Gambling Commission announces changes to the protection of consumer funds rating system

United Kingdom

In accordance with Licence Condition 4.2.1, gambling operators who hold customer funds must set out information on arrangements for protecting these funds in the event of their insolvency, including the level of that protection and the method by which it is achieved.

To that end, the Gambling Commission requires operators to use a rating system to inform customers how their funds are protected in the event of insolvency. On 3 December 2018, the Gambling Commission launched an informal consultation on changing this ratings system, specifically the name and descriptors, to promote greater transparency and to ensure that consumers are fully informed when making decisions about gambling.

In the consultation, the Gambling Commission proposed certain changes that gained support in the responses it received. Consequently, the changes below (in italics) will come into effect on 29 April 2019. Operators will have eight weeks from this date to implement the changes.

Current customer funds ratings system

New customer funds insolvency ratings system

Not protected (No segregation – permitted for non-remote and ancillary remote operators only)

Not protected (No segregation – permitted for non-remote and ancillary remote operators only)

Basic (Segregation of funds – minimum requirement for all remote operators who hold customer funds)

Not protected (Segregation of funds – minimum requirement for all remote operators who hold customer funds)

Medium (Quistclose or equivalent)

Medium protection (Quistclose or equivalent)

High (Independent trust account)

High protection (Independent trust account)

Operators are required to communicate any changes to new customers in accordance with Licence Condition 4.2.1. Where an operator previously described the level of protection as "basic", they must inform customers of the new "not protected" rating when a customer makes a subsequent deposit after the change is made.

The Gambling Commission's full response to the consultation can be found here.