09Nov

Unlicensed gambling – growing threat or exaggerated myth?

9th November 2023 Gemma Boore 147

Earlier this month, Andrew Rhodes, the Chief Executive Officer and Commissioner of the Gambling Commission, took part in a two-part podcast discussion with The Gambling Files to reflect on and discuss topical issues affecting the gambling industry. Amongst the subject matter covered, Rhodes touched in Part 2: HE REVEALS MORE! on black market activity and the steps the Gambling Commission is taking to disrupt illegal gambling in Great Britain – which Rhodes claims to have resulted in significant drops in traffic to illegal operators.

This reflected themes in Rhodes’ keynote speech at the International Association of Gambling Regulators (“IAGR”) conference in Botswana on 16 October 2023, in which he noted whilst illegal online gambling market exists in Great Britain, as it does elsewhere:

“it is not a significant concern and this position hasn’t fundamentally changed. However, that does not mean there is no illegal market or no risk”.

In other news, Lucy Frazer, the Secretary of State for Culture, Media and Sport recently digested the contents of a letter from eight UK horseracing industry leaders. In the letter, the signatories reportedly warned that affordability checks, which the Government recommended be introduced in the Gambling White Paper, will cost racing £250 million in funding over the next five years and that this would be a disaster for British horseracing as punters either walk away from the sport or turn to the black market to gamble.

Potentially to back up this claim, the Racing Post then published the results of its “The Right to Bet” survey, which found that (1) one in four of the respondents would be prepared to switch to the black market if faced with stringent affordability checks; and (2) nearly one in ten have already used black market betting sites.

A petition was then posted on the UK Government and Parliament website, calling for the Government to abandon the planned implementation of affordability checks because “more intrusive checks triggered at a higher threshold risks bettors moving to the black market where there are no consumer protection or safer gambling tools”. This petition has – as at the time of writing – accumulated 76,204 signatures, three quarters of the number needed to trigger a debate in Parliament.

So, is the black market really a growing threat, or an exaggerated distraction? What are the Gambling Commission and the Government doing to curb illegal gambling? And what can businesses do if their proprietary content (intellectual property (“IP”)) turns up on unlicensed sites?

Read on for our discussion along with a helpful checklist for licensees that receive communications from the Gambling Commission regarding black market activity.

What is black market gambling?

The term ‘black market’ gained popularity during World War II (when common household products were rationed to avoid hoarding) and generally refers to an illegitimate market in which commodities are being traded, exchanged or performed in an illegal manner.

With regard to modern gambling in Britain, section 33 of the Gambling Act 2005 (as amended) (the “2005 Act”) makes it clear that it is an offence to provide facilities for gambling to customers in Great Britain from anywhere in the world, without holding a licence from the Gambling Commission unless a relevant exemption applies. Accordingly, it is common within the industry to refer to unlicensed online operators that illegally provide facilities for gambling to customers in Great Britain, without the appropriate licence or falling under a relevant exemption, as the “black market”.

Why is unlicensed gambling bad?

As Rhodes notes in his keynote speech at the IAGR conference, every gambling jurisdiction in the world has illegal online gambling:

“Whether online gambling is prohibited or not, if you can access the internet, then you will be able to find a way to gamble. We all know this. It’s also worth pointing out at this point that what is an illegal, unlicenced operator for me in Great Britain may be a legitimate, licensed business for you and vice versa.”

From a consumer perspective, one of the fundamental problems is that black market websites are not always distinguishable from those that are locally licensed – at least to the untrained eye. This means a consumer may be gambling on an illegal gambling site without even knowing it and, in this “Wild West” of the remote sector, unlicensed operators are not constrained by regulation. It is common to see consumer reports of problems, such as the inability to withdraw funds and difficulties contacting support in the event of a complaint. Indeed, Rhodes acknowledged in The Gambling Files podcast, that recent research has shown that illegal websites actively seek to advertise to people that have self-excluded from gambling on GAMSTOP and others allow unlawful activity in itself by, for example, allowing children to gamble.

So, what is the Gambling Commission doing?

One of the Gambling Commission’s key functions is to investigate and prosecute illegal gambling and other offences committed under the 2005 Act. As Rhodes noted in his IAGR keynote speech, the Gambling Commission typically deploys an “intelligence-led approach” to combat black market operators.

This means that ordinarily, they will initially issue a cease-and-desist letter to require the unlicensed operator to suspend their operations. Failing this, the Gambling Commission will implement “disruption techniques, using its partnerships or relationships with other companies”, which can include:

asking web hosting companies to suspend or ‘block’ British consumers from accessing the websites;
contacting payment providers to remove payment services;
liaising with internet search and service providers to prevent websites appearing on search engines;
working with social media firms to take down posts which promote illegal gambling; and
engaging with international regulators, including by sharing information and raising the prominence of the issue – and Rhodes used the keynote as an opportunity to call for collaboration in this regard.

In addition, Rhodes described in his speech more novel steps that the Gambling Commission is taking to disrupt unlicensed, illegal online operators through collaboration with others:

“…this means we’ve been going further upstream, further away from where our formal powers begin and have been looking to work with others to get between those illegal operators and British consumers and generally frustrate their business and force them out of our market.”

And this has included:

working with software licensees to prevent access to popular products when their games appear to be available on illegal sites; and

engaging with licensees if we discover their affiliates have placed adverts on illegal sites – ensuring licensees remove advertising and encouraging an assessment of business relationships with these affiliates.

By taking these steps, Rhodes claimed that the Gambling Commission has “increased… enforcement actions by over 500 percent between 2021-22 and 2022-23” and “more than doubled the number of successful positive disruption outcomes” leading to a “a 46 percent reduction in traffic to the largest illegal sites coming into market”.

