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Responsible Gambling

Home / Responsible Gambling
17Feb

Socially responsible marketing: How to strike the right balance

17th February 2025 Gemma Boore Harris Hagan, Marketing, Responsible Gambling, Uncategorised 16

In Great Britain, companies in the gambling industry face unique challenges when it comes to marketing and advertising. Gambling operators and affiliates alike are expected to keep abreast of complex and diverse requirements set by the Gambling Commission, the Advertising Standards Authority, the Betting and Gaming Council, the Information Commissioner’s Office and the Competition and Markets Authority – to name just a key few – to ensure British brands are marketed in a compliant and socially responsible manner.

To assist our regular readers, we outline below some of the key changes to British rules and regulations that will either imminently, or have recently, impacted the way in which companies undertake gambling marketing – including some that can occasionally, be overlooked.

Why is compliant marketing so important?

For companies in the gambling industry, striking the right balance between promoting brand/s, complying with regulatory obligations and protecting customers is key. Not just for compliance reasons (although this is – of course – paramount): socially responsible marketing also enhances reputation, differentiates a company from its competitors in a crowded marketplace, and helps to build consumer trust. However, achieving such a delicate balance is no mean feat because the ecosystem in which gambling companies operate is rapidly evolving.

How do you keep abreast of changing requirements? If you undertake marketing for a gambling brand that holds an operating licence issued by the Gambling Commission, it is a good idea to sign up for regulatory newsletters, including those published by the following organisations:

  • The Gambling Commission’s eBulletin, which includes information about consultations, recent regulatory enforcement action, changing requirements and other compliance matters:  https://www.gamblingcommission.gov.uk/e-bulletin
  • The Advertising Standards Authority (“ASA”)’s newsletters – five are available but in our opinion, the most useful are the ASA rulings (which are weekly ASA adjudication alerts), the insight newsletter (which provides advice on advertising compliance) and the update newsletter (which includes details of public consultations): https://www.asa.org.uk/newsletter.html
  • The Betting and Gaming Council (“BGC”)’s newsletter, which includes news from the betting and gaming industry body, including in relation to the codes of conduct that apply to its members: https://bettingandgamingcouncil.com/ (click “BGC News signup” at the top of the page)
  • The Information Commissioner’s Office (“ICO”)’s E-newsletter (which provides updates on the latest developments in data protection laws) and Action We have Taken eNewsletter (which includes news on the action the ICO has taken against nuisance marketers, the trends they are seeing, and areas that will be investigated in the future): https://ico.org.uk/about-the-ico/media-centre/e-newsletter/

By subscribing to the above newsletters and other third party sources, such as this blog and gambling industry news articles, you will be amongst the first to be informed of regulatory changes that could impact the way that you undertake future marketing. Key changes are often also publicly consulted upon before they take effect. By signing up to regulatory newsletters and learning about future consultations, you may also have the opportunity to voice your opinion and shape future rules and regulations, before they come into effect.

If you are an affiliate, it is also important to remember that the brands you are marketing may have their own bespoke requirements. If so, these will typically be set out in your contract, or in a brand guidelines document that will be updated by the operator from time to time. Although there will of course, be many similarities between different operators’ requirements, each one will have its own approach and risk rationale when it comes to advertising – so it is important to check your contract, or get in touch with your affiliate manager if you want to find out more.

What changes are on the horizon?

We set out below some of the key changes that will impact gambling advertising and marketing in Great Britain in the near future.

  • 1 May 2025: Changes to direct marketing preferences

The Gambling Commission’s requirements regarding gambling marketing and advertising are set out in Part 5 of the Code of Practice provisions in the Licence Conditions and Codes of Practice.

From 1 May 2025, a new Social Responsibility Code Provision (“SRCP”) 5.1.12 will come into effect, which will read as follows:

    1. “Licensees must provide customers with options to opt-in to direct marketing on a per product and per channel basis. The options must cover all products and channels provided by the licensee and be set to opt-out by default. These options must be offered as part of the registration process and be updateable should customers change their preference. This requirement applies to all new and existing customers.
    2. Channel options must include phone call, email and text messages (SMS) as applicable.
    3. Product options must include betting, casino, bingo, as applicable. Operators must make clear to customers which products they offer are covered under relevant categories.
    4. Where an operator seeks an additional step for customers to confirm their chosen marketing preferences, the structure and wording of that step must be presented in a manner which only asks for confirmation to progress those choices with one click to proceed. There must be no encouragement or option to change selection; only the option to accept or decline their selection.
    5. Customers must not receive direct marketing that contravenes their channel or product preferences.
    6. Existing customers who have not already opted out of marketing must be asked at their first log-in after commencement of this provision to confirm their marketing preferences if they have not done so already. Existing preferences can be copied over providing they match the format of this requirement.”

