04Apr

White Paper Series: Gambling Commission update on the financial risk assessments pilot

4th April 2025 Tiffany Babayemi 20

On 10 February 2025, the Gambling Commission provided an update on the ongoing three-stage pilot of financial risk assessments (the “Pilot”) following completion of the first Stage. In this blog, we consider the Gambling Commission’s findings from Stage 1 and what can be expected from the next Stages of the Pilot.

What is the Pilot?

Following the Gambling Commission’s consultation response of 1 May 2024, social responsibility code provision 3.4.6 was introduced requiring operators in the three highest bands of fee categories, and volunteers in the lower fee categories, to participate in its Pilot of financial risk assessments.

Financial risk assessments are intended as a way of identifying high-spending online gambling customers who may be in financial difficulty and at risk of gambling-related harm. The risk assessment is intended to be “frictionless” and to be provided by a credit reference agency. The Pilot is being used to test how financial risk assessments can work in practice and to support a frictionless customer journey, and to assess appropriate thresholds.

The Pilot was expected to take place in three stages running from 30 August 2024 to 31 March 2025 inclusive, however, the Gambling Commission can extend the Pilot period until the end of April 2025 should this be necessary for practical reasons. Stage 1 looked at historic data, Stage 2 tested “more recent” data, and Stage 3 reportedly used current data. It is important to note that the Pilot is not a ‘live test’, and consumers have not been affected.

The Pilot is testing four set success criteria:

Frictionless part 1: What proportion of those high-spending customers checked could get a frictionless financial risk assessment if they were introduced?
Frictionless part 2: How quickly could credit reference agencies return a financial risk assessment?
Data relevance and accuracy: Is using credit reference data meaningful for understanding of an individual customer’s current or imminent overall financial risk and financial vulnerability?
Implementation issues: How could the data be presented to operators to help understand the level of financial risk or vulnerabilities associated with individual customers? How could operators build financial risk assessments into their overall customer interaction processes?

At each stage of the Pilot, the Gambling Commission has been testing at least one of the success criteria, and each stage is expected to provide different results. For example, the Gambling Commission stated that “it is likely that a smaller proportion of accounts would be able to receive a frictionless assessment when using historical data”. In our view, this is likely due to historical data having limited information available compared to more current or real-time data. The Gambling Commission has stated that its final decisions regarding financial risk assessments will also be informed by other evidence and data.

Stage 1 of the Pilot

When Stage 1 completed, it was considered by the Gambling Commission as “a pilot of the Pilot”. The Gambling Commission’s intentions for Stage 1 were to:

Test how the Pilot participants prepared data for the credit reference agencies and how the data was returned to the Pilot participants;
Test the Pilot reporting tools to see if the right data was getting back to the Gambling Commission; and
Refine and improve its systems for Stages 2 and 3 of the Pilot and identify issues that need further exploration.

Stage 1 looked at historical data for a cohort of inactive customers, and tested customer accounts which had met high-spending thresholds during a set period. The account details were shared with one or more credit reference agencies, which provided a financial risk assessment at the point the threshold was met. Stage 1 was testing what financial risk indicators were present when the account met the high-spending threshold. The credit reference agencies are replicating how they are providing financial data to operators as close as possible to automated or live implementation.

What were the findings of Stage 1?

Stage 1 involved more than 530,000 assessments across three credit reference agencies for approximately 300,000 accounts for the relevant year.
Approximately 95% (503,500) of these assessments met the first success criteria of a frictionless assessment. This means that the data shared by the operators was successfully matched by the credit reference agencies, which would allow a financial risk assessment to be returned to the operator in a frictionless manner.
Of the 95%, just over 3% were considered “thin files”, where the customer can be matched, there is no positive credit history, but the lack of negative indicators means they are considered lower risk in terms of financial vulnerability.
Approximately 5% (26,500) of the assessments were unmatched or the data provided by operators was invalid. These assessments were not able to receive a frictionless financial risk assessment. This is lower than the 20% anticipated by the White Paper.
Of the 5%, just over 4% of the assessments were unmatched (where the credit reference agency was unable to identify the customer and no information was available), and less than 1% were due to data formatting issues, invalid data, or duplications in the data provided to the credit reference agencies by operators.

According to the Gambling Commission, Stage 1 has primarily met the first success criterion on the proportions of customers that might be able to receive a frictionless check. It also provided insights on data quality and understanding (success criterion 3) and implementation issues (success criterion 4). Stage 1 did not look at the speed of an assessment (success criterion 2).

However, Stage 1 identified issues relating to data quality and implementation, which are to be explored further before financial risk assessments are introduced.