Notwithstanding the bountiful fruit of its recent efforts, the Gambling Commission has always acknowledged that stronger measures are required. In its Advice to Government relating to its review of the 2005 Act, the Gambling Commission explains that:

“Under our current framework, we cannot compel third party providers to take action such as to block British access to the website, remove payment services or prevent websites from appearing in search engines. Moving to criminal prosecution has had limited effect, largely because websites can immediately disappear and reappear with a different identity (a phenomenon known as ‘phoenixing’), and their ultimate owners and lines of responsibility are very difficult to fully trace. This also makes it very difficult to accurately scope the size of the black market”.

How does this play into the White Paper?

Before it was even published, the black market was the backbone of many highly politicised debates concerning the White Paper and the proposals to be made therein. Affordability (and more specifically, mandatory deposit and/or loss limits) in particular, led to outcry from the sector and various interested parties commissioned research to try to truly gauge the extent of illegal, unlicensed gambling in Great Britain.

In particular, a 2021 PwC report entitled “Review of unlicensed online gambling in the UK” commissioned by the Betting and Gaming Council, claimed that the proportion of UK online gamblers using unlicensed operators in November 2020 had increased to 4.5 per cent – or around 460,000 people – from 2.2 per cent over the previous one to two years. In addition, the study found that stakes with unlicensed operators had doubled to £2.8 billion.

Neil McArthur, the then Chief Executive of the Gambling Commission, poured cold water on the PwC report in a letter to cross-party MPs investigating the harmful effects of gambling, reportedly stating it was “not consistent with the intelligence picture” and that the impact of the black market “may be being exaggerated“.

When the White Paper was finally published in April 2023 – some 30 months after the call for evidence – it was broadly accepted to be balanced and evidence-led. Chapter 3, which considered the potential for reform in the Gambling Commission’s powers and resources, outlined the Government’s views on black market gambling and whether it presented a tangible risk. Specifically, the Government acknowledged that although estimating the size of the black market is difficult, it was clear that “excessive commercial caution risks driving customers to the black market where they can be exposed to a variety of risks”. The Government further noted that there has been a rise of illegal operators in other jurisdictions with:

“either extremely permissive regulatory regimes or no regulatory oversight, and/or are being run by individuals with suspected links to serious and organised crime.”

It then went on to acknowledge the Gambling Commission’s disruptive approach was working well to an extent (a statement with which we agree), but recommended that the Gambling Commission’s powers to action be strengthened to create a safety net, giving the Gambling Commission the versatility to “apply to court as a last resort” if required:

“When Parliamentary time allows, we will introduce legislation that will give the Gambling Commission the power to apply to the court for an order that requires ISPs , payment providers and other providers of “ancillary services” to implement measures aimed at disrupting the business of an illegal gambling operator”.

While a laudable aim, changes to legislation take time and given other legislative pressures and the impending General Election, it is not clear when these changes will take effect – there certainly was no mention of such a bill in The King’s Speech on 7 November 2023. This contrasts with affordability checks (which the White Paper recommends become mandatory for operators to carry out when consumers reach specific loss thresholds), which have already been subject to a public consultation by the Gambling Commission and may take effect much sooner.

Lessons for licensed operators

For the meantime, Rhodes emphasised in his keynote that the Gambling Commission will continue to use its existing powers (and authority) to tackle illegally, unlicensed gambling. As noted earlier, this may include the Gambling Commission contacting its own licensees to try to persuade them to take steps to disrupt illegal gambling.

If you hold a British licence and are contacted by the Gambling Commission about a black market website, we recommend that you take professional advice. You may also want to consider taking one or more of the following steps:

verify that your content is being used / your adverts are being placed on an illegal website. Involve your tech teams as they should be able to confirm whether the content is legitimate or an infringing copy of your IP;

check that games / links are accessible in Great Britain and if they are, whether you receive any British traffic from the site in question;

identify the operator of the website and/or the affiliate that is placing advertisements on the illegal site;

consider whether you have a contractual relationship with the operator / affiliate or any member of its group. If you do not have a direct contract with the operator/ affiliate or one of its group companies, consider whether there may be an indirect relationship (for example, via a content distributor or affiliate program);

if a contractual relationship exists, investigate how this arose and review all due diligence you conducted on the third party/ies during the contractual relationship;

send a cease-and-desist letter (takedown notice) to all entities that you can identify as being involved; cite restrictions in your contract (if relevant);

if the third party does not cease the activity or justify their actions:

terminate any contracts with them promptly. Note that inclusion of such a termination right is a requirement under Social Responsibility Code Provision 1.1.2 of the Licence Conditions and Codes of Practice;

consider contacting third parties such as hosting providers, domain registrars and third-party search engine such as Google who may otherwise be able to stop the website being accessible by customers in Great Britain;

engage professionals to review:

your systems and processes for identifying use of your content / placement of your ads on illegal websites; and

your standard contracts,

to mitigate the risk that your IP rights are exploited illegally in the future; and

update the Gambling Commission within the deadline they have set on the outcome of your investigation and the steps you have taken to:

address the present infringement of your IP rights; and

mitigate the risk of a similar situation occurring again.

Please get in touch with us if you would like assistance responding to a Gambling Commission request, or if would like to discuss the themes in this blog more generally.

07Nov

Personal management licensee: What do you need to know?

7th November 2023 Chris Biggs 151

Individuals who hold a personal management licence (“PML”) issued by the Gambling Commission undoubtedly play the most important role in ensuring business decisions are underpinned by the licensing objectives, building a strong foundation of compliance and raising standards. Ultimately, they are personally accountable and responsible for compliance failings. As personal licensees, PMLs can face enforcement action by the Gambling Commission. We expect to see more enforcement action taken against PMLs on the basis that people make decisions, not businesses.

The White Paper included a proposal to extend the requirement to hold a PML, set out in licence condition 1.2.1 of the Licence conditions and codes of practice (“LCCP”), with the goal to drive “personal accountability and responsibility”, allowing the Gambling Commission to “take necessary action against individual (personal) licensees when failures are found”. In our previous blog, we discussed who (currently) needs to hold a PML, how PMLs drive corporate culture, the Gambling Commission’s proposed changes to PML requirements following the White Paper and the reasons for those potential changes.

