UK LEGAL COMMENT Prediction 3 – Affordability requirements
The continued failure of the GC to respond to its February 2021 consultation on customer interaction and affordability measures is a strong indication that this issue is due to be addressed in the White Paper. On a number of occasions, Ministers have made reference to the fact that the Gambling Act review is investigating the best way to protect the vulnerable from ‘exploitation’ by the gambling industry and affordability checks are seen as fundamental to this. In a speech at the GambleAware conference on 8 December, Mr Philip acknowledged that “affordability checks need to be proportionate” and agreed that demanding payslips and bank statements from every customer spending £100 would be disproportionate. An indication in the White Paper of what level of spend would justify requests for evidence of affordability, and what type of evidence would be appropriate in what circumstances, would be welcomed. Again, Mr Philip indicated that the GC would be expected to
have access to and monitor data from operators to ensure affordability checks are carried out when needed.
Wish 1 – Review of licensing for land-based casinos
The Gambling Act 2005 created 16 new casino licences and a regime for allocating those to certain local authority areas. Almost 15 years have passed since this system came into force and half of the licences remain unused, due primarily to lack of demand for casinos in those areas. Meanwhile, casino operators would very much like to open new venues in alternative areas where there is demand (such as Blackpool), but there is no mechanism for them to do so. This wish has at least some chance of being granted, as Mr Philip mentioned in answer to a question on 24 March that part of the review would include the legislation governing casinos and stated that “we are looking to how the current rules can be improved”. He also recognised the need to “balance the ability of casinos to be economically viable with the need to keep players safe”. These (somewhat vague) statements give hope that some flexibility might be introduced to allow casinos to open in new areas, although it must be acknowledged that legislating to allow additional gambling venues in the current climate does not seem like a vote winning move for the Government.
Wish 2 – Set requirements re source of funds evidence for investors in gambling companies
The GC’s recent approach to investigating investments into gambling companies (both at the application stage and once licensed) involves it seeking to establish the legitimate source of invested funds. Whilst understandable in principle, given that one of the licensing objectives is to prevent gambling from being associated with crime, in practice this has led to lengthy investigations, sometimes running into years.
36 APRIL 2022 It is critical for applicants and licensees to be able to know, in
advance of seeking investment, what evidence they will need to be able to provide to demonstrate the legitimate source of funds received. The negative consequence for an operator, should they receive investment from an entity or individual who is later unable to provide the required evidence, is severe – it can mean the loss of or refusal of a licence. This topic is unlikely to be covered in the review, but in an
ideal world the Government would clarify what test should be applied. This would enable licensees and applicants to follow a recognised due diligence process and, for example, accept funds from a regulated investment fund knowing that in the absence of any reason for suspicion about the monies received this will be acceptable to the GC.
Wish 3 – Measures to offset the impact of advertising restrictions
Two key implications of significant restrictions on gambling advertising will be a reduction in funding for sports and reduced channelisation. I very much hope that these will be addressed in the review, to minimise the impact of new restrictions as far as possible.
In a House of Lords debate on 1 March, Lord Foster of Bath
suggested that “a ban on sponsoring sporting bodies could be phased in and the loss offset by offering sports rights, where gambling companies pay for the right to offer betting on sporting events”. This seems like a solution that might be taken forward, but again it adds to the costs that will be borne by licensed operators only and avoided by those operating in the black market. Licensees cannot simply take the marketing budget they previously applied to sports sponsorship and use that to pay for betting rights with no effect on their bottom line. In relation to channelisation, reducing the ability of licensed
operators to reach their target audience ahead of their unlicensed competitors needs to be offset with greater preventative measures for the black market. I hope that the White Paper will include some proposals for this, with payment blocking an obvious option.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
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