Data quality issues

The quality of operator data can play a role in reducing friction and operators can take steps to reduce duplicate accounts and rectify incorrect data fields to improve data linkage rates.
Credit reference agencies have unique systems and ways of presenting the findings back to the Pilot participants which caused some issues for the Pilot participants in assessing the findings. For example, a green RAG rating means different things across credit reference agencies.

At the time of the update, the Gambling Commission claimed that more can be done in Stages 2 and 3 to support operator understanding of different systems and allow credit reference agencies to make refinements to their models to reduce unnecessary variation or confusion. The Gambling Commission will also propose common definitions, such as time periods, to ensure commonality across credit reference agencies where needed.

Implementation issues

Pilot participants seem uncertain about the exact actions that might be proportionate when they consider both the financial risk assessment and the information they already hold and act on for customer interaction.

The Gambling Commission has created a working group of the Pilot participants to focus on these issues with the intention of informing guidance to operators. As part of Stage 1, the participants shared anonymised case studies to help provide early insight into how the financial risk assessment could inform decision making.

What next?

The Gambling Commission’s progression to Stage 2 reportedly involved testing more recent data and refining some of the aspects tested in Stage 1. The emerging findings from both Stage 1 and Stage 2 reportedly informed the Gambling Commission’s approach to Stage 3 of the Pilot, where current data is being used.

The Gambling Commission has emphasised that its findings of Stage 1 are preliminary but it expects the interactive and collaborative approach of the Pilot to prove worthwhile in testing how financial risk assessments might work in practice before final decisions are made.

Financial risk assessments were one of the more controversial proposals of the Government’s White Paper, and it is therefore vital that the Pilot is conducted carefully and transparently. Whilst, in theory, financial risk assessments are workable, one of the industry concerns was how risk assessments would be conducted in practice. Stage 1 has already identified possible hurdles, including the discrepancies across credit reference agencies. These practicalities must be ironed out for financial risk assessments to be effective, particularly as Stage 1 demonstrated that 26,500 of the assessments were unmatched or the data provided by operators was invalid. As such, without these practicalities addressed, these assessments may still create a disproportionate amount of friction for customers and operators alike. The Gambling Commission’s update indicated that it took these findings into consideration as Stage 2 of the Pilot progressed. Whilst the outcome of Stage 1 seems relatively positive, we wait to see the outcome of Stages 2 and 3 before a full assessment on the success of the Pilot can be made.

Please get in touch with us if you have any questions about the financial risk assessments Pilot or its Stage 1 findings.

26Mar

White Paper Series: Gambling Commission announces new rules increasing safer and simpler gambling promotions for consumers

26th March 2025 Harris Hagan 43

On 26 March 2025, the Gambling Commission announced changes aimed at increasing the safety and simplicity of consumer promotional offers. The changes include a mixed product promotion ban and limiting the bonus wagering requirements to 10. Changes will also be made to the Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) regarding Social Responsibility Code 5.1.1 (Rewards and Bonuses) to increase clarity as to the Gambling Commission’s current expectations of operators. These changes are part of the consultation response to the Autumn 2023 Consultation and are in line with the commitments within the White Paper.

What are the changes to be expected?

Mixed product promotion ban

The new rules ban operators from offering mixed product promotional offers which provide bonuses on the condition the consumer plays different gambling products, such as betting and playing slots. The Gambling Commission highlighted that this ban aims to reduce harm and boost fairness and openness, due to evidence showing consumers are more at risk of harm when they gamble on multiple products rather than a single product. There is also the risk that mixed product promotions confuse consumers because of complex terms and conditions.

In the consultation response, the Gambling Commission clarified that this ban applies to the mixing of products within an individual incentive or promotional offer, where terms are linked and shared.

From 19 December 2025, all gambling operators, except holders of gaming machine technical and software licences, will be banned from offering such mixed product promotional offers.

Bonus wagering requirements limited to 10

This new rule will require operators to cap the wagering requirement of promotional offers to 10, in order to decrease the likelihood of harm, reduce complexity, and improve transparency, while maintaining consumer choice. The Gambling Commission highlighted that some promotional offers provide bonus funds to consumers on the condition the consumer re-stakes any winnings multiple times before being allowed to withdraw winnings from the bonus. For example, a £10 bonus with 50 times wagering requirement requires the consumer to play through £500 before the winnings can be withdrawn. As such, high wagering requirements could confuse consumers and lead them to gamble for longer, and faster, than they are used to.

From 19 December 2025, all gambling operators except holders of gaming machine technical and software licences will be required to cap the wagering requirement to 10.

Rewording the Rewards and Bonuses section of the LCCP

To ensure increased clarity of the Gambling Commission’s current expectations of operators, the structure and wording of LCCP Social Responsibility Code 5.1.1 (Rewards and Bonuses) will be amended.