With the spotlight on PMLs, in this blog we provide an overview of PML requirements and our top pointers for staying compliant.

PML requirements

One of the key challenges for PMLs is that, unlike many other regulated professions, there are no standards of: (a) conduct, performance and ethics; or (b) competence, which set out the minimum requirements. Instead, the PML regime is based on broad principles as detailed below. It is worth noting that if the Gambling Commission commences a licence review against a PML, it will be based on the PML’s failure to comply with the following licence conditions and/or expectations:

Licence conditions

There are three licence conditions attached to PMLs, set out in Part 3 of the LCCP, summarised as follows:

Licence condition 1: PMLs “must take all reasonable steps” when carrying out their responsibilities in relation to licensed activities to ensure they do not place their employer’s operating or premises licence in breach of their licence conditions. This is evidently broadly drafted and widely interpreted by the Gambling Commission.
Licence condition 2: PMLs must keep themselves informed of “developments in gambling legislation, codes of practice and any Commission guidance … relevant to their role”.
Licence condition 3: PMLs must report key events (see below) within 10 working days of becoming aware of the event’s occurrence.

“Expectations”

Additionally, section 4.3 of the Gambling Commission’s Statement of principles for licensing and regulation sets out the expectations of individuals occupying senior positions, whether or not they hold PMLs, to (amongst other things):

uphold the licensing objectives and ensure compliance of operations with the LCCP;
organise and control their affairs responsibly and effectively;
have adequate systems and controls to keep gambling fair and safe;
conduct their business with integrity;
act with due care, skill and diligence;
manage conflicts of interest fairly;
work with the Gambling Commission in an open and cooperative way;
disclose to the Gambling Commission anything which it would reasonably expect to know; and
comply with both the letter and spirit of their licence, the licence of their operator and associated Gambling Commission regulations.

PML key events

As set out in licence condition 3, PMLs are required to notify the Gambling Commission of the occurrence of certain key events, “within 10 working days after the licensee becomes aware of the event’s occurrence”. These are:

a change in name (for example, following marriage);
a change in address;
any current or pending investigation by a professional, statutory, regulatory or government body in Great Britain or abroad, and the imposition of any sanction or penalty against them following such an investigation (this would include another gambling regulator);
being subject to (a) any criminal investigation, or (b) conviction of any offence, listed under Schedule 7 – Relevant Offences of the Gambling Act 2005;
the imposition of a disciplinary sanction against them, including dismissal, for gross misconduct;
resignation from a position for which a PML is required following commencement of disciplinary proceedings in respect of gross misconduct;
disqualification from acting as a company director; and
the presentation of a petition for their bankruptcy or sequestration or their entering into an individual voluntary agreement.

Further guidance to PMLs about personal key events can be found here.

Online service and contact details

PMLs must ensure their registered contact details are accurate. In addition to this being a licence condition, it will ensure critical correspondence is not missed, including relating to any revocation (generally, for failure to undergo PML maintenance) or licence review.

When granted, we strongly encourage PMLs to register for the Gambling Commission’s Manage your personal licence online service for PMLs. This service allows PMLs to update contact details, submit key events and submit maintenance checks (see below).

PMLs:

must – personally – keep their registered email address up to date; and
should ensure the Gambling Commission’s email domain is trusted, to avoid emails going to junk or spam folders.

PML maintenance

PMLs are indefinite in duration, meaning that the licence does not renew or lapse.

PMLs are subject to a mandatory maintenance check every five years. This is an automatic process (not an application, as the Gambling Commission incorrectly describes it), the purpose of which is solely the provision of updated information about the PML, such as current address and position, and payment of the fee. It is for the Gambling Commission simply to check and record the information. As we have written previously, the Gambling Commission is not legally empowered to delay or put on hold PML maintenance on the misconceived ground that enforcement action is ongoing or imminent.

The Gambling Commission will contact PMLs by email to advise of the upcoming PML maintenance. We recommend that PMLs and any supporting compliance/licensing teams separately diarise the five-year anniversary. A failure to submit the PML maintenance check will result in the PML being revoked.

To complete the check, PMLs need to sign into the online service. PMLs cannot submit the maintenance check before the PML anniversary date, and have only 30 days from the anniversary date to submit the check. Upon submission, a fee of £370 needs to be paid.

At the time of writing, if a check is not submitted within 30 days, the Gambling Commission will send a notice of revocation by email, providing a further 28 days from this notice to complete the maintenance check, otherwise the PML will be revoked.

Tips for PMLs

Keep contact details up to date;
Ensure the “gamblingcommission.gov.uk” email domain is whitelisted;
Register for the online service;
Understand the meaning of a key event, including changes of name or address and criminal investigations (without charges);
Understand the PML licence conditions and expectations;
Document structured and unstructured training; and
Diarise the five-year maintenance check.

Tips for employers

Remind PMLs to provide personal contact details (i.e. not a work email address) to the Gambling Commission upon or shortly before departure from the business;
Provide or arrange for annual refresher training to be provided for PMLs on PML licence conditions and expectations (we can help with this!);
Keep a record of internal and external training provided to PMLs;
Diarise each PML’s five-year maintenance check for both the business and the PML;
If a PML leaves or changes roles within the business and they held a specified management office, the business needs to notify the Gambling Commission as soon as reasonably practicable, and in any event within five working days of the PML’s departure under the operating licence condition 15.2.1(4); and
Remind the PML to notify the Gambling Commission of their departure if they leave the business and update their contact details, if required.

Please get in touch if you have any questions or would like to discuss your training needs.

01Nov

Gambling Commission appoints new Commissioners

1st November 2023 Adam Russell 137

On 31 October 2023, the Department for Digital, Culture, Media and Sport (“DCMS”) announced the Secretary of State had appointed seven new independent Commissioners to the Gambling Commission, taking effect from 11 September 2023. Charles Counsell, Helen Dodds, Sheree Howard and Claudia Mortimore have been appointed for terms of five years. Lloydette Bai-Marrow, Helen Phillips and David Rossington have been appointed for terms of four years. Together with the existing Commissioners and Chair, Marcus Boyle, they form the Gambling Commission’s Board of Commissioners (the “Board”).