In essence, SRCP 5.1.12 is being introduced to ensure that from 1 May 2025, remote B2C gambling operators give their customers more granular options regarding direct marketing preferences.

While this change will certainly empower customers with greater control over the types of marketing they receive, the changes are controversial as they will essentially prevent operators from the relying upon the ‘soft opt in’ under the Privacy and Electronic Communications (EC Directive) Regulations 2003 (“PECR”): a commonly accepted exception to the general prohibition on sending unsolicited direct marketing to consumers, that permits businesses to market similar products and services to existing customers unless they have expressly opted out. The net effect being that, from 1 May 2025, gambling will stand alone in being the only industry that does not benefit from this business-friendly exception and many operators and affiliates will need to obtain fresh consent from, in some cases, the majority of customers to whom they are currently lawfully marketing.

We strongly recommend that operators and affiliates prepare for this seismic shift by:

(a)   reviewing marketing lists now to identify the customers to whom they will no longer be able to send marketing from 1 May 2025. For example, because they are marketing to those customers in reliance upon the soft opt in under PECR or because the express consent they previous obtained was not sufficiently granular;
(b)   seeking to obtain fresh consent from these individuals, that is compliant with the new requirements, as soon as possible; and
(c)   ensuring their systems and processes for preventing marketing being sent to customers that do not grant express consent are robust and do not cause them to breach SRCP 5.1.12 once it comes into force.

For further discussion on the proposed changes please see our blog: White Paper Series: Direct marketing and cross-selling in the crossfire.

  • TBC: Changes following the Gambling Commission’s Autumn Consultation

As at the time of writing, the Gambling Commission’s response to its proposals regarding socially responsible incentives in its Autumn Consultation is still pending. This is despite the fact that the response to the other proposals in that consultation was published on 4 February 2025 (for more information, please see our blog: White Paper Series: New rules on customer led tools, customer funds and statutory levy), which confirmed:

“We aim to publish our response on Socially responsible incentives by the end of March.”

While future changes regarding socially responsible incentives are not yet set in stone, we anticipate that significant changes will come to pass. Licensees should anticipate:

  • new rules restricting (or evening banning) wagering requirements on free bets and bonuses; and
  • a ban on the mixing of product types within incentives. For example: giving free spins to sports bettors; or free bets to bingo players.

Although the devil will of course, be in the detail – the biggest (and smartest) players are already taking steps to prepare. For example, by permitting internal marketing and compliance experts opportunities to examine current marketing techniques together; identify any practices that may not comply with the Gambling Commission’s future rules; take external advice, where appropriate; and brainstorm novel techniques that may have more longevity in terms of helping the business to acquire new customers, increase their engagement with products (in a socially responsible way), and prevent customer attrition (otherwise known as ‘churn’) in the future.

Which marketing obligations can sometimes be overlooked?

As well as scanning the regulatory horizon for future change, marketing teams should ensure they are alive to recent reforms to direct marketing and advertising rules that, in our experience, can occasionally be overlooked.

  • Social Responsibility Code Provision (“SRCP”) 3.4.3: Remote Customer Interaction

Although most remote licensee are acutely aware of SRCP 3.4.3 and the GBGC’s associated customer interaction guidance for the remote sector (the “Guidance”), the obligation for remote licensees to stop sending marketing to customers that are displaying strong indicators as harm (as defined by their systems and processes, having taken the Guidance into account) is one that can still in our experience, be overlooked.

The requirement in question means that remote operators must ensure that when their customers are, in their view, displaying strong indicators of harm, they must promptly cease sending the customer direct marketing communications. In other words, licensees must ensure that:

(i)   they have systems in process in place to identify indicators of harm;
(ii)   assess when those indicators of harm are strong – either on their own or when taken together; and
(iii)   there are adequate and effective communication channels between a licensee’s responsible gambling and marketing teams, such that marketing is stopped at the appropriate juncture.

  • Licence Condition (“LC”) 7.1: General Fair and Open Obligations and Related Obligations

Existing regulations like LC 7.1..1 (fair and transparent terms and practices), Ordinary Code Provision (“OCP”) 5.1.1 (rewards and bonuses – SR code), and 5.1.2 (proportionate rewards) of the LCCP stress the need for fairness and transparency in marketing offers.

This means that companies must ensure that significant terms are clearly presented in advertisements; full terms and conditions are easily accessible; and do not contain any unfair provisions. In our experience, this is an area of focus for the Gambling Commission during a compliance assessment, which may therefore expose licensees to enforcement action. We therefore suggest that licensees proactively review their general and offer-specific terms and conditions against the LCCP requirements.