From 19 December 2025, SRCP 5.1.1 will read:

The following applies where a licensee makes available to any customer, or potential customer, an incentive or reward scheme or other arrangement under which a customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) (‘the benefit’).

Licensees must:
1. Set out terms and conditions, in relation to an incentive, which are clear, transparent, and fair and readily accessible to any customer or potential customer to whom it is offered.

Licensees must not:
1. Apply wagering requirements, which requires a customer to play through bonus funds, over a maximum of 10 times. A wagering requirement is a where a customer is required to make wagers totalling a particular value for funds to become withdrawable.
2. Include more than one type of gambling product (betting, casino, bingo, and lottery) within an incentive.
3. Alter or increase the receipt or the value, or amount of the incentive if the qualifying activity or spend is reached within a shorter time than the whole period over which the benefit is offered.
4. Construct incentives where, if the benefit comprises of free or subsidised travel or accommodation which encourages the customer’s attendance at a particular licensed premises, it is offered on terms that directly relate to the level of the customer’s prospective gambling.

If a licensee makes available an incentive or reward scheme for customers, designated by the licensee as ‘high value, ‘VIP’ or equivalent, it must be offered in a manner which is consistent with the licensing objectives.

Licensees must take into account the Commission’s guidance on high value customer incentives.

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

“These changes will better protect consumers from gambling harm and give consumers much better clarity on, and certainty of, offers before they decide to sign up.”

Next steps

The changes to mixed product promotions, bonus wagering requirements and SRCP 5.1.1 of the LCCP will come into force on 19 December 2025.

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

10Mar

White Paper Series: Supplementary consultation published calling for views on deposit limits

10th March 2025 Harris Hagan 63

The Gambling Commission is calling for views on how to achieve consistency and clarity for consumers that choose to set deposit limits.

The supplementary consultation, published on 6 March 2025, calls for views from interested parties on new rules aimed at increasing consumer control over deposit limits, which will come into force on 31 October 2025 and which we discussed in our blog: White Paper Series: New rules on customer led tools, customer funds and statutory levy. In this new supplementary consultation, the Gambling Commission is seeking opinions on how deposit limits should be defined and communicated to customers, with the aim of achieving consistency and clarity across the industry.

This is the fourth Gambling Commission consultation linked to the White Paper.

Why is a supplementary consultation needed?

The Gambling Commission acknowledges that typically, ‘deposit limits’ have worked as a simple limit on the amount a customer can deposit over a specific time period (for example, if a customer chooses to set a £20 weekly deposit limit, they can deposit a maximum of £20 into their account in that week). However, they have recently observed some operators offering ‘net deposit limits’, whereby withdrawals are also taken into account.

“For example, if a customer chooses to set a £20 weekly deposit limit but then withdraws £10 then the total amount they can deposit that week goes up to £30. This can be confusing for customers, especially if the descriptions for the different types of limit are similar.”

The Gambling Commission considers that financial limits termed ‘net’ deposit limits would not meet the definition of ‘deposit limits’ proposed in its initial consultation. It is concerned that the introduction of ‘net’ deposit limits has created inconsistency in how deposit limits work, which prevents the customer being able to make a proactive and informed choice as to what financial limits are right for them – limiting consumer empowerment and choice.

To ensure clarity, rather than implement the initial consultation and ‘pursue this as a compliance matter’, the Gambling Commission has chosen to consult further on this issue. The supplementary consultation therefore sets out proposals to:

revise the remote gambling and software technical standards (”RTS”) relating to financial limits to make clear that, as a minimum and default, ‘gross’ deposit limits must be offered to customers;
ensure that the term ‘deposit limit’ is used consistently by operators, i.e. only to describe ‘gross’ and not ‘net’ limits;
provide increased consumer choice by amending the implementation guidance for the RTS to allow for ‘net’ limits to be set in addition to other types of limits, should the customer choose.

The Gambling Commission’s view is that offering a default type of deposit limit across all operators will be beneficial for consumers in terms of improving understanding of how limits work and would enable consumers to use the same type of limit across more than one account.

Next steps

The supplementary consultation is open until 30 April 2025.

The 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 would like our assistance preparing a response to the supplementary consultation or if you have any questions about these upcoming changes.

28Feb

White Paper Series: Statutory Instrument published for statutory levy

28th February 2025 Harris Hagan 66

Following the final Parliamentary procedures, The Gambling Levy Regulations 2025 (the “Levy Regulations”) were signed into law on 25 February 2025 as a statutory instrument.

As a reminder, the Levy Regulations will come into effect on 6 April 2025 and require all operating licence holders in Great Britain to pay a mandated levy to the Gambling Commission, unless the amount of that levy is £10 or less.