Appointment process

Earlier this year, DCMS advertised to fill six Commissioner vacancies, to include three appointees with expert experience in one of: consumer protection and insight; data science and digital innovation; and law enforcement. In the end, seven Commissioners were appointed rather than the advertised six.

The Gambling Commission’s job advert made clear that the Commissioners will have responsibility for:

Ensuring that the Gambling Commission fulfils its statutory objectives and duties;
Ensuring that any statutory or administrative requirements for the use of public funds are complied with;
Setting the overarching strategy for the organisation and making strategically significant decisions;
Setting organisational risk appetite and ensuring a framework for effective identification and mitigation of top risks;
Ensuring that the Board receives and reviews regular information and data concerning the management of the Gambling Commission;
Setting the overarching stakeholder engagement strategy;
Demonstrating high standards of corporate governance at all times.

Meanwhile, the job advert outlined the following essential criteria:

An understanding of the policy and/or legislative environment within which a regulator such as the Gambling Commission operates;
Evidence of working as part of a team towards a shared goal, including ability to make a strong personal contribution;
The ability to analyse complex material and take well-reasoned decisions;
A commitment to improving opportunities for people throughout the UK and access to people from a diverse range of backgrounds.

Various desirable criteria were also set out, including corporate experience in a regulated sector, regulatory experience and experience supporting organisational change (amongst others).

Seven new Commissioners

Both DCMS and the Gambling Commission have published biographies for the new Commissioners and we welcome the strong focus on equality, diversity and inclusion in addition to other relevant experience. We also welcome the appointments, particularly the diverse backgrounds including in commerce and other regulated industries (including law!), and hope that the Commissioners will support and build on the Gambling Commission’s recent efforts to improve relations with industry, acknowledging that better relationships lead to better and quicker regulatory outcomes.

Whilst not intended to be an exhaustive summary, an overview of each Commissioner’s biography is detailed below:

Lloydette Bai-Marrow is an anti-corruption expert and economic crime lawyer. She is the Founding Partner of Parametric Global Consulting, the Chair of the Board of Spotlight on Corruption and sits on the Legal Panel for Whistleblowers UK. She is also a trustee for the Unite Foundation, and a Member of the Conduct Committee of the Institute of Chartered Accountants in England and Wales. Lloydette is also a Co-Founder and Director of the Black Women in Leadership Network.
Charles Counsell OBE was the Chief Executive Officer of The Pensions Regulator from April 2019 to March 2023. Before this, he was the Chief Executive Officer of the Money Advice Service and Executive Director of Automatic Enrolment at The Pensions Regulator.
Helen Dodds OStJ is an international lawyer, consultant and board member. She is currently a board member of the Human Tissue Authority, a director and trustee of the St John’s Eye Hospital Group, a director of LegalUK, and an Honorary Senior Fellow of the British Institute of International and Comparative Law. Previously, she was a board member of the London Court of International Arbitration.
Sheree Howard has over 25 years’ experience of the UK financial services industry with knowledge of the process of regulation and a focus on risk management, audit and controls. She is currently the Executive Director of Risk and Compliance at the Financial Conduct Authority, and is a Fellow of the Institute and Faculty of Actuaries. She has also held senior positions in banking in areas of risk and compliance including at the Royal Bank of Scotland and Direct Line Group.
Claudia Mortimore has over 25 years’ experience of criminal law and regulation. After accumulating 10 years of experience as a barrister, she prosecuted drugs, tax and money-laundering offences for the Revenue and Customs Prosecutions Office and fraudulent trading offences for the Department of Business. She has also held senior positions in the Enforcement Division of the Financial Reporting Council.
Helen Phillips is an experienced executive and non-executive, with a career underpinning the public, private and not-for-profit sectors. Helen is currently appointed in a non-executive capacity as the Chair of NHS Professionals Ltd and Chair of the Chartered Insurance Institute. She is also concluding a nine-year term as Chair of Chesterfield Royal Hospital NHS Foundation Trust. Helen has also held various other positions within social work, education and environmental organisations.
David Rossington CB is a former senior civil expert. He has worked for the Department for Culture, Media and Sport as Finance Director and acting Director General. He has also worked for other Government departments including what is now the Department for Levelling Up, Housing and Communities.

Remuneration and Governance Code

The DCMS’ website confirms that Commissioners are remunerated at £14,160 per year (£295 per day) plus expenses, and that the seven appointments were duly made in accordance with the Cabinet Office’s Governance Code on Public Appointments (“the Governance Code”). The Governance Code requires the declaration of any significant political activity undertaken by an appointee in the last five years (e.g. holding office, public speaking, making a recordable donation or candidature for election); none of the appointees declared any significant political activity.

31Oct

Revised remote customer interaction guidance comes into effect

31st October 2023 David Whyte 156

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

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

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

Key considerations

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

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

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

Consideration 2: Document your decision-making processes

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

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

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

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

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

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

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

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

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

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

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

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

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

Consideration 7: Do not overlook evaluation

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

Next steps

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

27Oct

Regulatory returns update: Gambling Commission conducting user research sessions

27th October 2023 Chris Biggs 143

In its fortnightly E-bulletin released earlier this week, the Gambling Commission called for licensees to sign up to its User research programme for the purpose of participating in upcoming regulatory returns user research sessions.

As we previously discussed, the Gambling Commission has recently signalled its intention to “sharpen” the dataset currently received from licensees in regulatory returns, increase the frequency of the reporting requirements and aligning licensees’ reporting dates (see its Making better use of operator data blog), which are proposals we very much welcome. The Gambling Commission also indicated that there would be a consultation on the frequency of regulatory returns in November.

