”), which focuses on the types of gambling activities that people take part in and the reasons why people gamble, the Annual Report emphasises that because the GSGB is a new survey, it does mean that it cannot compare GSGB data to data from previous alternative surveys and that, with time, the data collected will grow and enable it to look at trends and comparisons across this data source.

Enforcement?

The Annual Report notes that in 2023 – 2024, enforcement action led to the suspension of one operating licence and £13.4 million in fines or regulatory settlements: a reduction on the previous year. The Gambling Commission acknowledges that it has seen a significant increase in compliance from larger operators at the point of their assessment, with the rate of operators achieving compliant first-time outcomes doubling and the rate for the largest operators almost trebling in the past two years.

In terms of other operational activities, 133 operator licenses were processed and 122 compliance assessments were conducted for online and land-based operators in the Period.

Industry figures and statistics

Gross Gambling Yield (“GGY”) for the British gambling industry in 2022-2023 was £15.1 billion (a 6.8% increase when compared to April 2021 – March 2022) and GGY for the British remote and/or online sector was £6.5 billion in 2022 – 2023 (a 2.8% increase when compared to April 2021 to March 2022).

For the Period, the Gambling Commission’s fee income comprised:

£1.21 million from operator applications (down from £2.05 million in 2022-2023)
£0.75 million from personal licence fees (down from £0.76 million in 2022-2023)
£23.86 million from operator annual licence fees (up from £22.89 million in 2022-2023)
£0.36 million from miscellaneous sources (down from £0.39 million in 2022-2023)

In terms of expenditure, gambling regulation costs in the Period totalled £21.07 million (up from £19.33 million in 2022-2023), and National Lottery functions accounted for £19.34 million (down from £21.58 million in 2022-2023), of which £17.03 million was spent on the National Lottery Fourth Licence competition. Overall, the Gambling Commission’s table of year-on-year expenditure for gambling and National Lottery regulation shows an increase in operational costs since 2019-2020.

What’s next?

In the Foreword of the Annual Report, Gambling Commission Chair, Marcus Boyle and its Chief Executive Officer, Andrew Rhodes, both agree that:

“The next few years provide a once-in-a-generation opportunity to make gambling safer, fairer and crime free.”

The Gambling Commission’s next steps are set out in its Corporate Strategy 2024 to 2027. For further details on the Corporate Strategy 2024 to 2027, see the previous blog from Gemma Boore.

18Oct

Gemma Boore to moderate direct marketing roundtable at EGR London Summit during Safer Gambling Week

18th October 2024 Harris Hagan 44

Senior Associate, Gemma Boore will be co-hosting a roundtable discussion at the EGR London Summit 2024, which takes place next week on 23 October 2024 at etc.venues Chancery Lane.

Gemma, alongside co-host David Murphy, Chief Marketing Officer at QiH Group, will moderate the roundtable, Direct marketing practice: striking the right balance for brand awareness and customer choice, during which attendees will share their perspectives on gambling marketing and advertising.

Gemma will share her legal perspective on the unique challenges faced by the gambling industry when marketing their brands. For example, the Gambling Commission’s proposals regarding direct marketing and cross-selling, which Gemma previously discussed in her blog: White Paper Series: Direct marketing and cross-selling in the crossfire. Further information and discussion regarding the Gambling Commission’s implementation of these proposals (which will come into force on 1 May 2025) can be found in our subsequent blog: Gambling Commission publishes Summer 2023 Consultation Response and Betting & Gaming Council announces New Industry Voluntary Code.

The EGR London Summit 2024 is an exclusive industry event and includes a full agenda of discussions throughout the day focussing on safer gambling strategies and broader regulatory updates.

For more information and to apply to attend, visit the EGR London Summit website.

30Jul

Gambling Survey of Great Britain: Publication of first annual report

30th July 2024 Chris Biggs 76

After more than 3 years of development and significant industry scrutiny, the Gambling Commission published the first Gambling Survey for Great Britain (“GSGB”) Annual Report on 25 July 2024 (“GSGB Annual Report”).

In a press release announcing the publication, the Gambling Commission stated that this first edition features responses from 9,804 people “but will increase to around 20,000 by next year.” The Gambling Commission goes on to state that the GSGB Annual Report provides greater insight into attitudes and gambling behaviours:

“presenting a fuller picture, illuminating participation rates, the type of gambling activities participated in, experiences and reasons for gambling, and the consequences that gambling can have on individuals and others close to them.”

We have previously explained the GSGB’s structure and purpose in our blog Gambling Survey of Great Britain: Gambling Commission’s new approach to collecting gambling participation and prevalence data.

We now turn to the key facts outlined in the GSGB Annual Report and consider the information published by the Gambling Commission to support the GSGB.

Key Facts

The GSGB Annual Report highlights key facts from the data collected from adults aged 18 years and older living in Great Britain, summarised below.

Participation

48% of GSGB participants participated in any form of gambling in the past four weeks. This figure dropped to 27% when those who only participated in lottery draws were excluded.

GSGB participants were more likely to gamble online (37%) than in-person (29%), however this difference was largely accounted for by people who purchase lottery tickets online. Excluding those individuals, GSGB participants were more likely to gamble in-person (18%) than online (15%).

The most commonly reported gambling activities were the National Lottery (31%), purchasing tickets for other charity lotteries (16%) and buying scratchcards (13%). The average number of activities for those who had participated in gambling in the past 4 weeks was 2.2 activities during that period.

Experiences of and reasons for gambling

41% of GSGB participants who had gambled in the past 12 months rated the last time they gambled with a positive score (6 or above on a scale of 0 to 10), 37% expressed they neither loved nor hated it (score of 5) and 21% gave a negative score. When participating in lottery draws was excluded the pattern displayed a slightly higher proportion of positive scores, with 50% positive, 31% neutral and 19% negative.

The most common reasons that GSGB participants gambled were for the chance of winning big money (86%), because gambling is fun (70%), to make money (58%) and because it was exciting (55%).

Figure 11 of the GSGB Annual Report displays the full list of reasons for gambling in the past 12 months surveyed, represented below where the percentages comprise individuals who reported ‘sometimes’, ‘often’ or ‘always’ as a reason for gambling for each statement.

Notably, GSGB participants were also surveyed on the types of leisure activities in which they participated in the past 4 weeks. The vast majority of participants indicated they spent time with friends and family (98%), watched TV (95%) and listened to music (91%), with many also reported shopping (80%), eating out at restaurants (73%), participating in sports or exercise (64%), doing DIY or gardening (61%) or going to pubs, bars or clubs (50%).

