Gambling Commission launches consultation on age and identity verification procedures

United Kingdom

On 5 September 2018, the Gambling Commission launched a public consultation on age and identity verification procedures in online gambling, the latest step in the Commission’s ongoing effort to address the harms caused by underage gambling. The consultation was first presaged in the Commission’s Review of online gambling, published in March 2018, and subsequently confirmed in its response to the Responsible Gambling Strategy Board’s report on children, young people and gambling, published in June 2018. For more on the Commission’s previous review and response, please click here.

The consultation is relevant to all remote gaming and betting licensees, as well as to a small number of society lotteries and external lottery managers. The consultation is open to the public, and in particular, the Commission encourages responses from current or prospective gambling licensees, identity verification solution providers, gambling customers and those impacted by gambling. The consultation will close on 27 November 2018, and the Commission intends to bring any resulting changes into force as early as April 2019.

The Commission’s proposals

The consultation outlines specific proposals to amend the Commission’s Licence Conditions and Codes of Practice (“LCCP”) in two key areas: (1) age verification (“AV”); and (2) customer due diligence.

1. Changes to AV requirements

Currently, gambling operators have a period of 72 hours in which to carry out age verification checks on their customers (with special dispensation provided to credit card users). Though customers are not allowed to withdraw their winnings until AV checks have been completed, the current system presents an opportunity for underage gamblers to deposit money and gamble undetected for up to three days.

Under the terms of the new proposal, the Commission would eliminate this 72-hour period and credit card dispensation, such that licensees would be required to verify the ages of all customers prior to depositing money or gambling, regardless of the method of payment used. This proposal will also apply to lotteries (other than subscription or low-frequency lotteries) and free-to-play online instant win games made available on licensee websites. Though free-to-play games are not technically gambling, the Commission believes that these games promote real gambling products and that there is no legitimate reason why they should be made available to children.

The Commission anticipates that the abolition of the 72-hour rule may impose additional costs on the industry; however, it also notes that many gambling operators already conduct AV checks prior to allowing customers to gamble, and that technological advances could allow these checks to be conducted in a matter of seconds or minutes.

2. Changes to customer due diligence procedures

In addition to the measures described above, the Commission also proposes to introduce an LCCP condition requiring licensees to obtain and verify basic customer identification details (including names, addresses, dates of birth and email addresses) prior to allowing customers to gamble. Licensees must also ensure that customer payment methods match up with customer identities, and that customers are made aware of the form and nature of the identity documents required, and under what circumstances they will be used.

The Commission anticipates that such early identification will reduce regulatory risk. Currently, inadequate identification and insufficient customer due diligence means that licensees are less able to prevent harm from gambling or detect criminal activity, and that some customers may even be stopped or delayed from withdrawing their winnings due to late-stage checks. By implementing a requirement for early customer due diligence, the Commission hopes to better-equip licensees to comply with LCCP objectives.

Next steps

Given that the LCCP is outcomes-focused by design, the Commission does not intend to prescribe exactly how gambling operators should complete AV checks and customer due diligence. However, gambling operators should carefully consider how best to implement these new measures to deliver the Commission’s requirements.

Please click here if you would like to view the Commission’s consultation document or provide a consultation response.