The levy period

The amount due under the Levy Regulations is calculated by reference to an operator’s gross gambling yield (“GGY”) in each levy period. Generally, the levy period runs from 1 April in one year to 31 March in the next. However, the first levy period for most operating licence holders will be 9 month period from 1 July 2024 to reflect the way that the Gambling Commission collects the relevant data. The exception being lottery operating (society) licence holders for whom the first levy period will be the 12 month period from 1 April 2024. Basing the calculation upon GGY in the preceding year will provide certainty as to the amount of the levy payable in any given year.

The leviable amount

The “leviable amount” (effectively GGY) in respect of a levy period is as follows:

(3) In relation to a holder of an operating licence which is not a lottery operating licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of—

(i) amounts paid during the levy period to the holder of the operating licence by way of stakes in connection with the activities authorised by the operating licence, and

(ii) amounts (exclusive of value added tax) that otherwise accrue during the levy period to the holder of the operating licence directly in connection with activities authorised by the licence, minus

(b) the aggregate of amounts deducted during the levy period by the holder of the operating licence for the provision of prizes or winnings in connection with the activities authorised by the licence.

(4) In relation to a holder of a lottery operating (external lottery manager) licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of amounts paid to, or otherwise obtained by, the holder of the operating licence during the levy period by way of fees in connection with the lotteries promoted in reliance on the operating licence, minus

(b) the aggregate of amounts deducted during the levy period from the amounts described in sub-paragraph (a) by the holder of the operating licence for the provision of prizes in connection with the lotteries promoted in reliance on the operating licence.

(5) In relation to a holder of a lottery operating (society) licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of the proceeds of lotteries promoted in reliance on the operating licence which accrue during the levy period, minus

(b) the aggregate of amounts deducted during the levy period from the proceeds described in sub-paragraph (a) by the holder of the operating licence for—

(i) the provision of prizes in connection with the lotteries promoted in reliance on the operating licence, and

(ii) a purpose described in section 99(2) of the Gambling Act 2005.

The amount of the levy

Regulation 4 of the Levy Regulations sets out how the amount of the levy will be determined:

1.1% of the leviable amount for holders of the following operating licences:
1. a gambling software operating licence;
2. a remote betting intermediary operating licence which is not a betting intermediary (trading room only) operating licence;
3. a remote bingo operating licence;
4. a remote casino operating licence;
5. a remote general betting operating licence.

0.5% of the leviable amount for holders of the following operating licences:
1. a betting intermediary (trading room only) operating licence;
2. a non-remote betting intermediary operating licence;
3. a non-remote casino operating licence;
4. a non-remote general betting operating licence which is not a non-remote general betting (on-track or on-course) operating licence.

0.2% of the leviable amount for holders of the following operating licences:
1. a gaming machine general operating licence for an adult gaming centre;
2. a non-remote bingo operating licence;
3. a non-remote general betting (on-track or on-course) operating licence.

0.1% of the leviable amount for holders of the following operating licences:
1. a gaming machine general operating licence for a family entertainment centre;
2. a gaming machine technical operating licence;
3. a lottery operating licence;
4. a pool betting operating licence.

If an operating licence is combined (i.e. it includes more than one of the licences described in regulation 4 above), the levy will be payable in respect of the leviable amount for each licence held.

First levy period only – Note for holders of an operating licence which is not a lottery operating (society) licence – so most operators – the amount of the levy in respect of the first levy period is A × 1⅓, where A is the amount of the levy that would be determined in respect of that period in accordance with the applicable set rate payable of the leviable amount for the kind of operating licence in subsequent levy periods. This is because the first levy period for most licensees is only 9 months, rather than 12 months, and this is a pro rata calculation of the leviable amount for a 12-month period.

Example: for an operating licensee with a remote bingo operating licence, the first levy payment will be 1.1% of the GGY for the period 1 July 2024 – 31 March 2025 × 1⅓, payable by 1 October 2025. The subsequent levy payment will be 1.1% of the GGY for the period 1 April 2025 – 31 March 2026, payable by 1 October 2026.

Timing of payment of the levy

The levy must be paid before 1 October following the end of each levy period.

We trust our explanation of the calculation is helpful. For further clarification, we understand from the explanatory memorandum to the Levy Regulations that the Gambling Commission intends to publish guidance on the calculation, payment, collection and enforcement of the statutory levy in advance of the Levy Regulations coming into force on 6 April 2025.

For further details of the statutory levy and the Government’s announcement to introduce the statutory levy, please see our previous blog: White Paper Series: Initial Consultation Response on Statutory Levy and Update on Online Slot Stake Limits.

Please get in touch with us if you have any questions about the statutory levy or the Government’s announcement.

27Feb

White Paper Series: Statutory Instrument published for online slot stake limits

27th February 2025 Harris Hagan 69

Following the final Parliamentary procedures, The Gambling Act 20 05 (Operating Licence Conditions) (Amendment) Regulations 2025 was signed into law on 25 February 2025 as a statutory instrument (“SI”).