Consequences from gambling

GSGB participants who had bet on non-sports events in person were over 9 times more likely than average to have a score of 8 or higher on the Problem Gambling Severity Index (“PGSI”), which represents problem gambling by which a person will have “experienced adverse consequences from their gambling and may have lost control of their behaviour.”

GSGB participants who had gambled on online slots were over 6 times more likely than average to have a PGSI score of 8 or higher.

41.4% of GSGB participants with a PGSI score of 8 or higher reported experiencing at least one of the severe adverse consequences asked about.

The severe adverse consequences surveyed required ‘yes’ or ‘no’ responses and consisted of: (1) losing something of significant financial value because of gambling; (2) relationship with spouse or partner or family member breaking down because of gambling; (3) experiencing violence or abuse because of gambling; and (4) committing a crime to fund gambling or pay gambling debts. Overall, 2.8% of GSGB participants who had gambled in the past 12 months reported experiencing at least one severe consequence.

The Gambling Commission also highlights that the GSGB is the first time that it has collected data on the consequences of someone else gambling. 47.9% of GSGB participants reported that someone close to them gambled. The most reported severe consequence of someone else gambling was the breakdown of a relationship with a spouse, partner or family member (3.5%).

Gambling Commission Guidance

To accompany the GSGB Annual Report, the Gambling Commission released Guidance on using statistics from the Gambling Survey for Great Britain (“GSGB Guidance”). The purpose of the GSGB Guidance is to ensure the GSGB data is reported correctly, with the Gambling Commission reiterating that these official statistics are new and are collected using a different methodology than previous official statistics.

The GSGB Guidance therefore lists the purposes for which the GSGB can and can’t be used, as well as where it can be used with some caution, in relation to the data on: (1) gambling participation; and (2) the consequences of gambling within the GSGB Annual Report. Of note, the GSGB can be used:

to look at patterns within the data amongst different demographic groups;
to assess future trends and changes in gambling participation and consequences of gambling, measuring changes against the 2024 baseline; and
to describe the range of consequences that someone may experience as a result of their own gambling and as a result of someone else’s gambling.

The GSGB can be used with some caution “until further work is completed”:

to provide estimates of gambling participation amongst adults in Great Britain;
to provide estimates of PGSI scores amongst adults in Great Britain; and
to provide estimates of the prevalence of consequences of gambling amongst adults in Great Britain.

The GSGB should not be used:

to provide direct comparisons with results from prior gambling or health surveys;
as a measure of addiction to gambling; and
to calculate an overall rate of gambling-related harm in Great Britain.

The GSGB Guidance also addresses the misuse of GSGB statistics. The Gambling Commission encourages the use of the statistics to support the understanding of important issues relating to gambling, but expects that “anyone using official statistics should present the data accurately and in accordance with the guidelines presented .”

Reiterating the message issued by Andrew Rhodes, Chief Executive Officer of the Gambling Commission, in his open letter to the industry in August 2023, if an individual or organisation is found to be using the GSGB inaccurately, the Gambling Commission “may contact them and request that they correct the statistics.” In “severe cases or continued misuse of official statistics”, the Gambling Commission may refer the individual or organisation to the Office of Statistics Regulation (“OSR”).

Whilst the Gambling Commission’s expectations for the use of the GSGB statistics have been made clear, it has not defined what it considers a “severe” case of misuse. However, the Gambling Commission’s Executive Director, Tim Miller, stated during the VIXIO Regulatory Intelligence webinar on 23 July 2024 that the Gambling Commission will challenge any misuse “in an appropriate way” such as by referral to the OSR, which has included “some examples in recent months where has taken those sorts of approaches.” We therefore encourage the industry to ensure its adherence with the GSGB Guidance.

Strengths and Limitations

The Gambling Commission has acknowledged that measuring adverse consequences from gambling in surveys is a challenging task, and cites Professor Patrick Sturgis’ statement in his Assessment of the Gambling Survey for Great Britain (GSGB):

“Given the widespread negative social norms around gambling, particularly harmful gambling, obtaining representative samples and accurate response data is at the more difficult end of what survey researchers seek to measure in general populations.”

Furthermore, the Gambling Commission states in its press release that Professor Sturgis warned that estimates of problem gambling rates should be used with caution due to the risk that the new methodology “substantially overstates the true level of gambling and gambling harm in the population.” The Gambling Commission updated its Gambling Survey for Great Britain – technical report to include a list of the GSGB’s strengths and limitations and caveats for the interpretation of PGSI score estimates produced in the GSGB.

Having set out these strengths and limitations, its expectations for the correct use of the GSGB statistics and the consequences for misuse, the Gambling Commission has seemingly attempted to temper the industry’s concerns about the accuracy and reliability of the new official statistics. During the VIXIO webinar, Miller stated that the Gambling Commission has listened to “recognised experts in data and statistics in developing the GSGB methodology”, as well as the GSGB Guidance. Acknowledging that all methodologies have limitations, Miller stated that a key difference is that the Gambling Commission is “very open and transparent about what the GSGB’s current limitations are”.

Miller defended criticism of the GSGB’s methodology and noted that the Health Survey for England is not without significant issues, having presented an “inflexibility” to update questions for relevance and an inconsistent method for the Gambling Commission to collect data on gambling activity. Miller confirmed the Gambling Commission continues to invest “a significant amount” into the GSGB methodology and is “confident that as to develop , this will become the new gold standard”.

Next Steps

The Gambling Commission explains that in a typical year, there will be four wave-specific publications from the GSGB, plus an annual report. In his blog accompanying the GSGB Annual Report, Ben Haden, Director of Research and Statistics at the Gambling Commission, explains that the GSGB removes its over-reliance on the PGSI as a “proxy for harms” and, even at a headline level, “a more general analysis of wider consequences and behavioural symptoms will give a far more nuanced picture than ever before.” Haden also states that two “in-depth reports” will be released before Christmas as the Gambling Commission commences its deeper analysis of the GSGB statistics.

Where the Gambling Commission acknowledges that the GSGB may overstate the true level of gambling and gambling harm in Great Britain, the release of the GSGB Annual Report will not calm industry concerns about the accuracy of these official statistics. Indeed, we share this concern where the proposals outlined in the White Paper may be evaluated, and potentially derailed, by these statistics. The Gambling Commission promised a “gold standard population survey for the whole of Great Britain”, in its effort to improve the quality, robustness and timeliness of official statistics on gambling behaviour in Great Britain: this is no doubt a challenging task. Therefore, noting Miller’s confidence in the GSGB as the Gambling Commission continues to develop the methodology, we will continue to follow the GSGB closely with the hope that the Gambling Commission moves closer to its aim.

