Gambling Commission

Over the past few years the commission has been implementing deliverables arising from the Gambling Act Review. Launched in 2020, this set out to determine whether gambling regulation was ‘fit for the digital age’. The review eventually led to a white paper which sets out a comprehensive package of reforms, including enhanced online protections, stricter financial risk checks, tougher advertising and marketing controls, and improved consumer redress. While the change of government in July 2024 stunted progress for a short period, several measures recommended by the white paper have been passed in recent months, such as online slot stake limits and a statutory levy on gambling operators.

The Gambling Commission has an emphasis on social factors within its decision making – protecting individuals and communities from gambling-related harm is central to its enforcement philosophy and the penalties it imposes. Data collected by CMS to analyse the impact that ESG factors have in their enforcement decisions and level of penalties shows that over the last three years over 90% of cases included an ESG issue. Furthermore, since 2015, the highest financial penalties each year have consistently resulted from cases involving ESG-related issues. The commission will prioritise social responsibility and consumer protection over the coming years by working more closely with other regulators to address the social impacts of gambling; for example, with the ASA to ensure advertising is socially responsible.

The commission recently warned that criminals are able to circumvent money laundering checks using false documentation, deepfake videos and face swaps generated by artificial intelligence. But this is only one of the impacts that AI is having on the industry, from its deployment by licensed operators enhancing their products and detecting fraud to its utilisation by illegal operators to create promotional content. While gambling businesses have long employed algorithms, the burgeoning deployment of AI – which is not even mentioned in the Gambling Act Review or the white paper – looks set to pose some increasingly pressing challenges to the regulator.

The commission has been increasing its efforts to stop unlicensed online operators operating at scale in Great Britain, amid indications that the black market has been growing rapidly. Its strategy is to target its efforts as far upstream as it can, focusing on third parties such as ISPs, payment providers, software providers and search engines. The Crime and Policing Bill currently before parliament contains provisions that will enable the commission to take down IP addresses and websites more quicky and effectively.

The commission’s 2023-24 annual report noted that the compliance rate among larger operators almost trebled over two years. However, we have recently seen a spate of enforcement action from the commission against smaller operators and on regulated B2B companies, such as gaming suppliers. These cases make clear that the commission remains committed to imposing additional obligations on operators following licence reviews and taking action against land-based as well as online operators. It expects B2B suppliers to know and control where their content ends up by using anti-money laundering checks, controlling geographical access to games and detailed due diligence on suppliers.

As Andrew Rhodes, the CEO of the Gambling Commission acknowledged in a recent speech, there is a generational cohort of people under 40 who are using cryptoassets but do not currently have a space to use them in the legitimate UK gambling market. The commission is concerned that cryptoassets present additional risks, such as fluctuations against fiat values and challenges around customer identification. But as the UK moves towards a regulatory regime for cryptoassets, the commission is under pressure to get to grips with the reality of crypto.