Gambling Commission publishes part 1 of its response to the LCCP consultation

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

With the new Gambling (Licensing and Advertising) Bill due to receive Royal Assent shortly, the Gambling Commission has published the first part of its response to the latest LCCP consultation.

Whilst a number of the changes being proposed to the LCCP's are uncontroversial - or at least the principles underpinning them are uncontroversial - the Gambling Commission does seem to be over-reaching in places.

Management roles

One example is the new requirement that licensed operators ensure that their head of regulatory compliance also does not hold other specified management roles within the company. There is logic to the Commission's position that a head of compliance might experience some conflicts of interest if they are also head of marketing. However the Commission does not seem to have taken note of the number of respondents who "queried whether it was in the Commission's remit to dictate management structures to this extent".

Contract terms with third parties

The new LCCPs also seek to dictate the terms of licensed operators' agreements with third parties who provide any aspect of the licensed operator's business related to gambling. A new condition requires operators to ensure that in their contracts with third party contractors they not only oblige the contractor to conduct themselves as if they were bound by the same licensing conditions and codes of practice as the operator, but also have the benefit of termination rights in the event that the operator reasonably believes that the third party has acted in a manner which is inconsistent with the licensing objectives. Any sensible lawyer acting for a third party on the negotiation of a contract with a licensed operator would advise against agreeing to such a far-reaching and subjective termination right. Operators have also argued that the Commission should not be dictating the terms of commercial contracts. However the new condition remains, and operators will be obliged to include this language going forwards and so there will not be too much room for negotiation. The Commission states that "the ability to terminate does not mean that contracts should be terminated in trivial situations or where any unforeseen errors are swiftly put right" and operators and third parties will need to work on the specific language that will be required to ensure that this is the case. However clearly this is going to have a disproportionate impact on smaller players who are less able to push back.