  • CAP/BCAP Codes and the BGC’s Gambling Industry Code for Socially Responsible Advertising (the “Industry Code”)

The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the “CAP Code”), for those undertaking television marketing, the UK Code of Broadcast Advertising (the “BCAP Code”), and the BGC’s Gambling Advertising Code, are essential reading for marketing teams. These codes outline how and when to target marketing efforts and are entrenched in the LCCP under OCP 7.1.1 (compliance with advertising codes), which states:

    1. All marketing of gambling products and services must be undertaken in a socially responsible manner.
    2. In particular, Licensees must comply with the advertising codes of practice issued by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) as applicable. For media not explicitly covered, licensees should have regard to the principles included in these codes of practice as if they were explicitly covered.

Common pitfalls, such as inadequate age-gating on third party platforms; use of brand ambassadors that strongly appeal to under 18s and/or not including significant terms and conditions on a promotion, can lead to regulatory action and reputational harm.

  • SRCP 1.1.2: Responsibility for Third Parties

Although we are confident that most licensees are acutely aware of SRCP 1.1.2 (responsibility for third parties – all licences), which states as follows; in our experience it is one of the requirements of the LCCP that is commonly breached. Sometimes by a third party that is carrying out a regulated activity on behalf of a licensed operator, but also sometimes by the licensee themselves – in cases where they have entered into an agreement that does that not require the third party to conduct themselves as if they were themselves bound by the LCCP and/or that cannot be terminated in accordance with SRCP 1.1.2.

  1. Licensees are responsible for the actions of third parties with whom they contract for the provision of any aspect of the licensee’s business related to the licensed activities.
  2. Licensees must ensure that the terms on which they contract with such third parties:

a.   require the third party to conduct themselves in so far as they carry out activities on behalf of the licensee as if they were bound by the same licence conditions and subject to the same codes of practice as the licensee

b.   oblige the third party to provide such information to the licensee as they may reasonably require in order to enable the licensee to comply with their information reporting and other obligations to the Commission

c.   enable the licensee, subject to compliance with any dispute resolution provisions of such contract, to terminate the third party’s contract promptly if, in the licensee’s reasonable opinion, the third party is in breach of contract (including in particular terms included pursuant to this code provision) or has otherwise acted in a manner which is inconsistent with the licensing objectives, including for affiliates where they have breached a relevant advertising code of practice.

In addition to ensuring that commercial agreements are compliant with the above provision, we also recommend that licensees conduct and refresh due diligence, including PEP (politically exposed person) and sanction checks, on affiliates and other partners.

Establishing detailed brand guidelines, requiring approval for new marketing copy, and conducting regular audits can also help to mitigate the risk of vicarious non-compliance, which could threaten a brand’s integrity.

Our top tips for compliance

While a changing regulatory environment can present challenges, there are strategies that you can put in place to assist your business to stay compliant:

  • Communication: Fostering strong communication channels between marketing and compliance teams is essential. In larger organisations, it is equally important for brands to collaborate effectively, ensuring that all marketing strategies align with compliance standards across the wider business.
  • Induction and Refresher Training: Arrange comprehensive induction and refresher training sessions for marketing teams, particularly when regulatory changes are imminent. Harris Hagan can provide tailored training, along with the creation and updating of internal checklists and guides to ensure that staff are well-informed about current and forthcoming requirements.
  • A/B Test New Methods: Consider A/B testing new consent and marketing methods in anticipation of forthcoming changes to marketing preferences and socially responsible incentives. This proactive approach can help identify effective strategies that comply with upcoming regulations.
  • Involve Compliance Teams: When devising new campaigns or marketing new products, involve compliance teams early in the process. Having legal experts review marketing copy, especially for innovative or unconventional products, is critical. Keeping thorough records of these reviews can provide additional protection.
  • Implement Technical Solutions: Ensure that robust technical systems are in place to suppress marketing communications where appropriate, such as in cases of strong indicators of harm have been identified, a customer has self-excluded, or when consent is withdrawn. Regularly test systems to ensure there is no ‘single point of failure’ in marketing controls. This will, in in turn support you to demonstrate that ‘reasonable steps’ have been taken, if there is any subsequent oversight.
  • Distinguish Between Marketing and Service Communications: It’s important to understand the distinction between marketing communications and service communications. These two types of communication should not be mixed to avoid confusing customers and to maintain regulatory compliance.
  • Contingency Plans: If a marketing mistake occurs, having policies and procedures in place to limit potential damage is essential. Companies should notify regulators as required and take steps to protect their brand reputation. After addressing the incident, take the time to analyse what went wrong and implement measures to reduce the risk of recurrence.

Conclusion

Striking the right balance between promoting your brand and protecting customers in the gambling industry is not just a matter of compliance; it’s a smart business strategy.

By: (1) embracing socially responsible marketing practices; and (2) taking proactive steps now, gambling companies can ensure their marketing efforts align with both their brand values and the welfare of their customers, creating a win-win scenario for all stakeholders involved.