User research programme

The user research programme, which is an initiative we welcome, has been introduced to help the Gambling Commission “test new services, websites and features with people who use them” and sessions can take place face-to-face, over the phone or remotely.

Getting involved may include:

responding to questionnaires: 5-10 minutes;
telephone or video call session: 60 minutes;
face-to-face session: 60 minutes; or
workshop: half a day.

You can register as a participant of the Gambling Commission’s user research programme here.

Registration takes approximately two minutes, whereby you will be required to provide your full name and answer general questions pertaining to your involvement in the gambling industry and use of the Gambling Commission’s services. This information will be used to select suitable participants for the regulatory returns sessions, as well as other research sessions.

Regulatory returns user research sessions

The regulatory returns user research sessions will, as the Gambling Commission states, help it “improve the data, while reducing the burden for operators”. The Gambling Commission has asked that a diverse range of licensees from all sectors sign up to the programme, as it will be hosting a series of workshops on the topic with the aim of producing “a more focused dataset”.

The Gambling Commission has not given further details about the regulatory returns user research sessions, nor an indication of when these sessions will be held. We expect that these sessions will take place very soon to inform the Gambling Commission’s consultation on regulatory returns, which we expect in November 2023.

Why participate?

As we discussed previously, in looking to update the regulatory returns system, the Gambling Commission has the opportunity to refocus its dataset and provide clarity and further guidance on the system. Doing so will ensure the evidence it collects from licensees is accurate and therefore useful. It is equally important to ensure the system is fit for purpose and there is consistency in the responses provided.

We encourage licensees and other relevant industry stakeholders to sign up and participate in the regulatory returns user research sessions, and to provide feedback to the Gambling Commission.

Please get in contact with us if you have any questions about the regulatory returns process.

26Oct

Andrew Rhodes’ speech at the International Association of Gambling Regulators Conference: A call for collaboration

26th October 2023 Adam Russell 160

The current Chief Executive Officer (“CEO”) of the Gambling Commission, Andrew Rhodes, delivered a keynote speech at the International Association of Gambling Regulators (“IAGR”) Conference in Botswana on 16 October 2023. In this blog, we sum up the key messages from Rhodes’ speech, which was delivered to gambling regulators from across the world. Part One outlines Rhodes’s commentary on implementation of the UK Government’s Gambling White Paper, and Part Two summarises what was said regarding the Gambling Commission’s increasingly innovative approach to tackling black market gambling.

Part One: The White Paper

Background

Rhodes introduced the White Paper by stating that the Gambling Commission is “pleased to see so many of recommendations adopted”. He proceeded to describe “the publication of the White Paper an important moment”, citing the need to update the gambling regulatory framework with “evidence-based changes” to keep pace with digitisation in society.

Priorities

Rhodes acknowledged that “the White Paper is a key priority for the Commission”. However, he managed expectations by stating that “this will not be the work of a few months” given that the “Gambling Commission is either leading or supporting on the implementation of Government policy” in relation to “over 60 areas of work”. Rhodes then distinguished between priorities for the Government versus priorities for the Gambling Commission, the latter of which included to:

“ensure bonus offers and incentives do not lead to excessive or harmful gambling,
set further product controls for safer online games,
require operators to identify and take action for financially vulnerable consumers and to tackle significant unaffordable gambling through frictionless checks that are not disruptive for consumers.”

Rhodes noted that some of these themes would be common to all regulators at the conference and that while “attitudes, politics, regulatory frameworks and so on may be quite different”, human behaviour is similar cross-jurisdictionally, which may lead to “some commonality in the way approach these areas”.

Prior and upcoming consultations

Rhodes confirmed that the Gambling Commission has received “over 2,300” responses to its first round of White Paper consultations and that those responses “can and will help us improve the changes we make to our rules and to how gambling is regulated in Great Britain”. He considered, however that there have “been some misunderstandings” in relation to financial risk checks, some of which he put down to the complexity of the issue the Gambling Commission is facing. However, according to Rhodes, in other cases, misunderstandings have arisen as a result of “deliberate misinformation designed to muddy the waters of debate and to torpedo the implementation of Government policy.” This is potentially (we think) a not-so-subtle reference to the open letter to Racing Post readers published in September 2023, in which the Gambling Commission complained that the Racing Post has been writing imbalanced stories about the financial risk consultation.

Rhodes went on to confirm that progress is underway on launching “the next tranche of consultations”, which will initially include:

socially responsible incentives (such as bonuses and free bets), and
gambling management tools (including online deposit limits and opt-outs),

with further consultations to follow in 2024.

Gambling data and the evidence base

Rhodes noted that besides consultations, the Gambling Commission is “leading on” improvements to “gambling data” and “the evidence base”. He mentioned that the Gambling Survey of Great Britain will launch early next year. It is set to be the “largest survey of its type” worldwide and attract around 20,000 respondents annually.

He proceeded to outline the “inherent conflict” in relation to the use of problem gambling data, particularly in the context of polarised debate. Rhodes noted that some may seek to cite a low problem gambling rate of between 0.3 percent and 0.5 percent of the population, at the same time as arguing that the same “sometimes limited” sample sizes create “insufficient evidence to support intervention in areas of higher risk”. Although this is contradictory, Rhodes acknowledged that the evidence base requires improvement and promised that the Gambling Survey of Great Britain would help to achieve this – with updated questions for the digital age and “predictable, regular data” for study.

With regard to the broader evidence base, Rhodes reiterated the six priority objectives which were set out in the Gambling Commission’s three-year evidence gaps paper, namely:

early gambling experiences and gateway products;
the range and variability of gambling experiences;
gambling-related harms and vulnerability;
the impact of operator practices;
product characteristics and risk; and
illegal gambling and crime.

