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UK LEGAL COMMENT


Is the UK calling time on VIPs?


Olivier Le Moal/Adobe Stock


do is deposit” were met by giving the customer a bonus, rather than with any social responsibility interaction. In this public statement, the Commission suggested that, as good practice, operators should recognise VIPs as high risk and handle them appropriately. This became an ongoing theme of the Commission’s


Northridge Law’s Melanie Ellis examines the ever-shifting sands of British gambling


S 32 JULY 2020


ome people spend a lot of money on gambling. I think most would agree that provided they want to spend that money on gambling, rather than being compelled to do so by an addiction, that is their own affair. Naturally, such people are important


customers of those who are in the business of providing facilities for gambling and, like any business, they want to treat their best customers well by offering them special bonuses and gifts. But it’s become increasingly apparent that it’s not always easy to tell which of these customers are suffering from a gambling addiction – or are at risk of developing one. Few would agree with offering a bonus or gift to encourage a customer with a gambling problem to gamble more. Pressure is mounting on UK licensed gambling


operators in relation to their dealings with “VIP” customers. The start of this can perhaps be traced back to June 2018, when the Gambling Commission fi rst made specifi c reference to VIP schemes in a regulatory action public statement. In this case, 32Red had failed to comply with the Commission’s requirements for customer interaction in relation to a customer who had enjoyed VIP status since 2013. The Commission found that concerns expressed by the customer in chats such as “all I seem to


enforcement action during the past two years. It’s “good practice” advice, as set out in public statements, expanded to include recommendations to ensure VIP teams are suffi ciently trained and work with the same controls as the rest of the business, to ensure that commercial considerations do not override customer protections and to obtain a “holistic” picture of a customer’s source of funds, particularly for VIPs. The Gambling Related Harm All Party Parliamentary Group (APPG) took aim at VIP schemes in its interim report of November 2019, recommending that “far greater assessments are taken by operators to assess a person’s suitability to have a VIP account”. In response, industry group the Betting and Gaming Council pledged to introduce a code of practice for its members in dealing with VIPs and, from 1 April, its members have agreed to restrict VIP accounts to customers aged over 25. Nevertheless, in its fi nal report published in June 2020, the APPG recommended that VIP schemes and inducements be abolished altogether. In my opinion, this would be problematic. Recognising that high spending customers are more likely to correlate with customers suffering from, or at risk from, problem gambling, it is essential that these customers are kept within the licensed regulatory environment. As an aside, the APPG seems to have missed that correlation does not necessarily equal causation! The Gambling Commission’s regulation may not be perfect, but it involves signifi cantly more oversight than Curacao, for example. The last thing we need to do is drive at-risk customers to sites operating under lower regulatory standards but able to continue offering attractive inducements. The Gambling Commission’s approach to the VIP problem is


more pragmatic. It launched a consultation exercise just days after the APPG published its fi nal report, along with draft guidance on VIPs to be followed by licensees. While it’s unlikely the Commission will make many changes to the draft guidance before it is put into fi nal form, I would encourage UK licensed operators to respond to the consultation as some of the proposals are likely to be particularly onerous to some types of operator, depending on the nature of their VIP schemes. The draft guidance defi nes a VIP (or “High Value Customer”)


as a customer “identifi ed as being of enough commercial value to warrant enhanced customer service unavailable to the wider customer base”. This includes: • invitations to hospitality, events, dinners, or other enhanced services,


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