Please get in touch with us if you have any questions about direct marketing, are interested in receiving our handy gambling advertising guide in Great Britain, would like assistance reviewing your terms and conditions and/or ads for compliance with British gambling regulatory requirements, or are looking to arrange training for marketing staff, compliance teams and/or PML holders in your gambling business.

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05Feb

White Paper Series: New rules on customer led tools, customer funds and statutory levy

5th February 2025 Harris Hagan Harris Hagan, Responsible Gambling, Uncategorised, White Paper 57

On 4 February 2025, the Gambling Commission announced changes aimed at increasing consumer control over deposit limits and greater transparency of customer funds protection by operators. Also, a further change to the Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) will also pave the way for implementation of the Government’s upcoming statutory levy. These changes are part of the consultation response to the Autumn 2023 Consultation and are consistent with the commitments within the White Paper.

What are the changes?

  1.      New customer led tools 

The new rules will give consumers more effective ways to manage their gambling by making it easier to set and maintain deposit limits on their online accounts, in ways that work best for them. These rules will take good practice already offered by some operators and expand that so customers can expect the same standards across the industry.

From 31 October 2025, all gambling operators must prompt their customers to set a financial limit before they make their first deposit and make it easy to review and alter this limit at any point after.

Gambling operators will also be required to remind customers every six months to review their account and transaction information. The Gambling Commission believes this will help customers consider if they want to change existing, or set new, deposit limits.

The announcement confirms that the Gambling Commission’s work revealed recent changes by some operators on how deposit limits are offered, which could cause confusion for consumers. As a result, a short supplementary consultation will be launched on proposals to improve consistency and transparency for consumers on how financial limits work.

2.    Transparency of protection of customer funds

Operators who hold customer funds must already set out in the terms and conditions whether these are protected in the event of insolvency, the level of such protection and the method by which this is achieved. They must also make this information available at the point at which a customer first deposits money.

The level of protection must be described as either ‘not protected – no segregation’, ‘not protected – segregation of customer funds’, ‘medium protection’ or ‘high protection’.

From 31 October 2025, operators whose customer funds are ‘not protected’ in the event of insolvency must actively remind customers once every six months that their funds are not protected.

Whilst there is no legal duty on gambling operators to protect customers funds in the event of insolvency, many of them do so voluntarily. The Gambling Commission believes the changes will help consumers understand which operators protect their funds and which do not – information which will support them in making choices about who they gamble with.

3.     Changes connected with the new statutory levy

The LCCP currently requires operators to make annual financial contributions to a list of research, prevention and treatment organisations.

This requirement will be removed close to the introduction of the Government’s statutory levy (expected to come into force on 6 April 2025) as it will become obsolete. The Gambling Commission will notify licensees of the date of implementation as soon as the Parliamentary process is complete.

Tim Miller, Commission Executive Director for research and policy, said:

“These changes illustrate our commitment to ensuring gambling is fair and open by improving consumer empowerment and choice.

“These changes will help consumers decide on deposit limits, enable them to keep track of their spending and ensure they are fully aware of what happens to their funds should an operator become insolvent.

“We will now continue our work to deliver our remaining White Paper commitments, including our programme of evaluation.”

Next steps

The new statutory levy requirement is expected to come into force on 6 April 2025. Changes on customer led tools and the protection of customer funds will come into force on 31 October 2025.

Please get in touch with us if you have any questions about these upcoming changes.

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04Feb

White Paper Series: Gambling Commission launches January 2025 consultation

4th February 2025 Harris Hagan Harris Hagan, Responsible Gambling, Uncategorised, White Paper 61

On 29 January 2025, the Gambling Commission launched its January 2025 consultation (the “January 2025 Consultation”). It is the Gambling Commission’s third consultation addressing its commitments within the White Paper, following the Summer 2024 consultation and Autumn 2023 consultation.

What does the January 2025 Consultation propose?

The January 2025 Consultation sets out proposed changes to the Gaming Machine Technical Standards (“GMTS”), the Gaming Machine Testing Strategy (“Testing Strategy”), and the Licence Conditions and Codes of Practice (“LCCP”), several of which were foreshadowed in the Gambling Commission’s Advice to Government in April 2023.

These include:

  • introducing five new standards, a licence condition and a social responsibility code provision designed to support and empower consumers to use gaming machines safely at every stage of the customer journey – this includes proposals on time and monetary limit setting functionality and information provision, such as safer gambling messaging and the display of net position and session time;
  • amending three existing standards having considered industry proposals to improve customer enjoyment and gameplay;
  • consolidating the existing 12 gaming machine technical standards into a single standard, whilst amending the format to be more consistent with the Remote gambling and software technical standards for greater clarity; and
  • updating the gaming machine technical standards and the related testing strategy to remove obsolete material.