Part Two: The black market

Background

In the second half of the speech, Rhodes explained that the Gambling Commission has been taking an increasingly robust approach towards the black market. As above, the tackling of illegal gambling is a priority area of the Commission’s three-year evidence gaps paper, published in May 2023. Rhodes emphasised that while the black market is an issue, it “is not a significant concern” due to the high rate of channelisation. Channelisation refers to the proportion of consumers who gamble in the licensed market in comparison to the illegal market.

Actions

Rhodes outlined some of the actions that the Gambling Commission has been taking to “disrupt unlicenced , illegal online operators through collaboration with others”, which has broadly involved “going upstream, further away from where formal powers begin”. This means working with others to intervene between illegal operators and British customers to “generally frustrate their business and force them out of the market”.

Rhodes gave examples of what this work entails:

increasing engagement with payment providers and financial institutions,
collaborating with internet search and service providers to delist illegal operators from search results and geo-block their websites,
working with social media companies to remove posts which promote illegal gambling,
cooperating with Gambling Commission software licensees to prevent access to products which appear to be available on illegal sites, and
engaging with Gambling Commission licensees where affiliates have placed adverts on illegal websites.

Results

Rhodes revealed that the Gambling Commission’s combative approach has:

“more than doubled the number of successful positive distribution outcomes”
“close down hundreds of illegal lotteries”
“stop influencers promoting unlicensed gambling.

Further, between May and July, Rhodes explained that geo-blocking had restricted access to four of the top 10 illegal domains, and there was a 46 percent reduction in traffic to the largest illegal sites.

The Gambling Commission also “block 17 sites from Google search results through collaboration with Google, and “remov payment facilities from illegal sites” through their work with Mastercard.

Next steps

Rhodes pledged to “continue to study the impact of interventions and respond accordingly”, and to “deepen collaboration with partners in industry, tech and finance” to further strengthen their disruptive capabilities.

Moreover, Rhodes revealed that the Gambling Commission would be holding a Conference in March 2024 to explore “how can work with partners to further decay, frustrate and drive out illegal gambling”.

Rhodes reflected that “strong collaboration with others”, including with other regulators, has been crucial to the results the Gambling Commission’s disruptive enforcement work has yielded so far. However, he wants to see further collaboration take place and urged other regulators to join him in forging and strengthening relationships.

Reflection

This is Rhodes’ second time speaking at the IAGR conference. His last speech, delivered in Melbourne in October 2022 at a time when the White Paper was still pending, appealed for gambling regulators to work better together; share data and evidence; adopt common approaches; and coordinate actions where possible.

This year, Rhodes recognised the role that collaboration has had in successful outcomes during the last year, including in relation to tackling illegal online operators, and reiterated his call for overseas regulators to “share notes” with the Gambling Commission on gambling operators that trade globally.

Rhodes also emphasised that the Gambling Commission is “more than ready to work with ” – referring to a recent roundtable with nine US and Canadian jurisdictions as an example of the Gambling Commission “establish clear working relationships that will support all of us to be more effective”.

At the conclusion of the conference, IAGR members elected Ben Haden of the Gambling Commission as their new president. Mr Haden takes over the presidency from Jason Lane, the Chief Executive of the Jersey Gambling Commission.

Next steps

Please get in touch if you would like to discuss any aspect of this speech or if we can otherwise assist you. You can find out more about the services Harris Hagan provides here.

This blog has been written on the basis of the published version of Rhodes’ keynote speech available here, which may differ slightly from the delivered version.

19Oct

Gambling Commission reminder to licensees about timely payment of annual fees

19th October 2023 Chris Biggs 145

In its fortnightly E-bulletin of 25 September 2023, the Gambling Commission included two reminders to operating licence holders (“Licensees”). Firstly, about the requirement that they pay their annual fee before the anniversary date of their operating licence and secondly, that it is a condition of the licence that the gross gambling yield (“GGY”) does not exceed the fee category threshold of that licence.

Payment of annual fees

Requirement

Following the Gambling Commission’s grant of an operating licence, Licensees must pay their first annual fee within 30 days of the Gambling Commission issuing their licence. Licensees are then required to pay their subsequent annual fees each year before the anniversary date of their operating licence being issued (section 100(1) of the Gambling Act 2005 (“2005 Act”)).

Failure to make payment on time

The Gambling Commission is required by the 2005 Act to revoke an operating licence in the event of a Licensee’s failure to pay its annual fee before the licence anniversary (section 119(3) of the 2005 Act). However, the 2005 Act permits the Gambling Commission to disapply this requirement, if is satisfied that the Licensee’s failure to pay its annual fee is due to an administrative error. It is of note that there is no requirement that the Gambling Commission commence a licence review before revoking an operating licence for non-payment of the annual fee.

How to make payment

The Gambling Commission will issue an invoice to Licensees six weeks before the annual fee is payable. The invoice can also be found on each Licensee’s Gambling Commission eServices account, through which payment of the invoice can be made.

Annual fees are not refundable by the Gambling Commission, unless an overpayment has been made. For example, no refund would be given if a licence is surrendered the day after the licence anniversary date.

We recommend that Licensees diarise their own reminders, well in advance of the licence anniversary, to ensure the timely payment of annual fees.

Fee categories

It is condition of an operating licence that the gross gambling yield (“GGY”) (or annual gross sales for gambling software licences) does not exceed the upper threshold of the fee category for each licensable activity.

Licensees must therefore monitor their projected GGY or annual gross sales in line with their fee categories, which are displayed on their operating licence. It is of note that fee category thresholds follow the licence anniversary year and not the reporting year (which is stipulated by regulatory returns).

Licensees must apply to vary their operating licence to increase the fee category of a licensed activity before exceeding the upper threshold to avoid breaching the licence condition. Failure to do so may lead to regulatory action. The application to vary can be submitted through eServices, carries an application fee of £40, and must be granted by the Gambling Commission before the licence anniversary date. Licensees who have already exceeded the GGY threshold must regularise the position by submitting an application to vary immediately.

Next Steps

We encourage Licensees to set reminders to pay annual fees, and to ensure the accuracy of their licence fee categories. Further information can be found in the Gambling Commission’s annual fees guidance.