Please get in contact with us if you have any questions about the GSGB Annual Report, the GSGB Guidance or how these statistics may impact your business.

26Jul

Account withdrawals: The mask operators cannot hide behind

26th July 2024 Jessica Wilson 75

On 18 July 2024, the Gambling Commission published a blog by Chief Executive, Andrew Rhodes, on its expectations on account withdrawals, which comes a year after it published its concerns regarding delays customers were experiencing when attempting to withdraw funds.

Whilst the Gambling Commission has seen a reduction in customer complaints regarding withdrawals, they remain the number one subject of complaints the Gambling Commission receives across all operator sizes. As stated in its previous blog, the Gambling Commission reminds operators that it is not acceptable to introduce friction when a customer tries to withdraw from their account, rather than when they deposit into the account, nor should they place their commercial interests over those of their consumers. The Gambling Commission’s blog details several issues it has encountered as part of its compliance work.

Issue 1: Explaining the reason for requesting additional information from the customer or the reason for not paying out

The Gambling Commission has seen operators requesting additional information from customers, as part of the withdrawal process without explaining to the customer the reason for requiring such information.

Under licence condition (“LC”) 17.1.1, operators must obtain and verify a customer’s identity before the customer is permitted to gamble. A customer request to withdraw funds must not result in a requirement for additional information to be supplied as a condition of withdrawal, if the operator could have reasonably requested that information earlier.

The Gambling Commission has reminded operators that it wants transparency for consumers on withdrawals, meaning operators “should make proper efforts to explain to customers what the checks and restrictions are” and that “customers should be informed of the reasons why their withdrawal has been delayed”.

The Gambling Commission has issued a warning that “where we find evidence that an operator has deliberately misled a customer in its communications with them, we will consider the need for regulatory action”.

However, the Gambling Commission does acknowledge that, where there is a knowledge or suspicion of money laundering offences being committed, operators must ensure customers are not tipped-off, which could result in committing an offence under the Proceeds of Crime Act 2002 (“POCA”).

Issue 2: Timing of requests for additional information

The Gambling Commission has seen cases where operators have asked a customer to provide source of funding information after a withdrawal request has been made, with the operator withholding the account balance until the source of funding requests have been satisfied.

Operators are expected to monitor customers’ accounts on an on-going and risk-sensitive basis. The lack of source of funding evidence, in this case, did not prevent the customer from being allowed to make deposits and gamble their funds.

The Gambling Commission has reminded operators that that if they do not have any regulatory concerns about a customer (such as suspicions of money laundering), then there is no valid reason to delay the payout of the withdrawal. Operators “should not…continue to accept deposits indefinitely and then seek to rely on their anti-money laundering procedure to frustrate a withdrawal request”.

Issue 3: Third-party payment methods

The Gambling Commission is aware of instances where an operator has suspected customers funding their accounts through third party payment methods, but only verifying that payment method after a withdrawal request has been made.

The use of third-party payment methods is classified as high risk in the Gambling Commission’s money laundering and terrorist financing risk assessment for the British gambling industry. It is therefore usual for operators to have terms and conditions in place to prevent customers using such payment methods. Where there is suspicion that an account may be funded by a third party, operators should ensure that any investigation is conducted promptly. The Gambling Commission considers it unfair to customers if operators accept deposits from third-party payment methods, but only makes enquiries when a withdrawal request is made.

Issue 4: Confiscation of customer deposits

The Gambling Commission has been made aware that operators sometimes seek to confiscate a customer’s deposit balance, either due to money laundering suspicions or because of a suspected breach of terms and conditions.

The Gambling Commission reminds operators of the offences and statutory requirements under POCA and the Terrorism Act 2000, and that confiscating or returning account funds where there is knowledge or suspicion of money laundering or terrorist financing could result in committing an offence, unless a defence has been sought.

The Gambling Commission further reminds operators of LC 7, which requires operators to ensure that the terms on which gambling is offered are not unfair. The Competitions and Markets Authority has published guidance on unfair terms, with one principle being that consumers should be allowed to withdraw their deposit balance at any time without restriction (except to comply with general regulatory obligations, including anti-money laundering and fraud prevention).

Other reminders

The Gambling Commission’s blog ends with some other useful reminders for operators:

Operators should not have terms that give them undue discretion as to when and how those terms are applied, as such terms could be unfair, as set out in the Gambling Commission’s guidance. For example, they should not have terms that say the operator “may” or “reserves the right” to void or withhold winnings in situations.
Operators must comply with consumer protection laws and treat customers in a fair, open and transparent way.
There may be reasons for an operator to seek further information from a customer for safer gambling purposes as part of a customer interaction, but operators should be transparent with their customers that the reason for requesting more information is for safer gambling purposes. However, the Gambling Commission confirms that it would not be “fair, transparent or necessary to delay or prevent withdrawals purely for customer interaction purposes”.

The Gambling Commission lastly states, “it is imperative that operators review their terms and practices on withdrawals on an ongoing basis, to ensure they are acting compliantly and are treating their customers fairly.”

The Gambling Commission’s blog makes it clear that a delay in processing a customer withdrawal could unmask other areas of non-compliance, including failing to conduct customer due diligence correctly, allowing a customer to gamble without sufficient identity or source of funding checks taking place or failing to verify third-party payment methods before being allowed to gamble

Attempting to correct these mistakes at the point a customer withdraws funds is a mask operators cannot hide behind, as the Gambling Commission has shown that it can see through these actions. Operators should review the Gambling Commission’s guidance in its blog and review their practices to ensure they do not make similar errors. The Gambling Commission’s confirmation that it is not afraid to take regulatory action is a clear warning to operators.

However, operators should not lose sight of their anti-money laundering responsibilities and obligations under POCA, the Terrorism Act 2000, the Licence Conditions and Codes of Practice, the Gambling Commission’s anti-money laundering guidance for casino businesses and for non-casino businesses, and the Money Laundering and Counter-Terrorist Financing (Information on the Payer) Regulations 2017.

If you have any questions or concerns regarding account withdrawals, your policies and processes, your terms and conditions, or your anti-money laundering and counter-terrorism financing responsibilities and obligations, please do reach out to your usual Harris Hagan contact, or get in touch with us here.