1.     Consolidation of the GMTS

The Gambling Commission proposes to consolidate the 12 existing GMTS into a single standard and amend the format to be more consistent with the Remote gambling and software technical standards. The proposed consolidated version of the GMTS will be structured into 8 main standards and apply to all the main categories of gaming machines, with a further 6 standards for specific technical requirements. Although the text is proposed to be re-structured, these are essentially unchanged from the existing GMTS and cover areas such as legacy gaming machines, wireless network requirements and linked progressive requirements.

Given the now identical maximum charges for use (and maximum payouts) on Category B2 and B3 gaming machines is £2 per game (reduced from £100 per game in 2019), the Gambling Commission propose amending the GMTS for Category B2 gaming machines. Proposals are in relation to the game speed of play, that each game cycle must last at least 2.5 seconds (GMTS 5.7), and use of compensators and/or regulators, now permissible subject to compliance with the requirements and implementation guidance (GMTS 5.8).

2. Amendments to the GMTS

The proposals include amendments to the existing GMTS following the Gambling Commission’s consideration of industry proposals to improve consumer enjoyment and gameplay. These include:

  1. changes to game links (meaning an element, feature or outcome from one game is either held over or made reference to (recreated) in the next game (for example, reel band holds)) by (i) adjusting the value and the number of repeats permissible on Category C gaming machines (GMTS 5.14b) and (ii) removing the need for a 50/50 chance following a losing game on Category B gaming machines (GMTS 5.14a); and
  2. changes to live jackpots by allowing a player to gamble a live jackpot win on all categories of gaming machine (GMTS 5.9) – allowing live jackpots to be gambled, in the same manner that other prizes can be. This would not require consumers to gamble but rather choose to gamble or collect the live jackpot win in full at their own discretion.

It is noted in the January 2025 Consultation that several other proposals were discounted for a variety of reasons. These reasons included, for example, risk to the licensing objectives and the need for primary legislation which sits outside of the Gambling Commission’s remit.

3. New technical standards of the GMTS

The Gambling Commission seeks to support and empower consumers to use gaming machines safely at every stage of the customer journey.

Notably, the January 2025 Consultation proposes to introduce five new technical standards of the GMTS. These new standards focus on:

  1. time and monetary limit setting (GMTS 15.1) including:
    • requiring operators to ensure machines offer a default option of no more than a 20-minute session and £150 in deposits;
    • requiring customers to set their own limits, but these must not be more than 60 minutes or £450 deposited – setting no limits will not be an option; and
    • requiring players to take a mandatory break in play of at least 30 seconds when they hit their assigned limits; in addition, an alert will be sent to staff in the venue to inform them that a gambler has reached their pre-set threshold;
  2. safe gambling messaging during breaks in play when a customer set limit or default limit is reached or modified prior to being reached. The provision of information other than safer gambling messaging – such as a marketing of games or new promotional offers – in this scenario, will be prohibited (GMTS 15.2);
  3. display of net position and elapsed time (GMTS 15.3);
  4. awards less than or equal to the last total stake gambled must not be celebrated (GMTS 15.4); and
  5. prohibiting features that permit a customer to reduce the time until the result is known (GMTS 15.5).

Regular readers will note the similarities between some of the new technical standards and the changes to the remote games design requirements that came into force on 17 January 2025. For further information, please see our blog: Reminder: Changes to remote games design requirements come into force on 17 January 2025.

A copy of the proposed new GMTS is available here.

    f.  Update to a social responsibility code provision of the LCCP

    It is also proposed that a social responsibility code provision (SRCP 3.3.3) of the LCCP should be amended to require licensees to ensure that any gaming machines comply with GMTS 15.1 in relation to time and monetary limit setting, and ensure that staff alerts for limit setting are acted upon appropriately and in a timely manner.

    g. Update to the Testing Strategy

    The Gambling Commission wants to update the Testing Strategy to remove obsolete material in the strategy. Proposals include removal of the initial transitional arrangements and implementation dates.

    In addition, the Gambling Commission proposes to align the testing requirements for Category B2 gaming machines with those applicable to Category B3 gaming machines, due to the identical maximum charges for use (and maximum payouts) on Category B2 and B3 gaming machines.

    A copy of the proposed new Testing Strategy is available here.

    h.  New licence condition of the LCCP

    The January 2025 Consultation proposes to introduce a new licence condition of the LCCP, under the powers conferred by section 86(2) of the Gambling Act 2005, which will allow the Gambling Commission to effectively address instances whereby a gaming machine has been illegally manufactured, supplied, installed, adapted, maintained or repaired, or does not comply with the GMTS. Making a specified machine available for use after the Gambling Commission has notified the licensee in writing that the manufacture, supply, installation, adaption, maintenance or repair of the machine will now be a breach of a licence condition if it (a) was not carried out in reliance on a gaming machine technical operating licence, or (b) did not comply with the Commission’s gaming machine technical standards, which could give rise to enforcement action by the Gambling Commission .