Please get in contact with us if you have any questions about your annual fees and/or fee categories.

13Oct

Gambling Commission speech at G2E 2023: Growing importance of international collaboration

13th October 2023 Chris Biggs 163

Tim Miller, the Gambling Commission’s Executive Director for Policy and Research and Senior Responsible Owner for the White Paper, delivered a speech at the Global Gaming Expo (“G2E”) in Las Vegas on 10 October 2023. In his speech, Mr Miller discussed (1) the “growing importance” of international collaboration with other gambling regulators, (2) how this is assisting in tackling illegal online gambling and (3) the progress of the White Paper and changes to the law and regulations in Great Britain, which remains the largest licensed online gambling market in the world.

This blog, whilst not intended to be a comprehensive overview, will summarise those three key themes from Mr Miller’s speech.

Growing importance of international collaboration

Mr Miller stated that gambling is a global industry and that leading operators and suppliers are now (mostly) multi-national businesses. The Gambling Commission’s motivation to collaborate with international regulators has been piqued, as it witnesses more large British or European operators seek to establish themselves in North American jurisdictions. Indeed, Mr Miller declared:

“Increasingly we regulate the same companies; we address the same risks; we face the same challenges.”

In an effort to provide clarity about what the Gambling Commission means by strengthening its relationships with other regulators abroad, Mr Miller explained that the Gambling Commission continues to look to support new regulators in burgeoning jurisdictions and learn from their experiences, suggesting:

“The more gambling regulators know of each other’s rules, standards and markets, the more we are sharing information and best practice, the more we support each other then the more effective we will be.”

Consistent with the Gambling Commission’s tough stance on compliance and enforcement (indeed, Mr Miller mentioned the Gambling Commission broke its own record for “the largest ever settlement” twice in the last financial year), Mr Miller also gave a clear warning for licensees who are non-compliant in one jurisdiction not to be surprised if they are “the subject of regulatory conversation in other jurisdictions.”

Further collaborative efforts mentioned by Mr Miller include:

He, alongside the Gambling Commission’s Chair, Marcus Boyle, hosted a roundtable discussion at G2E with North American regulators on the practical steps the Gambling Commission will take to enhance regulatory collaboration;
the Gambling Commission is close to concluding a number of Memoranda of Understanding with US regulators, which look to establish clear working relationships with those regulators; and
the Gambling Commission continues to build stronger links between the North American Gaming Regulators Association and the Gambling Regulators European Forum.

Collaboration improving the combat against illegal online gambling

Mr Miller used illegal online gambling as an example of why international collaboration is important: what is illegal in one jurisdiction may not be in another, and some jurisdictions do not regulate online gambling at all. The key point made here is, as Mr Miller states, “legitimate, licensed operators from one jurisdiction can actually be the illegal or black market in another.” Tackling illegal online gambling is therefore a particular focus of the Gambling Commission and one which it relies on international collaboration to deliver greater results in making gambling safer, fairer and crime-free.

In terms of results, Mr Miller announced that by engaging and collaborating with payment providers, internet search providers and product and game developers, the Gambling Commission has delivered a 46% reduction in traffic to the “largest illegal sites coming into market.” Notably, Mr Miller indicated that the Gambling Commission’s Chief Executive, Andrew Rhodes, will be providing further information on this topic in a speech at next week’s International Association of Gambling Regulators conference.

Lastly, Mr Miller explained that the Gambling Commission continues to hold discussions with regulators in Europe and as far away as Australia to improve its response to illegal online gambling and influence on those outside of the gambling industry, declaring:

“The collective voice of gambling regulators across the globe pressuring big tech companies, banks and even some other jurisdictions to address the role they play in facilitating illegal gambling, will be much harder to ignore.”

Update on Great Britain’s changing regulations

Referring to the Gambling Commission’s first consultation following the White Paper released on 26 July 2023, Mr Miller indicated that the Gambling Commission has already received “thousands” of responses to these consultations. We strongly encourage stakeholders within the industry to respond to this consultation before it closes shortly on 18 October 2023.

Additionally, Mr Miller indicated there has been progress with the GamProtect project, which grew out of the Gambling Commission’s challenge to the gambling industry to produce a holistic view of risk of harm, known as the Single Customer View. Mr Miller indicated that the Gambling Commission has been working with the Betting and Gaming Council and the Information Commissioner to set up a pilot for this project and ensure the data gathered will only be used to protect people from harm.

Lastly, Mr Miller indicated that the Gambling Commission is finalising its new methodology for the collection of Participation and Prevalence data as part of the Gambling Survey of Great Britain. The Gambling Commission expects this survey (1) to have 20,000 respondents per year, (2) will be the “largest of its kind in the world when up and running”, and (3) will become the “new gold standard” of gambling data in Great Britain. Mr Miller stated the Gambling Commission is clear that “better data will lead to better regulation and better outcomes for both consumers and operators as a result.” As we have discussed previously, this is something we strongly support; better evidence and data should lead to better regulation, but time will tell.

Summary

Gambling is a global industry with global gambling businesses. The Gambling Commission’s desire to increase collaboration, especially against the backdrop of the Gambling Act Review and its previous speeches, is unsurprising. As Mr Miller acknowledged, “o regulator – regardless of their experience or scale can be the world police” for the gambling industry. Watch this space to see what increased collaboration amongst international regulators means!

11Oct

Regulatory returns are under the microscope – but will the key issue be missed?

11th October 2023 Chris Biggs 157

The Gambling Commission’s Director of Research and Statistics, Ben Haden, posted a blog on 6 October 2023, entitled Making better use of operator data.

In the blog, Haden explains that, following industry discussions at the Setting the Evidence Agenda Conference on 9 March 2023, and as hinted at in the Gambling Commission’s Evidence gaps and priorities 2023 to 2026 publication in May this year, the Gambling Commission is introducing two new measures over the next six months that are intended to enable it to gather more detailed operator data.