As a reminder, the SI will have the effect of adding a new licence condition to all remote casino operating licences to introduce a maximum stake limit for online slots games in Great Britain.

Operators will have a transitional period of 6 weeks from the day after the SI was made (until 9 April 2025) to implement the £5 limit per spin for adults aged 25 and over (which will temporarily apply to all adults), and a further 6 weeks (until 21 May 2025) to implement the £2 limit per spin for 18 to 24 year olds.

For further details of the SI and the Gambling Commission’s guidance, see our previous blog: White Paper Series: Gambling Commission publishes online slots stake limit guidance

Please get in touch with us if you have any questions about the SI or the related Gambling Commission guidance.

12Feb

White Paper Series: Gambling Commission publishes online slots stake limit guidance

12th February 2025 Harris Hagan 104

On 30 January 2025, the Gambling Commission published its Online slots stake limit guidance following the Statutory Instrument (“SI”) (The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024) which was laid on 10 December 2024. The SI follows the Government’s response to its consultation to introduce a maximum stake limit for online slots games in Great Britain. Subject to the final Parliamentary procedures, the SI will have the effect of adding a new condition to all remote casino operating licences.

What does the SI say?

The SI states:

1. The condition specified in this regulation is attached to each remote casino operating licence, including remote casino operating licences issued before this regulation comes into force.

2. The condition is that, for an online slots game, the total amount which an individual may stake in relation to any game cycle may not exceed—

(a) £2, where the individual is less than 25 years old, and

(b) £5, where the individual is 25 years old or over.

3. Where this condition is attached to a remote casino operating licence which was issued before this regulation comes into force, the condition has effect from the date on which this regulation comes into force.

4. This regulation is subject to the transitional provision in regulation 6.

5. In this regulation:

“game cycle” means, for an online slots game, the period beginning with the initiation of the game by the individual and ending at the point at which all money staked during the game has been lost or all money won during the game has been or delivered to or made available for collection by the individual, as the case may be;

“online slots game” means a casino game that is—

(a) a reel-based game, and

(b) is played online.

“reel-based game” means a game in which—

(a) moving or changing images or text are displayed by the use of visual representations of reels or other means, and

(b) an individual may win a prize or some other opportunity or advantage, as represented by the resulting arrangement of those images or text;

“stake” means to pay or risk an amount in connection with an online slots game.

Gambling Commission’s Guidance

As the SI sets out, all games which meet the definition of an online slots game will be subject to a maximum stake per game cycle. A game cycle begins when the customer presses spin and the stake is deducted from their account balance and ends when any winnings are paid to the player’s balance, or when the stake has been lost.

For customers who are aged 25 and older, the maximum they can stake per game cycle for online slots is £5.

For customers who are aged 18 to 24, the maximum they can stake per game cycle for online slots is £2.

Separately, the Gambling Commission confirmed in a consultation response for online games design that for remote slots, it must be a minimum of 2.5 seconds from the time a game is started until the next game cycle can be commenced.

Examples

The Gambling Commission also set out some examples:

Scenario A: A customer aged 27 stakes £5 on an online slot game. No other opportunities to stake can be offered until the game cycle has concluded as £5 is the maximum stake permitted for customers aged 25 and over.

Scenario B: A customer aged 27 stakes £2 on an online slot game. Further staking opportunities could be offered within the same game cycle up to the value of £3 for a total staked per game cycle of £5.

Scenario C: A customer aged 19 stakes £2 on an online slot game. No other opportunities to stake can be offered until the game cycle has concluded as £2 is the maximum stake permitted for 18 to 24 year olds.

Scenario D: A customer aged 27 stakes £5 on an online slot game and wins a prize offer which they can accept (and end the game cycle) or reject (and gamble their stake again for a chance to win a larger prize). Importantly, the customer is not being asked to stake any additional funds. The customer chooses to accept the additional gamble but is unsuccessful and therefore receives £0. The customer’s balance is reduced by £5 when they initiate the spin, and as they receive no prize their balance remains unchanged following the conclusion of the game cycle.

Who does the SI apply to?

As explained in the SI, the condition will apply to operators who hold remote casino operating licences, including those licences that were issued before the regulation comes into force. The SI states that for licences issued before the regulation is in effect, the condition will have effect from the date the regulation comes into force.

Timeline

The SI for this measure was laid in Parliament on 10 December 2024.
This legislation needs to be debated (usually scheduled for 6 to 8 weeks after the legislation is laid, although not guaranteed) and approved by both the House of Commons and the House of Lords.
After the legislation is debated and approved it will be made (signed by the Minister) and come into force.
From the day the legislation is made, operators will have an implementation period of 6 weeks to implement the £5 limit per spin for adults aged 25 and over (which will temporarily apply to all adults), and a further 6 weeks to implement the £2 limit per spin for 18 to 24 year olds.