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03Apr

Reminder: Changes to LCCP now in force

3rd April 2024 Chris Biggs 119

In accordance with the Gambling Commission’s Changes to multi-operator self-exclusion, notification of deaths by suicide and payment services: Consultation Response (“Consultation Response”) published on 17 October 2023, two changes to the Licence Conditions and Codes of Practice (“LCCP”) came into force on 1 April 2024:

A. Social responsibility code provision 3.5.5 – Remote multi operator self-exclusion

The Gambling Commission has extended the requirement to participate in the GAMSTOP multi-operator scheme to include all gambling licensees that make and accept bets by telephone and emails, which includes betting services conducted via SMS text and instant messaging services such as WhatsApp, Telegram, Facebook Messenger and Instagram Direct. The amended wording to social responsibility code provision 3.5.5 now reads as follows:

“Applies to: All remote licences except: any remote lottery licence the holder of which does not provide facilities for participation in instant win lotteries, ancillary remote betting when relied upon to provide facilities for betting via a machine (commonly known as self-service betting terminals) on premises where a betting or track premises licence has effect, remote general betting (remote platform), remote betting intermediary (trading room only), gaming machine technical, gambling software, host, ancillary remote bingo, and ancillary remote casino licences.

1. Licensees must participate in the national multi-operator self-exclusion scheme.”

B. Licence condition 15.2.2 – Other reportable events

The Gambling Commission has added a requirement to this licence condition that requires all gambling licensees to inform the Gambling Commission when they become aware, or have reasonable cause to suspect, that a person who has gambled with them has died by suicide. This additional requirement at licence condition 15.2.2 reads as follows:

“Applies to: All operating licences.

2. The licensee must notify the Commission, as soon as reasonably practicable, if it knows or has reasonable cause to suspect that a person who has gambled with it has died by suicide, whether or not such suicide is known or suspected to be associated with gambling. Such notification must include the person’s name and date of birth, and a summary of their gambling activity, if that information is available to the licensee.”

In its Consultation Response, the Gambling Commission provides some guidance on its expectations of a licensee’s ‘reasonable cause to suspect’, indicating that the word ‘reasonable’ was an “important qualification” and further stating:

“We do not expect gambling businesses to actively investigate various sources of information but to be cognisant of developments it might become aware of and respond accordingly.”

Whilst it remains somewhat ambiguous as to what may be considered ‘reasonable’ in these circumstances, the Gambling Commission explains that it introduced this wording to ensure licensees do not fail to report complex cases where they do not have ‘actual knowledge’ of a death by suicide. All licensees must therefore now ensure they notify the Gambling Commission as soon as reasonably practicable upon becoming aware, or having reasonable cause to suspect, that a customer has died by suicide and (where applicable) ensure they participate in GAMSTOP.

Many licensees will have already implemented these requirements into their policies, procedures and systems. However, for those that have yet to do so, you may find the following helpful:

GAMSTOP

The Gambling Commission published a blog on 18 December 2023, which provides information on how to integrate with the GAMSTOP application programming interface.

Helpfully, the blog links to a webinar delivered by the Gambling Commission and GAMSTOP, which provides:

a summary of GAMSTOP’s work completed to date – starts at 1 minute 40 seconds;
an overview of the GAMSTOP scheme – starts at 6 minutes 17 seconds;
guidance about the integration process – starts at 17 minutes 29 seconds; and
a question and answer session – starts at 32 minutes 06 seconds.

Reporting suicides

If licensees become aware, or have reasonable cause to suspect, that a customer has died by suicide, they should provide the following information to the Gambling Commission:

the date the licensee became aware of the death;
the person’s name;
date of birth; and
a summary of their gambling activity, if this information is available.

This information should be submitted to the Gambling Commission via eServices as soon as reasonably practicable. It is critical to remember that the Gambling Commission requires any deaths by suicide to be reported – it does not matter whether the suicide is known or suspected to be associated with gambling. As noted by the Gambling Commission in its Consultation Response:

“…we are not expecting gambling businesses to determine whether the person’s death was caused by or connected to their gambling activity. Responsibility for establishing whether a death is by suicide is a matter for a coroner or the police to determine.”

Additional details about information the Gambling Commission expects licensees to include in these notifications can be found in the Gambling Commission’s LCCP Information requirements guidance.

In terms of the timing of the notification, the Gambling Commission does not provide guidance on what is meant by “as soon as reasonably practicable”. However, licensees should note the relative urgency and would be well-advised to put in place robust systems and processes to ensure that any relevant facts/matters are reported to appropriate personnel within the business as soon as possible – ideally to those in the compliance department, including the personal management licence (“PML”) holder responsible for the licensee’s regulatory compliance function.

In addition, all employees (and particularly those that are customer-facing and/or who supervise this cohort) should be trained on the new reporting obligation as soon as possible, to mitigate the risk that relevant facts or matters are known within the wider business but not reported “up” through the appropriate channels.

We also recommend that licensees review their terms and conditions and privacy policies to make it clear that they are required to disclose information to the Gambling Commission in these circumstances.

Please get in touch with us if you: (i) would like us to review your policies and procedures to ensure they comply with the Gambling Commission’s requirements; (ii) require training for the PML holders in your business; and/or (iii) would like any other assistance in relation to licensing and compliance matters.

28Feb

White Paper Series: Parliamentary debate on affordability and financial risk checks

28th February 2024 Chris Biggs 114

On Monday 26 February 2024, the UK Parliament debated the petition Stop the implementation of betting affordability/financial risk checks (the “Petition”), formally addressing one of the Government’s (and the Gambling Commission’s) more controversial commitments from the White Paper.

Background

Launched on 1 November 2023 by The Jockey Club Chief Executive Officer, Nevin Truesdale, the Petition reached more than 100,000 online signatures within 27 days, prompting Parliament’s Petitions Committee to schedule yesterday’s debate by Members of Parliament (“MPs”) including the Gambling Minister, Stuart Andrew (the “Debate”).

The Petition states:

“We want the Government to abandon the planned implementation of affordability checks for some people who want to place a bet. We believe such checks – which could include assessing whether people are ‘at risk of harm’ based on their postcode or job title – are inappropriate and discriminatory.”

On 16 November 2023, the Government responded to the Petition, stating it is “committed to a proportionate, frictionless system of financial risk checks, to protect those at risk of harm without over regulating”, also indicating that the Gambling Commission would set out its plans “in due course”.