Measure 1: “Sharpening” the data currently received from licensees in regulatory returns by “removing a significant number of items which are out of date or not useful”; increasing the frequency of reporting requirements for many licensees, from annual to quarterly; and aligning reporting dates.

Measure 2: Commencing a pilot to receive a more detailed “daily aggregated consumer data” from operators (meaning aggregated transaction data over the course of a day – not on a per transaction basis).

According to Haden, Measure 1 will be subject to public consultation in November.

In this article, we discuss Measure 1 and consider its effectiveness in the absence of improvements being made to the current regulatory returns system.

Background

In our recent blog on regulatory returns, we highlighted that the Gambling Commission is taking a tougher approach to regulatory returns and, in particular, will escalate to its Enforcement team any operator which fails to submit its regulatory returns on time. As a reminder, it is a licence condition for all licensees to submit regulatory returns on time (15.3.1 of the Licence Conditions and Codes of Practice). Separately, we understand that the Gambling Commission has established a working group which is seeking feedback on the questions raised in the regulatory return form.

Regulatory returns are clearly therefore under the microscope internally at the Gambling Commission – but what is going to change?

Proposed changes to regulatory returns

As mentioned above, Measure 1 will be subject to public consultation in November 2023. For now, therefore, we have only a generic outline of the proposed changes.

Proposal 1: Certain (out of date and/or not useful) questions to be removed.

We agree that less is more, but will the Gambling Commission also take the opportunity to review the remaining questions and related guidance, to ensure it elicits the correct responses from licensees?

Proposal 2: Frequency of reporting to increase for many licensees.

This change would only apply to licensees that are currently required to submit annual returns, which include (but are not limited to) the following licences:

Adult gaming centre
Betting (limited) (non-remote)
Betting (standard) (non-remote and if less than 50 premises)
Betting intermediary (non-remote)
Bingo (non-remote)
Gambling software (ancillary, non-remote, remote and linked)
Pool betting (non-remote and remote)

The full list of licences and the current frequency of reporting can be found here.

Proposal 3: Regulatory returns reporting dates to be aligned.

We expect the Gambling Commission will require all licensees to submit regulatory returns at the same time, rather than in line with (for example) their own financial reporting periods.

These proposals follow the Gambling Commission’s previous efforts, in 2014, to align regulatory returns (for all licensees) to a periodic reporting frequency from 1 October, the original date the point of consumption licensing regime was due to be implemented. The rationale of these proposals was explained in the Gambling Commission’s Review of remote casino, betting and bingo (‘RCBB’) regulatory return and gambling software regulatory return consultation response, in August 2014. The proposals were abandoned following the judicial review that delayed the implementation of the new regime.

Technology is only as good as the data put into it. Doesn’t the same apply to the Gambling Commission?

Haden opens the blog by stating:

“Operator data is a rich resource in terms of ensuring how we understand how the market is developing, appreciate how interventions we make are (or aren’t) having an impact and at a fundamental level ensure we charge the right fees and can forecast and manage income and finances.”

and concludes it by asserting that:

“better evidence driven by better data, will lead to better regulation.”

Whatever the Gambling Commission’s aims, its intention to collect better industry data is laudable; we cannot argue that better evidence and data should lead to better regulation. However, as we have discussed previously, the current regulatory returns system is imperfect and lacks detail. This lack of clarity has, in our experience, sometimes resulted in incorrect data being provided with the regulatory returns, or being provided under the wrong licensable activity.

This is of course a serious concern from the licensee’s perspective, as it is an offence under section 342 of the Gambling Act 2005 for a licensee to misrepresent or provide false information to the Gambling Commission without reasonable excuse. However, it also raises concerns regarding the quality of data being collected by the Gambling Commission – and thus the reliability of the conclusions drawn therefrom.

The Gambling Commission is right to acknowledge that operator data is a potentially rich resource, but the quality (or otherwise) of the data collected will be key to ensuring that it can be relied upon by the Gambling Commission. Whether data is to be used to calculate correct fees, to manage income and finances, or to identify and evaluate market change does not matter. If the data provided to the Gambling Commission by licensees is incomplete or inaccurate, it will cast doubt on decisions taken by the regulator and may lead to the wrong regulatory outcomes.

When it consults on Measure 1, we hope the Gambling Commission will at the same time propose (and consult on) changes to:

the remaining questions that are posed in regulatory returns; and
the associated guidance,

to ensure there is little to no ambiguity between licensees as to what data should, and should not, be provided.

By taking the time to get the regulatory returns process right now, the Gambling Commission could make significant gains in the future, by ensuring that the datasets it collects going forward are as accurate, and therefore useful, as possible.

Next steps

Licensees should look out for the Gambling Commission’s consultation on Measure 1, which is due to be published in November 2023. Once the consultation is open, we recommend licensees to respond and use the consultation as a platform to raise other concerns about the regulatory returns system, even if they are not specifically raised by the Gambling Commission. In the meantime, licensees can also contact the Gambling Commission about the regulatory returns process by completing its online contact form.

Please get in touch if you have any questions regarding the regulatory returns process or if you would like our assistance preparing a regulatory return.

With credit and sincere thanks to Gemma Boore for her invaluable co-authorship.

22Sep

DCMS Committee inquiry on gambling regulation

22nd September 2023 Harris Hagan 162

In case you missed it earlier in the month, on 5 September 2023, the Rt Hon Stuart Andrew MP (Gambling Minster), Ben Dean (Director, Sport and Gambling at DCMS), Andrew Rhodes (Chief Executive, Gambling Commission), Sarah Gardner (Deputy Chief Executive, Gambling Commission) and Tim Miller (Executive Director for Research and Policy, Gambling Commission) appeared before the DCMS Committee examining the Government’s approach to the regulation of gambling. The Gambling Commission gave evidence in the first session at 10am, and the Gambling Minister and DCMS gave their evidence in the second session at 11.30am.

Watch the recording of the DCMS committee oral evidence sessions: