UK LEGAL COMMENT
can deposit funds or gamble. Data suggests that the majority of underage online gambling takes place under parental consent and supervision. It is unclear for the Minister’s statement whether the focus here is on online gambling, or whether this relates to land-based premises, where in some cases the Commission’s test purchasing exercises have revealed weaknesses in the past. It is perhaps more likely that Mr Philip was referring to further measures to prevent gambling being advertised to under 18s, which could well include restrictions on sports kit sponsorships by gambling operators. No further details on the Government’s plans were
provided in this debate, however in a speech at the GambleAware conference on 8 December the Minister also mentioned “a robust system to prevent unaffordable online gambling”. He went on to acknowledge that “affordability checks need to be proportionate” and agreed that demanding payslips and bank statements from every customer spending £100 would be disproportionate. The implication is that the White Paper will cover this topic through legislative reform, however the Minister also stated that the Commission would soon publish more on its requirements. It appears that data will form a key part of the
Government’s planned approach. Mr Philip stated that the Commission needs “the ability to requisition and analyse bulk account-level data from operators” and that the ICO had “confirmed that a single customer view can be delivered”. The single customer view in particular seems unlikely to come to fruition this year given the development work entailed, but it will be useful to see in the White Paper what the Government’s additional proposals in this area entail.
Changes in the Gambling Commission’s approach
Despite recent reports in the Guardian newspaper, it is still unclear whether Andrew Rhodes will remain as CEO of the Commission on a long term basis. Nevertheless, enforcement activity by the Commission since he took the reins last summer indicates a continuation of the increasingly strict approach to regulatory compliance. In December 2021 alone two operators paid penalties of around £700k each (Buzz Group and Greentube) and one surrendered its licence in light of likely revocation (IMME). The Commission’s current approach is set out in its latest Compliance and Enforcement Report, which gives examples of what the regulator considers to be poor and good practice by operators. Poor practice examples include: • failure to consider the full range of circumstances in which enhanced due diligence should be applied, for example failing to apply it to politically exposed persons,
• permitting commercial considerations to override compliance obligations, and
• requiring high financial thresholds to be triggered before due diligence take place. The good practice examples for the most part reflect existing requirements, but an example of how those requirements have been interpreted by an operator was endorsed. This included:
• blocking a new customer’s account after they made total deposits of £250 on the day the account was opened, until the customer provided information including occupation and salary, and
• a monthly net loss limit being placed on the customer’s account based on the information provided by the customer. Anecdotally, this example reflects the expectations of the Commission which we have encountered during routine compliance assessments and enforcement activity. Taking steps to limit customers’ gambling pending the provision of information and then based upon that information may well form part of additional customer interaction guidance which the Commission intends to publish shortly. The APPBG sought evidence of the Commission acting
beyond its powers, outside the Regulator’s Code and in an incompetent manner at the end of last year. If and when it reports in the coming months, some criticism of the Commission is to be expected given the remit of the investigation. There may not be time for this to feed into the Government’s review of the Gambling Act, but such criticism may provide fuel for upcoming debates on legislative changes. If they are taken on board by the Commission, suggestions for improvement made by the report may lead to changes in approach, but these are more likely to be changes which relate to the way the Commission conducts licence applications and enforcement activity (for example by improving its response times) given the evidence sought, rather than changes in its compliance expectations. Neither this report nor the Government’s review seem
likely to lead to the Gambling Commission being replaced in its entirety. In his speech on 8 December Chris Philip MP stated that the “Commission is central to all of the promising projects” and he “wants them to continue to build on the excellent work they have done over recent years to protect vulnerable consumers”. 2022 is therefore expected to bring proposals for stricter gambling regulation, but not necessarily the changes themselves. This will, at least, provide gambling operators with increased certainty as to the future regulatory environment.
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.
JANUARY 2022 27
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