Please get i n touch with us if you have any questions about the SI or Gambling Commission guidance.

05Feb

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

5th February 2025 Harris Hagan 100

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?

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.

04Feb

White Paper Series: Gambling Commission launches January 2025 consultation

4th February 2025 Harris Hagan 102

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:

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
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:

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;
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);
display of net position and elapsed time (GMTS 15.3);
awards less than or equal to the last total stake gambled must not be celebrated (GMTS 15.4); and
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 (SR C P 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.

16Dec

White Paper Series: Gambling Act Review Evaluation Plan – finding “the right balance of regulation in the digital age”

16th December 2024 Ting Fung 97

The Department for Digital, Culture, Media and Sport (“DCMS”) announced on 5 December 2024 that it will work with the Gambling Commission to deliver an appropriate programme of work to evaluate the impact of the policy measures implemented following the Gambling Act Review (“GAR”).

The previous Conservative Government’s plans for reform of gambling regulation involved over 60 key policy proposals, which were set out in its White Paper: High stakes: gambling reform for the digital age (published in April 2023). In its announcement, DCMS recognised the difficulty of attributing observed changes to any one policy measure in this complex piece of work, particularly given that policy measures have different timeframes and implementation processes, and potentially intersecting outcomes and impacts, but emphasised the importance, nonetheless, of evaluating the collective impact of the GAR.

What has happened so far?

In January 2024, DCMS and the Gambling Commission commissioned the National Centre for Social Research (“NatCen”) to undertake an evaluation scoping study. As part of this study, the impacts and outcomes of specific proposals will be evaluated individually, as well in a package to understand the collective impact of policy measures that have been implemented so far.

NatCen then held a series of Theory of Change (“ToC”) workshops with DCMS and Gambling Commission colleagues to identify a series of specific policy measures that had been developed since the publication of the White Paper. The scoping work highlighted that this evaluation plan requires a proportionate approach, focusing on a number of specific policy measures in detail.

What will happen next?

The forthcoming evaluation will focus on evaluating the impact that can be attributed to a number of specific policy measures implemented under the GAR. For each policy change, the evaluation will aim to gather evidence and formulate findings to answer the following questions:

What intended and unintended outcomes and impacts have been brought about in the short and longer term by the Gambling Commission, DCMS and independently led proposals in the two-year evaluation that were introduced following the GAR?
a. In what ways, if any, did these outcomes and impacts link and interact?
Were the proposals implemented as intended?
a. Did the proposals introduced reach online and land-based gambling providers and consumers as intended?
b. In what ways, if any, did implementation vary from that intended and why? If there was variation, what were the associated impacts?
What was the distinct contribution of the DCMS, the Gambling Commission and independently led proposals in achieving the observed outcomes and impacts?
a. How and why did the proposals contribute to reducing gambling-related harm to vulnerable groups and their wider communities in the short-term and longer-term (or not)? What worked best for whom, why and when?
b. How and why did the proposals contribute to increasing gambling protections, while ensuring a fair and open safeguarding of gambling-related consumer freedoms and choice for customers in the short-term and longer-term (or not)? What worked best for whom, why and when?
c. How and why did the proposals contribute to regulating the online and the land-based gambling industries more equitably in the short-term and longer-term (or not)? What worked best for whom, why and when for the online and the land-based industries?
What was the combined contribution of the proposals in achieving the above observed outcomes and impacts?
What conditions were necessary for the proposals to achieve the above observed outcomes and impacts?
What internal and external influencing contextual factors supported or impeded the proposals to achieve the above observed outcomes and impacts?
a. In what ways, if any, did internal and external influencing contextual factors interact with the proposals?
What are the implications of the findings from the evaluation for the implementation of future gambling-related policy changes?

The aim of the evaluation is to understand the impact and outcomes of specific policies – both individually and collectively – and also to establish plausible causation related to the GAR policy measures with a high degree of certainty, carefully factoring in the impact of alternative explanations. DCMS emphasises the importance of the latter given the “many and diverse” nature of the policy measures in an implementation context that “is complex, dynamic and evolving”.

How will the evaluation be designed?

With the aim of establishing a clear degree of confidence in each claim, the hypotheses (i.e. the causal contribution claims) will be developed using Contribution Analysis, which is a step-by-step approach to data collection, triangulation and analysis based on a ToC and testable causal contribution claims. Process Tracing will then be used to ensure that the hypotheses are empirically testable and guide data collection.