Last week (and in advance of the Debate), the Gambling Commission’s Executive Director of Research and Policy, Tim Miller, published a blog entitled “Financial risk next steps – February 2024”, which provided an update on the Gambling Commission’s intended implementation of financial risk checks. We discussed these proposals in our recent blog: White Paper Series: Gambling Commission update on its implementation of financial risk checks.

The Debate

The Debate was attended by a large number of MPs, 27 of whom shared views in favour of both sides of the argument. In opening the Debate, MP for Neath, Hon. Christina Rees, stated “affordability checks are not about attacking consumer rights or curbing individual liberties, but about upholding consumer protections and curbing operator excess.” Whilst Rees acknowledged the concerns of industry bodies, operators and the horseracing community, she argued that the idea of introducing financial risk checks is not new, and that industry and consumers alike support the need for regulation against harmful betting. In Rees’ view, the issue rather seemed to be that:

“such checks need to be frictionless, without negative impact on punters or operator revenue, and without pushing vulnerable gamblers into the black market.”

Similar concerns about the proposed financial risk checks were raised by other MPs. Broadly, the major concerns from the industry (particularly horseracing) and consumers, as put forward by various MPs, were:

it is unclear if the financial risk checks would truly be frictionless;
it is inappropriate for the Government and/or the Gambling Commission to determine what is affordable for an individual;
financial risk checks would push more consumers to the black market; and
horseracing should be distinguished from other forms of gambling, such games of chance, in the implementation of financial risk checks.

Several MPs called for the Government to reconsider the proposals and start again, arguing that a one-size-fits-all approach would not work, and that a wider group of industry stakeholders and experts must be consulted in order to find the appropriate balance.

MP for Shipley, Hon. Philip Davies, on the other hand, took a slightly more nuanced approach, stating that “however much I would like the Government and the Gambling Commission to abandon the affordability check policy, I have not been here so long without accepting that some battles are impossible to win”. Davies suggested that, if they are to be introduced, the proposed “enhanced” financial risk checks should be based on data from the Steering Committee on Reciprocity (“SCOR”), instead of current account turnover data. Davies argued that the use of SCOR data would, crucially, ensure that the checks are “entirely frictionless and do not discriminate against any group, such as the self-employed”.

Amongst the arguments in support of the introduction of financial risk checks, several MPs emphasised that the lower, “light-touch”, financial vulnerability checks will be frictionless and that the enhanced financial risk checks would only require 0.3% of online gambling account holders to provide gambling businesses with additional financial information – the 0.3% being a reference to Andrew Rhodes’ (Chief Executive Officer for the Gambling Commission) blog entitled “Your questions answered on the financial risk checks consultation”, which was published on the Gambling Commission’s website on 7 September 2023. In his blog, Rhodes argued that, on the basis that nearly all gambling customers have a credit reference file which can be checked frictionlessly, only a small percentage (estimated at 0.3% by the Gambling Commission – although it is unclear on the basis of what data/research) would be asked to directly provide additional financial information to an operator in connection with a financial risk assessment.

MP for Sheffield Central, Hon. Paul Blomfield, stated that gambling addiction is a health issue which needs to have a prevention strategy. Noting gambling-related harm can occur at relatively low levels of spend, Mr Blomfield also considered that the 0.3% of customers likely to be affected by the enhanced checks is a “tiny number” in relation to the benefit that could be achieved through introducing the checks. Blomfield went on to downplay the argument that financial risk checks would cause customers to move to the black market. Blomfield cited similar concerns that were raised by the tobacco and payday lending industries, which he noted did not come to fruition after these industries were more stringently regulated.

MP for Swansea East and Chair of the All-Party Parliamentary Group on gambling related harm, Hon. Carolyn Harris, suggested that the logical way forward in protecting those gripped by gambling addiction is to introduce the financial risk checks on anyone gambling larger sums:

“Those would not stop anyone who can afford it betting as much as they choose, but it would stop those who cannot.”

Harris cited research by Dr Philip Newall from the University of Bristol and Dr David Zendle from the University of York using open banking data, which found that “unharmed” gamblers have an average monthly spend of £16.41, compared with £208.91 for the highest risk group. Harris went on to conclude that this research suggested that “risk-free” gamblers would very rarely trigger any affordability checks at the thresholds proposed by the Gambling Commission, being £125 net loss within a month for the light-touch financial vulnerability checks.

Gambling Minister, Hon. Stuart Andrew was last to respond in the Debate and did not provide any significant new information or details about the financial risk checks. Andrew appeared to attribute responsibility to the industry for its “onerous, ad hoc and inconsistent“application of financial checks under the current regime and to cite this as a basis for the Gambling Commission introducing consistent and less intrusive checks. An alternative argument might be that it is the Gambling Commission’s overreaching in its compliance and enforcement activity, particularly in relation to its application of its guidance, that provides the foundation for the proposed financial risk checks.

Andrew briefly addressed the issues raised regarding the black market and the horseracing industry, but largely focused on reiterating the Government’s position that it is not its “job to tell people how to spend their money”. Rather, and as outlined in the White Paper, the Government wants to balance individual freedom with the “necessary action to tackle the devastating consequences that harmful gambling can have on individuals and communities”. Andrew also stated:

“I believe that the proposals for financial risk checks will represent a significant improvement for both businesses and customers, compared with the current situation.”

In addressing the implementation of the financial risk checks, Andrew largely restated the Gambling Commission’s position from its blog of 22 February 2024 (referred to above). However, he emphasised that the Gambling Commission is “carefully listening” to concerns, demonstrated by its confirmation that gambling businesses will not be required to consider an individual’s personal details, such as their postcode or job title, as part of the financial risk checks. We question whether it is the Gambling Commission “carefully listening”, or the public and political traction created by the Petition that led to the Gambling Commission issuing a premature update on its intentions immediately before the Debate, and in doing so backtracking on its original proposal to obtain personal information, such as occupation, from customers. Had the Gambling Commission not so issued its update, Andrew would have had little new information to put forward.

Andrew also emphasised that the Government is supportive of the Gambling Commission’s intention to pilot the implementation of the financial risk checks, and that he hopes it is clear that:

“both the Government and the Commission want this to be a genuine pilot of how data sharing would work”.

Summary

In summary, the Debate uncovered many more questions than answers, and it is still unclear how the Government and Gambling Commission intend to ensure that the financial vulnerability and financial risk checks will truly be frictionless. What is clear, however, is that the Government and the Gambling Commission are working closely together to roll out these checks.