    Will this be the last White Paper consultation by the Gambling Commission?

    While this is the Gambling Commission’s third consultation implementing proposals in the White Paper, it is unlikely to be the last. A further Gambling Commission consultation for the land-based sector may be required in due course if the Government decides to remove the prohibition on the direct use of debit cards on gaming machines. The Gambling Commission is also considering undertaking a further consultation to consider the effects of legislative change following the Gambling Act Review.

    Next steps

    The January 2025 Consultation will be open for 16 weeks, closing on 20 May 2025. Responses can be submitted online, or by post to the Gambling Commission’s Policy Team.

    We strongly encourage all licensees and stakeholders to review and respond to the January 2025 Consultation. Please get in touch with us if you would like to discuss this matter further or require our assistance preparing responses.

     

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    29Jan

    Unlicensed gambling – Part 3: The warning, the webinar and the method(ology) to the madness 

    29th January 2025 Gemma Boore Harris Hagan, Responsible Gambling, Uncategorised 68

    In this Part 3 of our recent blogs on unlicensed gambling, we discuss recent statements made by the Gambling Commission regarding the steps that it is taking to identify, quantify and disrupt illegal online gambling in Great Britain (“GB”). 

    If you would like to read more on this subject please see: Unlicensed gambling – Part 1: Growing threat or exaggerated myth? and Unlicensed gambling – Part 2: Is the Gambling Commission winning the “whack-a-mole” game? 

    The Warning 

    On 20 January 2025, the Gambling Commission posted a warning notice to the gambling industry on its website in which it explained it had become aware of casino games supplied by licensed operators appearing on unlicensed websites available to GB consumers illegally, and called on its B2B licensees to help it to tackle the illegal, unlicensed market. 

    The Gambling Commission noted that in some instances, third party resellers (who are also commonly known in the industry as aggregators) are distributing games supplied by its licensees to the illegal market, often in breach of contractual obligations. In the Gambling Commission’s view, licensees may have been negligent in permitting this and warned that that this practice might place a Gambling Commission issued operating licence at risk. 

    To mitigate this regulatory risk, the Gambling Commission advised its B2B licensees: 

    • to actively monitor their business relationships to ensure their partners are not participating in offering illegal gambling facilities to the GB market; 
    • to terminate relationships where non-compliance has occurred; and 
    • to actively engage with the Gambling Commission where such activities are identified, setting out the preventative measures adopted to ensure such activity ceases immediately, making clear that: 

    “Actively notifying the Commission and setting out a clear plan to mitigate the issue at pace is a minimum requirement.”  

    The Webinar 

    The previous week, Harris Hagan’s Managing Partner, John Hagan hosted the International Association of Gaming Advisors (IAGA) Best Practices Webinar on 15 January 2025, titled “Setting the UK Gambling Agenda for 2025: a less political year?”. During the webinar, Andrew Rhodes (Chief Executive of the Gambling Commission) and Grainne Hurst (Chief Executive of the Betting & Gaming Council (“BGC”)) shared their thoughts on various topics, including unlicensed gambling.  

    Rhodes confirmed that the Gambling Commission has invested in disrupting the illegal, online gambling market during recent years, with some success. However:  

    “Everyone should accept there has always been an illegal market present and much as different people want to debate the size and value of it, the reality is we need to understand the flow into it and why that happens, as well as preventing its ability to operate at scale.” 

    Rhodes emphasised that “legitimate” licensees are expected to undertake their own due-diligence on their suppliers and partners to ensure they are not engaged in unlicensed activity facing into GB – expressing concern at why anyone in the licensed industry would want to be in business with a company that is supporting illegal competition.  

    Rhodes went on to confirm that in 2025, the Gambling Commission will continue to use new capabilities around covert test purchasing and other investigative tools to identify those who are assisting illegal operators, as well as targeting those illegal operators directly – concluding by making clear that where the Gambling Commission feels it is necessary to suspend or revoke the licence of any operator or supplier, they will do. 

    Meanwhile, Hurst confirmed that disrupting the unlicensed market is a top priority for the BGC, alongside delivering the outstanding elements of the White Paper and making sure that a sensible tax harmonisation is put in place when the new regime is announced later this year. While they are still in the process of formalising next steps, action is being taken following the Gambling Commission’s challenge to the industry last year, and B2B BGC members will soon be required to commit not to provide content to unlicensed operators serving the GB market.   

    The Method(ology) to the Madness 

    The recent flurry of warnings by the Gambling Commission regarding unlicensed gambling follow its release last year of a statistics and research paper, Unlicensed gambling – Using data to identify unlicensed operators and estimate the scale of this market – October 2024 (the “Methodology Paper”). The Methodology Paper was a first step for the Gambling Commission in sharing its work in developing its capacity to identify unlicensed operators in GB, in which it explains how it is using an evidence-led approach to disrupt unlicensed gambling. 