The evaluation will draw on multiple sources of evidence, including qualitative insights and findings from quasi-experimental quantitative analysis. DCMS believes that quasi-experimental designs “will enable robust causal estimates of the degree to which changes in outcomes can be attributed to specific GAR policy measures”.

What methodology will be used?

The quasi-experimental designs will draw from online and land-based operator data, whilst in-depth interviews, focus groups, diary studies, and surveys will be used for qualitative impact and process evaluation. The latter would involve a range of participants, including operators, people who gamble, and other relevant stakeholders, such as local providers of support services. This will run alongside periodical tracking of GAR policy implementation and external influencing factors.

Who else is involved?

NatCen will establish two independent groups to provide advice and guidance throughout the evaluation, but these groups will not play a direct role in policy development:

Lived Experience Panel
This panel will work alongside the Gambling Commission’s pre-existing Lived Experience Advisory Panel, aiming to ensure that the voices of different groups with lived experience of gambling and gambling harm, including family, friends and colleagues of people who gamble (affected others) are considered.
Evaluation Advisory Group
This group will comprise researchers, academics and evaluators with expertise and experience in the field of gambling policy, research and regulation. They will provide independent assurance for key evaluation products and outputs, and assist evaluators in the anticipation and mitigation of risks and issues which may impact the evaluation.

Next steps

NatCen and the Gambling Commission will start reaching out to stakeholders in the coming weeks, with elements of evaluation fieldwork planned to begin in January 2025. Bryony Sheldon, Gambling Commission Director of Policy added in a blog post:

“The experience of consumers, operators and other stakeholder groups will be a key part of the evaluation in the coming months, as we welcome participation in surveys, interviews and other planned research. We will also use existing Gambling Commission advisory groups, and Industry Forum to both promote participation in the evaluation and help shape how we collect data efficiently.”

Several outputs of evaluation findings will be provided to DCMS and the Gambling Commission during and at the end of the evaluation to enable evidence-based insights in ongoing policy development and decision-making.

DCMS expect the evaluation to report in 2026.

Please get in contact with us if you have any questions regarding gambling regulation in Great Britain, the White Paper or the GAR evaluation plan.

29Nov

White Paper Series: Initial Consultation Response on Statutory Levy and Update on Online Slot Stake Limits

29th November 2024 John Hagan 110

The Department for Digital, Culture, Media and Sport (“DCMS”) announced on 27 November 2024 that the Government will bring forward the statutory levy on gambling operators to generate £100 million for the research, prevention and treatment of gambling harms. The Government has also confirmed online slot stake limits of £5 for adults aged 25 and over and £2 for young adults aged 18 to 24.

Statutory Levy

Gambling Minister Baroness Twycross indicated in her Ministerial Statement that the update is only an initial response to the consultation on the structure, distribution and governance of the statutory levy on gambling operators launched on 17 October 2023 (see our previous blog on the consultation), and that its aim is to publish a further response document in the coming months. The Government maintains its commitment to having the levy in place by the summer of 2025.

The Government has confirmed that the mandated levy will be charged to all licensed operators at varying levels depending on the sector, at a set rate for all holders of a given Gambling Commission licence, with rates accounting for the difference in operating costs and the levels of harmful gambling associated with different gambling activities. “In recognition of the higher rates of problem gambling associated with products online compared to most land-based products, as well as the higher operating costs in the land-based sector, the levy will see online operators pay more towards research, prevention and treatment.”

The Government believes that a mandated levy “will guarantee increased, ringfenced and consistent funding to prevent and tackle gambling harm” and “ensure all operators contribute a fair share”, stating that “under the current voluntary system not all gambling companies contribute equally, with some operators paying as little as £1 a year towards research, prevention and treatment”.

The levy will be introduced via secondary legislation. It will be collected by the Gambling Commission and overseen by a Gambling Levy Programme Board that will have central oversight, and which will in turn be assisted by a Gambling Levy Advisory Group that will provide expert advice on funding priorities and other emerging issues.

Levy funding will be split as follows:

50% will be directed to NHS England and appropriate bodies in Scotland and Wales to develop a comprehensive support and treatment system. This will include referrals and triage, through to recovery and aftercare. So “half of funding to directly benefit NHS-led gambling treatment system”.
30% will go towards investment in gambling harm prevention, which could include measures such as national public health campaigns and training for frontline staff. A lead commissioning body in this crucial and novel area has not yet been appointed, with the Government taking the time to get the important decision on the future of prevention right.
20% will be directed to UK Research and Innovation (UKRI) and the Gambling Commission to develop bespoke Research Programmes on Gambling, undertaking vital research to inform future policy and regulation.

“The current funding system for research, prevention and treatment of gambling-related harms reliant on voluntary donations from industry is no longer fit for purpose. While the industry’s significant uplift in the level of donations in recent years is welcome, we recognise that the quantum of funding is not the only requirement for an effective and equitable system.”