In terms of next steps, Andrew confirmed that the Gambling Commission will publish its full consultation response “very soon”, which reflects the Gambling Commission’s promise in its February 2024 blog that the consultation response would be published in March 2024. We, along with many other industry stakeholders, will eagerly be awaiting the publication of this response, in the hope that it will: (1) clearly set out full details of its proposals with regard to financial vulnerability and financial risk checks (including in relation to the proposed pilot phase); and (2) propose novel and well considered solutions to address some of the (we consider, genuine) concerns raised by MPs in the Debate, and by the wider industry.

Frustratingly, and despite the high number of signatories to the Petition, it is unlikely that the Government and the Gambling Commission will depart from their path as articulated in the White Paper. The Gambling Commission, it seems, is determined to establish the requirement for financial risk checks, ensure that technological developments are implemented, and only then consider and determine what the “vast majority” of customers having a “frictionless” experience actually means. To continue the theme of horse-based analogies enjoyed by several MPs during the Debate, by then, the horse will have bolted.

Watch the full Debate in Parliament here:

Please get in touch with us if you have any questions about financial risk checks or if you would like assistance with any compliance or enforcement matters.

With thanks to David Whyte and Gemma Boore for their co-authorship.

29Nov

Understanding the impact of increased cost of living on gambling behaviour: Gambling Commission’s interim findings

29th November 2023 Chris Biggs 133

Last month, the Gambling Commission published its interim findings on the impact of increased cost of living on gambling behaviour. The Gambling Commission’s research aims to improve its understanding of the impact of increased cost of living by examining the behaviours and motivations of gamblers during the period of high cost of living in Great Britain (“COL Research”).

The Gambling Commission commenced the COL Research in December 2022 in partnership with Yonder Consulting, and undertook a “mixed-methodology research approach” with a longitudinal survey taking place over three waves between December 2022 and June 2023. This was followed by qualitative depth interviews to further understand the impact of the rise in cost of living on lifestyle and gambling behaviours.

In this blog, we summarise the COL Research, set out the Gambling Commission’s interim findings and identify key points for licensees in Great Britain to note.

What is the COL Research?

The Gambling Commission sets out its definition of ‘cost of living’, as:

“the amount of money that is needed to cover basic expenses such as housing, food, taxes, healthcare, and a certain standard of living.”

The COL Research specifically aims to test three core hypotheses:

The rise in cost of living is likely to impact consumers’ gambling behaviour in different ways, depending on their personal circumstances and the way in which gambling fits into their lives.
Some gamblers will report that the rise in cost of living has had a mediating effect on their gambling behaviour.
The rise in cost of living may negatively impact vulnerabilities for some consumers, putting them at an increased risk of gambling-related harm.

The project commenced with three waves of quantitative research, which sought to: (1) initially establish a baseline of key gambling behaviours; (2) explore the impact of external triggers for gambling; and (3) subsequently track any changes to the core gambling behaviours.

Wave 1

Between 21 and 22 December 2022 the Gambling Commission commenced the nationally representative survey of 2,065 adults aged 18 or over. 973 participants (47%) had engaged in gambling activity in the last four weeks.

Wave 2

Between 27 February and 3 March 2023, 1,694 of the same sample group were recontacted to capture changes in the core gambling behaviours surveyed. 820 participants (48%) had engaged in gambling activity in the last four weeks.

Wave 3

Between 26 May and 2 June 2023, 1,391 of the same sample group (who all took part in Wave 2) were recontacted to capture further changes in the core gambling behaviours. 666 participants (48%) had engaged in gambling activity in the last four weeks.

Qualitative wave

The qualitative phase took place in August 2023, with the aim to build a “more rounded impression and picture of each individual”. This phase engaged with 16 individuals who each completed a three-day “digital diary pre-task” to reflect on spending habits. 16 one-hour online interviews were then conducted with gamblers who engage in a variety of different gambling types and with different gambling behaviours (whilst it is not clear, we assume these were the same 16 individuals who participated in the digital diary pre-task).

The Gambling Commission’s interim report does not discuss findings from the qualitative phase; these will accompany further quantitative and longitudinal analyses in the final report expected in “early 2024”.

Key findings

The quantitative phase of the COL Research (i.e. the three waves) surveyed the participants across three broad topics. We set out the Gambling Commission’s key findings for each topic below.

Topic 1: Financial comfort and concerns, and wellbeing

Just under half of the respondents indicated they were “just about managing but felt confident that they would be okay” with the cost of living, whereas between 40% and 43% of individuals indicated they were “financially comfortable”.

The subgroups most likely to have broader concerns about their personal finances are those who gamble online and those who score 8 or more on the Problem Gambling Severity Index (“PGSI”), however most individuals signalled the need to take steps to make their income go further during the tracked period.

In terms of wellbeing, between 45% and 49% of respondents reported “not being able to enjoy the things that they used to due to the rising cost of living” throughout the tracked period.

Topic 2: Changes in gambling behaviours

Despite the rise in cost of living, a clear majority of gamblers reported that their gambling behaviours (amount of time and money spent, number of gambling occasions and typical stake placed) had remained stable, the majority ranging from 62% to 75% depending on the type of gambling behaviour.

If a change in gambling behaviour was reported, it was much more likely to be a decrease in gambling. For example, between 22% and 26% of individuals reported a decrease in the amount of time spent gambling, compared to 6% to 7% that reported an increase in time spent gambling.

69% of individuals who did report changes indicated that these changes were “at least partially a direct consequence” of increases in the cost of living.

Individuals who scored 8 or more on the PGSI were more likely to report an increase in the gambling behaviours surveyed, despite the rise in cost of living.

Topic 3: Motivations for gambling

Respondents who previously indicated they had changed their gambling behaviours were asked questions about four specific motivations in Waves 1 and 3, displayed in the Gambling Commission’s Table 4.1:

Between 10% and 20% of online gamblers indicated that bolstering their finances was their motivation for gambling, and this motivation applied to “significantly more” individuals who scored 8 or more on the PGSI.

Interim conclusions

The concluding remarks in the Gambling Commission’s report considered the interim findings in the context of the following two hypotheses:

Has the rise in cost of living had a mediating effect on gambling behaviour?

Initial quantitative evidence does not suggest that the rise in cost of living has had a mediating effect on gambling behaviours. However, the “small proportion” of those who did make changes to their gambling during this period were more likely to have deceased their gambling; the exception being individuals who scored 8 or higher on the PGSI, who were more likely to have increased their gambling compared to other groups of participants.