    Focus  

    Although the Gambling Commission acknowledges in the Methodology Paper that unlicensed gambling can also take place in land-based premises, the paper is focused on the online market ‘where data has the greatest potential to help us make an impact’.  The Gambling Commission explains in the Methodology Paper that it has undertaken several stages of work to formulate its approach which include: 

    1. Understanding the motivations for consumers to enter the online unlicensed market, and the channels through which they do so 

    The Gambling Commission is focusing on specific areas of consumer motivation: people who have experienced gambling harms – especially those who are self-excluded; and consumers looking to avoid identity verification.  

    1. Identifying unlicensed operators and estimating the scale of usage by GB customers 

    Web traffic data and gambling behaviour data will be used to estimate the gross gambling yield (“GGY”) of the online unlicensed market, although the Gambling Commission concedes that making an accurate estimate will be challenging, as much activity is deliberately obscured by virtual private networks (“VPNs”).   

    Methodology  

    The Gambling Commission will use the following methods to identify and measure the scale of the online unlicensed market:  

    1. Google search results to list of search terms 

    Results to search terms will be monitored on a monthly basis. The search terms will be devised from a combination of industry engagement and consumer research, advice from the Gambling Commission’s intelligence and enforcement teams, and additional desktop research on to identify terms used on affiliate pages such as “not on GAMSTOP” that are used to target particular groups of consumers.  

    1. Identify affiliate pages or articles listing unlicensed sites 

    The Gambling Commission will identify affiliate sites and/or articles that recommend gambling websites targeting specific consumer groups, for instance, “best UK casinos not on GAMSTOP”, by checking for key words on web pages and identifying the presence of outgoing affiliate links. 

    1. Extract links to unlicensed gambling sites and obtain web traffic data 

    Unlicensed sites that are linked from affiliate pages and/or articles will be reviewed to determine whether they are blocked to GB customers. Under the current methodology, the Gambling Commission is able to flag sites that are blocked immediately upon opening but not sites that are blocked upon account registration. Web traffic and average visit duration data is obtained for each of the unlicensed sites using Similarweb, which is a digital intelligence platform that allows access to estimated web traffic data. 

    1. Combine web traffic data with research data to estimate spend on the identified sites 

    To estimate the GGY associated with identified sites, web traffic data will be combined with an estimate of average consumer spending behaviour, the latter of which will be based on data from the Gambling Commission’s Patterns of Play research.  

    The intended output of the above work will be twofold: (a) a dashboard of unlicensed operators ranked according to current usage by GB consumers, which can be used by enforcement teams to prioritise and target disruption activity; and (b) to allow the Gambling Commission to estimate the likely scale of the unlicensed market for GB consumers. 

    Limitations  

    The Gambling Commission acknowledges within the Methodology Paper, that its methodology cannot capture the whole online unlicensed market. For instance, GB traffic from consumers using a VPN.  

    Other assumptions and limitations include:  

    • The assumption that gambling behaviour on unlicensed sites is the same as on licensed sites; 
    • GGY estimates are based on online slots play only, as it is assumed that a significant proportion of unlicensed gambling activity is slots; 
    • Unlicensed sites are included in the GGY estimate regardless of the average visit duration, including very short average visit durations which could indicate visits where no money is spent or very long durations which could indicate periods of inactivity; and  
    • Not all consumer motivations are currently included in the core search terms.  

    Next steps 

    The Gambling Commission has called on the industry to report suspicious activity to the Gambling Commission’s intelligence team at [email protected] or, alternatively, through the following confidential portal: Tell us something in confidence. 

    Please get in touch with us if you have any questions regarding unlicensed gambling in GB, your due diligence obligations and how to actively monitor your business relationships, or if you would like assistance reporting a suspicion to, or responding to an information request from, the Gambling Commission.  

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    13Jan

    Reminder: Changes to remote games design requirements come into force on 17 January 2025

    13th January 2025 Tiffany Babayemi Responsible Gambling 68

    The Gambling Commission has reminded licensees that on 17 January 2025, the revised remote gambling and software technical standards (“RTS”) will take effect, introducing new requirements to extend the rules that already apply to slots, to other online products. Licensees should ensure their online games are compliant with the new requirements of the RTS before 17 January 2025.

    Background

    In May 2024, the Gambling Commission published its response to its Summer 2023 consultation in which it confirmed that it would proceed with the Game Design proposals as set out in the consultation. The changes to the RTS include the introduction of a minimum speed of play, features which reduce thinking time or contribute to dissociation from the act of gambling, and display of the amount of time and spend.

