UK Gambling Commission tightens social responsibility measures on gambling operators

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The UK Gambling Commission has decided to strengthen the social responsibility provisions in the licence code and codes of practice (LCCP) by introducing stricter requirements on online and retail gambling operators.

Gambling operators which provide gambling facilities in Great Britain must comply with the LCCP as a condition of their licence. The latest changes to the LCCP follow a review by the Gambling Commission into "better ways of preventing and reducing gambling-related harm, and increasing player protection measures".

Timing of changes

Save for a handful of exceptions, the changes to the LCCP will come into effect from 8 May 2015. There are also changes to the Remote Technical Standards (RTS) and these will take effect on 31 October 2015.

Key changes

• Larger operators are required to give an annual assurance statement to the Gambling Commission. The annual assurance statement will be a short account - that businesses can be held to - of how, at the most senior levels of the business, operators ensure that their provision of gambling is in line with the licensing objectives. The Gambling Commission is currently consulting with large operators and other stakeholders on the form and content of the assurance statement. Operators are invited to participate here before 19 April 2015. The Gambling Commission envisages that in the assurance statement an operator will assess and report on:

1. the control systems and governance arrangements which it has in place, particularly in relation to crime prevention and social responsibility;
2. the actions it has taken in the past twelve months (prior to the submission of the assurance statement) to improve control systems and governance arrangements; and
3. its plans to improve those governance arrangements and control systems in the following twelve months as well as the estimated impact of those improvements. Although the Gambling Commission will confirm exact timeframes later this summer, it is anticipated that the first assurance statement will need to be submitted by operators between 1 October and 31 December 2015 and that it will cover the preceding twelve months as well as look forward into 2016. The Gambling Commission will also confirm which operators are required to provide assurance statements when they announce the dates of the submission window. One issue that is concerning operators is the requirement to identify 'at-risk' customers in addition to 'problem' gamblers. Clear guidance will be required in order to assist operators in ascertaining who should be classified as 'at-risk' and the parameters of this definition drawn very carefully in order to avoid unnecessarily classifying significant numbers of customers as 'at-risk'.

• Casinos and larger operators must conduct test purchasing, as a means of monitoring the effectiveness of their policies and procedures designed to prevent underage gambling.
• Operators must implement policies which use information to ensure effective customer interactions, in particular, to identify at-risk customers who may not be displaying obvious signs of problem gambling and in relation to 'high value' customers and to interact with customers demonstrating signs of distress, agitation and aggression.
• Notification of new target markets for group companies. Operators will be required to notify the Commission on becoming aware that a group company is advertising remote gambling facilities to those residing in a jurisdiction in or to which it has not previously advertised.
• Multi-operator self-exclusion scheme to be implemented by the Gambling Commission. This will be a centralised online database of individuals who have excluded themselves from gambling online and to whom operators must not provide gambling facilities. This is due to come into force one month after the Gambling Commission has established the database (likely to be 2016 / 2017).
• Additional remote technical standards for gambling management tools, including in respect of 'auto-play' functionality, giving players a means of setting 'reality checks' at pre-defined points in each session and providing a 'time out' facility for players so they can block themselves from playing for a set period of time.
• Express requirement that 'free bet' offers are marketed in a fair and open way and do not mislead. This follows the UK Government's review of gambling advertising last year.

There are also more minor changes which essentially codify what the Gambling Commission perceives to be good practice for gambling operators. These include for example: (i) improvements to operators' policies, procedures and controls which prevent access to gambling by children and young people; (ii) widening the types of channels through which operators can communicate with players; and (iii) clarifying the requirement on operators to provide financial support to research, education and treatment.

What next for gambling operators?

Aside from taking the appropriate steps to comply with the revised LCCP, gambling operators should also be aware that they can contribute to the further consultations which have been proposed by the Gambling Commission. These include consultations on:

• Specific issues arising from the social responsibility measures in the LCCP, for instance, on alternatives to Return to Player and on the form and content of the Assurance Statement (as mentioned above, this consultation opened in February and will run until 19 April 2015, more information on how to contribute can be found here);
• The crime provisions of the LCCP (expected to begin this Summer);
• The Remote Technical Standards (expected to begin towards the end of this year);
• The on-line multi-operator self-exclusion scheme (the start date of which is to be confirmed);
• The principles underpinning the Gambling Commission's fee structure and fee levels (the start date of which is to be confirmed).