Baroness Twycross, Gambling Minister

The Government emphasises in its initial response that with distribution of funding to the NHS, UKRI and the Gambling Commission, “the gambling industry will have no say over how money for research, prevention and treatment is spent”.

A formal review of the levy system will be conducted within five years, where the structure and health of the levy system will be assessed, and adjustments can be made to ensure that the Government is achieving its aims.

Online slot stake limits

As widely anticipated, stake limits will be set at £5 per spin for adults aged 25 and over and £2 per spin for young adults aged 18 to 24, “bringing online slot games in line with existing restrictions on slot machines in casinos”. DCMS’ press release cites Evidence from the Office for Health Improvement and Disparities and the Gambling Survey for Great Britain which shows that young adults can be particularly vulnerable to gambling related harm with under 25s having one of the highest proportion of respondents scoring eight or more on the Problem Gambling Severity Index of any age group. It also reiterates that online slots are “a higher-risk gambling product associated with large losses, long sessions, and binge play”.

Next steps

Operators are required to maintain voluntary financial contributions to research, prevention and treatment until the levy comes into force, with Baroness Twycross adding that its initial response “should provide sufficient notice to licensees of our approach”.

As stated above, the Government aims to publish its full response to the statutory levy consultation in the coming months, which will also include further detail on the 30% investment of levy funds in gambling harm prevention. The Government notes that the statutory instrument is silent on the distribution of levy funding, including in relation to prevention, and it is pressing on with its initial response and progressing the legislative process to meet its commitment to have the levy in place by the summer of 2025.

In respect of online slot stake limits, these will be subject to an implementation period. This means that, following debates in Parliament, operators will have six weeks from the day the statutory instrument is made to implement the £5 limit and a further six weeks thereafter to implement the £2 limit.

We will provide you with updates in due course but please do not hesitate to get in touch if you have any questions.

Our preliminary thoughts on the initial response

At the heart of the White Paper is a balance between consumer freedoms and choice on one hand, and protection from harm on the other. The White Paper was broadly well received when it was delivered in Parliament, within all sectors of industry, by the NHS, in the third sector and at the Gambling Commission, because the (Conservative) Government had achieved a healthy balance in its reforms; crudely put, there was something in it for everyone. As we said in our inaugural blog on the White Paper in May 2023, however, “it is imperative that the process remains balanced and that all the key stakeholders see comparable progress in relation to their interests”.

The announcement of the bringing forward of the statutory levy by the Labour Government is undoubtedly a momentous day for certain stakeholders and a cause for their celebration, and perhaps unsurprisingly the language is emotive and provocative, with for example the NHS saying problem gambling has “skyrocketed” and resolving to do all it can “to protect gamblers from this billion-pound industry”, and the All Party Group for Gambling related Harm saying that “for the first time the gambling industry will be mandated to pay for the harm they cause”. Even the Government itself in its press release makes more of the £1 some operators have been paying than the £50 million in voluntary contributions by Betting and Gaming Council members this year alone.

That said, we believe that it was always inevitable that the Government (whether Labour or Conservative) would lead with the statutory levy before introducing any measures relating to consumer freedom or choice, such as the long overdue land-based casino modernisation. The new Labour Government had to establish its credentials as being tougher on the gambling industry than the previous government and deliver on its manifesto promise commitment to reduce gambling harm. And we would suggest it was also sadly inevitable that the rhetoric would be critical of industry, even unfair and misleading, particularly at a time when fundamental gambling statistics such as the percentage of problem gamblers in the population are so keenly contested.

But the statutory levy itself was a fundamental plank of the White Paper, so it does not come as a surprise, even if as rumoured the rates transpire to be slightly higher than proposed, again Labour being tougher than the Conservatives. Indeed, industry has been supportive of a statutory levy in principle for some years now. Nor are the online slot stake limits a surprise, with the previous government making a similar announcement before disastrously calling an early General Election. Further, the financial implications of both the statutory levy and online slots stake limits should already be baked into industry projections and should not have a punitive impact, at least in the near future, the risk of course being that the levy rates will again, inevitably, increase in the years ahead.

For all the above reasons, we are not for the moment overly concerned that the Government is heading in a new direction when it comes to gambling reform. This is not a policy area where the new Government might argue that it was left a “black hole”, quite the reverse, it was left a fully-fledged policy developed over many years and wrapped in White Paper, which it would be well advised to adopt and move on with other legislative priorities free from gambling distractions. Nothing has happened this week which was not expected and we remain optimistic that the delicate balance of the White Paper will be delivered by the Government and the Gambling Commission in the year ahead. We will of course continue to monitor for any departure from that course in future blogs.

With thanks to Ting Fung for her invaluable co-authorship.