    Summary of the proposals and the new requirements

    Proposal 1: Player-led ‘spin stop’ features

    RTS requirement 14E: The gambling system must not permit a customer to reduce the time until the result is presented.

    RTS implementation guidance 14E:

    1. Features such as turbo, quick spin and slam stop are not permitted. This is not intended to be an exhaustive list but to illustrate the types of features the requirement is referring to.
    2. This applies to all remote games, regardless of game cycle speed.
    3. This requirement does not apply to bonus and/or feature games where an additional stake is not wagered.

    Applies to: all casino.

    Proposal 2: Minimum speed of play

    RTS requirement 14G: It must be a minimum of 5 seconds from the time a game is started until the next game cycle can be commenced. It must always be necessary to release and then depress the ‘start button’ or take equivalent action to commence a game cycle.

    RTS implementation guidance 14G:

    1. A game cycle starts when a player depresses the ‘start button’ or takes equivalent action to initiate the game and ends when all money or money’s worth staked or won during the game has been either lost or delivered to, or made available for collection by the player and the start button or equivalent becomes available to initiate the next game.
    2. A player should commit to each game cycle individually, continued contact with a button, key or screen should not initiate a new game cycle.

    Applies to: all casino games (excluding peer-to-peer poker and slots).

    Proposal 3: Prohibition on autoplay

    RTS requirement 8A: The gambling system must require a customer to commit to each game cycle individually.

    RTS implementation guidance 8A:

    1. This requirement does not prohibit offering functionality to automatically post blinds in peer-to-peer poker.

    Applies to: all gaming (including bingo).

    Proposal 4: Prohibition of features which may give the illusion of “false wins”

    RTS requirement 14F: The gambling system must not celebrate a return which is less than or equal to the total stake gambled.

    RTS implementation guidance 14F:

    1. By ‘celebrate’, the Gambling Commission means the use of auditory or visual effects that are associated with a win are not permitted for returns which are less than or equal to last total amount staked.
    2. The following items provide guidelines for reasonable steps to inform the customer of the result of their game cycle:
    1. Display of total amount awarded.
    2. Winning lines displayed for a short period of time that will be considered sufficient to inform the customer of the result. This implementation should not override any of the display requirements (as set out in RTS 7E).
    3. Brief sound to indicate the result of the game and transfer to player balance.

    Applies to: all casino.

    Proposal 5: Operator-led simultaneous products

    RTS requirement 14C: The gambling system must not offer functionality which facilitates playing multiple games at the same time.

    RTS implementation guidance 14C:

    1. Operators are not permitted to offer functionality designed to allow players to play multiple games at the same time. This includes, but is not limited to, split screen or multi-screen functionality.
    2. Combining multiple games in a way which facilitates simultaneous play is not permitted.

    Applies to: all casino (excluding peer-to-peer poker).

    Proposal 6: Display of net position and time spent

    RTS requirement 2E: All gaming sessions must clearly display a customer’s net position, in the currency of their account or product (for example, pounds sterling, dollar, euro) since the session started.

    RTS implementation guidance 2E: Net position is defined as the total of all winnings minus the sum of all losses since the start of the session.

    Applies to: all casino (excluding peer to peer poker).

    RTS requirement 13C: The elapsed time should be displayed for the duration of the gaming session.

    RTS implementation guidance 13C:

    1. Time displayed should begin either when the game is opened or once play commences.
    2. Elapsed time should be displayed in seconds, minutes and hours.

    Applies to: all casino (excluding peer to peer poker).

    Proposal 7: Update to security audit requirements

    We take the opportunity to remind licensees that the new security audit requirements under section 4 of the RTS came into force on 31 October 2024. Annual security audits conducted after 1 November 2024 must be to the updated to comply with the International Organization for Standardization (ISO)27001:2022.

    Next Steps

    The new RTS requirements come into force on 17 January 2025, meaning licensees must adhere to these requirements before this date.

    Please get in touch if you have any questions about the new game design requirements.

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    31Oct

    Gambling Commission Annual Report 2023-2024

    31st October 2024 Ting Fung Harris Hagan, Responsible Gambling, Uncategorised 98

    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.

    1. 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.

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    18Oct

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

    18th October 2024 Harris Hagan Harris Hagan, Marketing, Responsible Gambling 95

    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.

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    30Jul

    Gambling Survey of Great Britain: Publication of first annual report

    30th July 2024 Chris Biggs Harris Hagan, Responsible Gambling, White Paper 124

    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.

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    26Jul

    Account withdrawals: The mask operators cannot hide behind

    26th July 2024 Jessica Wilson Harris Hagan, Responsible Gambling, Uncategorised 108

    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.

    Please sign up to our blog to receive further news, insight and commentary.

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    03Apr

    Reminder: Changes to LCCP now in force

    3rd April 2024 Chris Biggs Responsible Gambling 158

    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.

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