Has the rise in cost of living negatively impacted vulnerabilities for some consumers?

A small minority of gamblers who said that they have changed at least one of the surveyed gambling behaviours reported using gambling to support their finances in some way, with a greater proportion of those doing so being online gamblers and/or those who scored 8 or more on the PGSI. The individuals who did change their gambling behaviours indicated that the rise of cost of living has at least partially contributed to their change in behaviour.

Takeaway points

It can be inferred from the interim findings that online gamblers and individuals scoring 8 or higher on the PGSI may be more vulnerable to gambling-related harms when faced with a rise in cost of living.

Given that the interim findings come at a time when the spotlight is on affordability and customer interaction, it will be interesting to see whether the COL Research findings feature prominently in the Gambling Commission’s response to its summer consultation that closed on 18 October 2023 and included consideration of new obligations on licensees to conduct financial vulnerability checks and financial risk assessments.

For the meantime, online operators in particular, should bear these interim findings in mind while they are updating their safer gambling policies and procedures to reflect the Gambling Commission’s revised customer interaction guidance for remote gambling licensees; and evaluate whether they ought to take increased cost of living into account in their assessment of financial risk – pending formal direction from the Gambling Commission.

The Gambling Commission’s final report in “early 2024” will combine its interim findings with further quantitative analysis of the longitudinal impact of the increased cost of living across different demographic groups, and key findings from its qualitative phase of the COL Research.

Please get in contact with us if you have any questions about the Gambling Commission’s interim findings and/or your business’ approach to customer interaction and financial vulnerability.

28Nov

New Industry Code for Responsible Gambling (7th edition) comes into force this week

28th November 2023 Ting Fung 140

The seventh edition of the Industry Group for Responsible Gambling Code for Socially Responsible Advertising (the “IGRG Code”) was published by the Betting and Gaming Council on the 5 September 2023 and will come into force on 1 December 2023.

Pursuant to ordinary code provision 5.1.8, all licensees are required to follow the IGRG Code.

The IGRG Code has been strengthened following government’s indication in the White Paper to:

“take existing commitments in the industry code further, and use the full potential of available advertising technology to target all online advertising away from children and vulnerable people and those showing indicators of harm.”

What’s new?

The IGRG Code, which was last updated in October 2020, has been amended as follows:

Extension of the safer gambling messaging requirement to 20% of advertising space across online and broadcast media (previously, this commitment only applied to television and radio).
Extension of the 25+ rule to all digital media platforms, including those which operate age verification processes.

You can download a copy of the IGRG Code from the BGC’s website.

31Oct

Revised remote customer interaction guidance comes into effect

31st October 2023 David Whyte 152

The Gambling Commission’s revised remote customer interaction guidance (“CI Guidance”) has today (31 October 2023) come into effect, along with the requirement set out in Social Responsibility Code Provision (“SRCP”) 3.4.3 that remote licensees must take the CI Guidance into account.

As readers of our blog will no doubt be aware, we have provided several updates (for example, in December 2022 and January 2023) on, and been critical of, the evolution of the CI Guidance, since the first announcement by the Gambling Commission on 14 April 2022 of the new SRCP 3.4.3 and the associated CI Guidance.

The Gambling Commission has now set out its requirements. Irrespective of their views about the CI Guidance, it is vitally important that those remote licensees to which the CI Guidance applies are compliant with SRCP 3.4.3 and can demonstrate that they have taken the CI Guidance into account. We do not propose to further analyse the CI Guidance in detail in this blog. Rather, we set out below some key considerations for those licensees who must comply with these requirements.

Key considerations

Consideration 1: Be wary of the language used in the CI Guidance

We have previously raised concerns about the Gambling Commission introducing formal requirements through guidance, and about the risk that the language used in the CI Guidance might: (a) inaccurately reflect the requirements set out in SRCP 3.4.3; (b) cause confusion; and/or (c) expose licensees to the risk of broad interpretation by the Gambling Commission.

We note that the Gambling Commission has retained its use of “must” and “should” in the CI Guidance, having confirmed in its response to its consultation on the CI Guidance, published on 24 August 2023 (the “CI Consultation Response”) that it has “ensured that consistently appl ‘must’ language when quoting or referring to the requirements, and use ‘should’ language when referring to guidance which must be taken into account”. Licensees should take note of this distinction, but at the same time be aware that the requirement imposed by SRCP 3.4.3 to “take into account” the CI Guidance might effectively make such distinction irrelevant.

Consideration 2: Document your decision-making processes

As the Gambling Commission explains in the CI Guidance, SRCP 3.4.3 “sets out the requirements relevant licensees must comply with in relation to remote customer interaction. For compliance and enforcement purposes, will expect licensees to demonstrate how their policies, procedures and practices meet the required outcomes. This can be through implementing relevant parts of the guidance or demonstrating how and why implementing alternative solutions equally meet the outcomes”.

Licensees will likely be aware that the Gambling Commission has taken a very literal approach to the interpretation of its guidance in the past (e.g. its guidance for remote and non-remote casinos on the prevention of money laundering and combating the financing of terrorism). It is therefore likely that the Gambling Commission will take the same literal approach in relation to the CI Guidance. Licensees should ensure that they carefully document their decision-making process in relation to the CI Guidance, in particular in cases where their approach is inconsistent with, or diverges from, the CI Guidance. This documented decision-making process will enable licensees to demonstrate to the Gambling Commission that they have met their regulatory obligations in the event of future oversights and/or regulatory scrutiny.

Consideration 3: Licensees are not expected to screen all customers for every indicator of vulnerability

The Gambling Commission makes it clear in the CI Guidance that its “aim” for SRCP 3.4.3(3), which requires licensees to “consider the factors that might make a customer more vulnerable to experiencing gambling harms”, is to ensure that “where licensees know that customers are in a vulnerable situation, these customers are supported”. Licensees should note that the Gambling Commission also confirms that it does not expect licensees to screen all customers for each of the factors of vulnerability set out in the CI Guidance.. Rather, it expects that licensees “consider and act on information that they have available to them” (our emphasis added).

Consideration 4: Not all information included in the CI Guidance is required to be taken into account

The Gambling Commission clarified in the CI Consultation Response that certain information included in the CI Guidance is not required to be taken into account by licensees. Rather, that information has helpfully been included in an attempt to provide licensees with clarification or additional explanation to assist their understanding. Licensees should ensure that they are aware of this distinction, particularly when they are revising their policies and procedures and/or documenting their decision-making process.

A helpful example of this is the additional information – which is not required to be taken into account – set out below paragraph 5.3 of the CI Guidance. This lists further sub-categories of potential indicators of harm which, whilst not required indicators, may be of particular use to licensees when considering the formal indicators that they are required to incorporate into their approach to customer interaction by SRCP 3.4.3(5).

Consideration 5: No change to affordability requirements (yet!)

At present, the Gambling Commission’s position on customer affordability has not changed. Whilst the Government set out its proposed financial risk check model in the White Paper, upon which the Gambling Commission is consulting, the CI Guidance does not address those issues. Rather, it restates the current position at paragraph 4.6, reminding licensees that: (a) open source data that can assist them in assessing affordability exists; (b) thresholds should be realistic and based on average available income; and (c) they should be aware of the distinction between ‘disposable income’ and ‘discretionary income’.

Consideration 6: Manual reviews of automated decisions are only required if customers contest that decision

SRCP 3.4.3(11) requires that “icensees must ensure that strong indicators of harm, as defined within the licensee’s processes, are acted on in a timely manner by implementing automated processes”. It also requires that, where such automated processes are applied, “the licensee must manually review their operation in each individual customer’s case and allow the customer the opportunity to contest any automated decision which affects them”.

The Gambling Commission clarified its position in relation to this manual review in the CI Consultation Response and does so again in the CI Guidance, stating that its expectation is that “where a decision is made solely by automated means and which has legal effects or similarly significantly affects a customer the licensee contacts the relevant customer to inform them of the decision and their right to contest it”. It is only where the customer exercises their right to contest the decision that a substantive manual review must be undertaken.

Licensees should take steps to review their data protection processes and procedures to ensure that they are consistent with both data protection legislation and the Gambling Commission’s expectations as set out in the CI Guidance.

Consideration 7: Do not overlook evaluation

Licensees are likely to have gone to significant lengths to ensure their adherence to the burdensome requirements set out in the CI Guidance, with particular focus on indicators of vulnerability and harm. In doing so, there is a risk that they may have overlooked the importance of evaluation as required by SRCP 3.4.3 (12)-(14). Licensees should therefore ensure that their approach to customer interaction incorporates the mandatory evaluation processes both at the individual customer level and of the whole system, and that those evaluation processes are documented and audited.

Next steps

Please get in touch with us if you would like to discuss the CI Guidance, or if you would like assistance with drafting and/or updating your policies and procedures in light of the CI Guidance.

19Oct

Gambling Commission publishes response to consultation on changes to the LCCP

19th October 2023 Adam Russell 149

On 17 October 2023, the Gambling Commission published a response to their consultation which proposed changes to the Licence conditions and codes of practice (“LCCP”) in relation to: (1) the scope of the requirement for gambling operators to participate in GAMSTOP; (2) events explicitly listed by the Gambling Commission as “reportable” in the LCCP; and (3) the technical wording of an LCCP provision in relation to payment method services.

Background

The consultation opened on 28 February 2023 lasted 12 weeks, closing on 23 May 2023. As outlined in our blog in March 2023, the Gambling Commission proposed the following changes to the LCCP:

Change social responsibility code provision 3.5.5 – Remote multi operator self-exclusion to extend the requirement to participate in the GAMSTOP multi-operator scheme to all gambling licensees that make and accept bets by telephone and emails.
Add a requirement to licence condition 15.2.2 – Other reportable events that would require all gambling licensees to inform the Gambling Commission when they become aware that a person who has gambled with them has died by suicide.
Amend the text of licence condition 5.1.2 – Payment methods services to ensure that the condition reflects the current legislative provisions, plus a further amendment to ensure that the condition also reflects any further legislative amendments that might come into force in the future.

Consultation response

Having received 77 written responses to the consultation (including 29 from gambling businesses), the Gambling Commission have decided that they will implement each of the three proposed LCCP changes. The Gambling Commission’s rationale for the forthcoming changes, the timeline for implementation and the final wording of the provisions are outlined below.

1. Extend the multi-operator self-exclusion scheme to all gambling businesses that make and accept bets by email

The Gambling Commission’s decision to extend the requirement emanates from their “focus…on assessing the risk of harm (in particular for consumers who are vulnerable) as well as the benefits to consumers of clarity and uniformity of approach to self-exclusion…alongside the additional costs faced by gambling businesses.”

Specifically, they considered that the extension would yield the following benefits:

Consistency with the current approach applied to online gambling services;
Simplicity for consumers, gambling business, the Gambling Commission and GAMSTOP;
Providing the most comprehensive protection for vulnerable consumers.

The amended wording to social responsibility code provision 3.5.5, which is set to come into force on 1 April 2024, will read as follows:

1. Licensees must participate in the national multi-operator self-exclusion scheme.”

2. Reporting deaths by suicide to the Gambling Commission

The Gambling Commission considers that their decision to require gambling businesses to inform them upon becoming aware that a customer has died by suicide is “both reasonable and proportionate”. The Gambling Commission has clarified that they “are not expecting gambling businesses to determine whether the person’s death was caused by or connected to their gambling activity”, which is the responsibility “for a coroner or the police to determine”. Nonetheless, the Gambling Commission will “require notification as early as possible”.

The Gambling Commission cited further reasons for their decision, including in relation to data integrity, privacy and/or data protection issues and economic impact.

The added requirement to licence condition 15.2.2, which is set to come into force on 1 April 2024, will read as follows:

“Applies to: All operating licences.

3. Payment services – technical update

The Gambling Commission confirmed that the amendment “simply updates the existing licence condition to reflect the current legislative provisions and also ensures that the condition is suitably future proofed against any further simple legislative changes.”

The updated wording of licence condition 5.1.2, which is set to come into force on 31 January 2024, will read as follows:

“Applies to: All remote casino, bingo and betting operating licences, except ancillary, host and remote betting intermediary (trading room only) licences.

1. Licensees must only accept payment from customers using their gambling facilities in Great Britain by a method which involves the provision of payment services as defined in Schedule 1 Part 1 of the Payment Services Regulations 2017 (SI 2017 No 752) if the provider of those services is a ‘payment service provider’ within the definition of that term in regulation 2 of those Regulations (or the equivalent requirements of any UK Statutory Instrument by which those regulations are amended or superseded).”

The consultation asked an additional question regarding any potential equalities impacts that could arise from the proposals. There were very few responses to this question, and the Gambling Commission noted that the responses did not give rise to “themes or major areas of concern”.

Please get in touch with us if you would like assistance on any licensing matters.