The Commission’s keynote speech at the ‘Know How’ conference

United KingdomScotland

The fourth annual ‘Know How’ conference took place across 7 and 8 September 2021.

In his keynote speech at the conference, Tim Miller, Executive Director at the Gambling Commission (the “Commission”), emphasised the Commission’s continued focus on the Licensing Objectives:

  • preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime;
  • ensuring that gambling is conducted in a fair and open way; and
  • protecting children and other vulnerable people from being harmed or exploited by gambling.

He referred to the Commission’s activity over the last 18 months and the effect of the pandemic on the industry, acknowledging that COVID had clearly had a significant impact on the behaviours of consumers and their exposure to risk.

His speech focused on the Commission as an evidence-based regulator, covering;

  • progress in relation to ad-tech, the treatment of VIPs and the design of games and products to make gambling fairer and safer;
  • the approach to keeping crime out of gambling;
  • operator’s interaction with customers at risk of harm; and
  • raising the Commission’s standards.

In closing, he emphasised that there was one simple message to take away:

Whatever else changes, the work to make gambling in Great Britain fairer, safer and crime free continues.

Evidence Based Regulator

Tim Miller sought to emphasise that the Commission continued to seek to deliver the Licensing Objectives by gathering and acting based on evidence. Its approach was to identify risks based on evidence, address issues quickly and underpin progress with regulatory requirements. He recognised that though evidence may not always be conclusive, action would be taken through use of a precautionary principle.

Safer and fairer gambling

Tim Miller noted that prior to the pandemic the Commission had called upon the industry to make progress to make gambling fairer and safer in three areas:

  • use of Ad-Tech to protect children, young people and vulnerable people;
  • the treatment of high value customer or VIPs; and
  • the design of games and products.

In relation to Ad-Tech, the actions taken immediately by the industry to protect children, young and vulnerable people included a common list of negative search terms and suppression websites, use of data to ensure paid for ads are targeted away from vulnerable groups, advertising targeted only at over-25s, age gating YouTube channels and content and a regularly updated and amended code of conduct to be implemented by affiliates.

He also reminded operators of the new rules intended to stop irresponsible VIP customer practices. Prior to making a customer a VIP, operators must now:

  1. establish the customer’s spending is affordable and sustainable;
  2. assess whether there is evidence of gambling related harm or heightened risk;
  3. ensure licensees have up to date evidence on identity, occupation, and source of funds; and
  4. continue to verify information.

Finally, he noted that the new online games rules aiming to make them safer will come into force on 31 October 2021 and will ban four key features of online slot games:

  • features which speed up play or give the illusion of control over the outcome;
  • slot spin speeds faster than 2.5 seconds;
  • auto-play; and
  • sounds or imagery which suggest a win when the return is equal to or less than the stake.

Keeping crime out of gambling

Tim Miller also sought to focus on the Commission’s steps to shut down illegal sites and take enforcement action against licensed operators.

He noted that the Commission had conducted a significant number of remote assessments and that compliance and enforcement action illustrates that operators were failing to meet money laundering standards. He noted that risk assessments and policies and procedures continue to be not fit for purpose and explained that this year’s Compliance and Enforcement Report would again cover notable cases and set out expectations on operators.

Customer Interaction

Current customer interaction requirements came into force in October 2019 and placed a duty on remote operators to identify customers at risk of harm and take action. However, Tim Miller warned that the Commission had seen clearly unaffordable levels of gambling take place with no interaction being taken until a late stage. He stated:

Just to be clear, we are not talking about grey areas here. We are talking about significant binge gambling or clearly unaffordable levels of gambling without action being taken. Can anyone in this room seriously justify allowing a new customer to lose £10,000 within minutes without any checks or interaction?

He advised that the Commission, after receiving a significant response to its call for evidence (around 13,000 responses), will publish revised LCCP (Licence Conditions and Codes of Practice) requirements on customer interaction in the coming weeks.

He also confirmed that the Commission’s planned next step was a consultation on thresholds for identifying key financial risks including significant losses in a short time, over a long time and financial vulnerability, but that it did not intend to consult on issues part of the Gambling Act review.

The Commission’s standards

Tim Miller went on to consider the Commission’s own standards and powers, emphasising that it must strive to be a high performing, efficient and effective organisation. He emphasised the Gambling Act review would be an opportunity to look at the Commission’s powers and resources to ensure strong performance and that it would work with government and fellow regulators to raise standards.

Tim Miller also recognised the National Audit Office’s criticism of the Commission’s use of data as a regulatory tool in February 2020 and that the Commission needed to do more and emphasised that it required robust comprehensive data from operators.

He noted that the regulatory returns process has historically required considerable quality assurance – due to late, lacking or errors in submissions – and that that could not continue. To address this, next year’s Business Plan will set out a programme of compliance and enforcement action around quality and timeliness of returns. He recommended that operators ensure their data quality processes are robust and fit for purpose – in order to support the Commission’s evidence-based approach.

Timeline of key developments

June 2019

The Commission publishes its Enforcement Report 2018/2019. Our Law-Now dated 2 July 2019 on the Enforcement Report is accessible here.

July 2019

The Commission introduces Customer interaction: formal guidance for remote gambling operators.

August 2019

The Commission launches consultation on gambling with credit cards. Our Law-Now dated 18 August 2019 on the Commission launching the consultation is accessible here.

January 2020

The Commission introduces 5th edition of the Prevention of Anti-Money Laundering and Combating the Terrorist Financing guidance for casinos.

The formation of working groups of senior leaders from the industry to focus on the use of VIP incentives, safer advertising online and the use of safer product design.

February 2020

National Audit Office challenges the Commission on its use of data as a regulatory tool.

March 2020

First COVID-19 lockdown starts.

The Commission reminds operators of their responsibilities to ensure consumers are safe from gambling harm during the COVID-19 lockdown. Our Law-Now dated 27 March 2020 on the Commission stressing operators responsibilities is accessible here.

The Commission requires mandatory participation in GAMSTOP.

April 2020

The Commission publishes its 2020/2021 Business Plan. Our Law-Now dated 02.04.20 on the Business Plan is accessible here.

After collaboration with the industry, the Commission provides an update on restrictions on VIP schemes, a joint effort to shield children and young people from online gambling advertising and responsible product and game design. Our Law-Now dated 3 April 2020 on the Commission announcing actions from three industry working groups is accessible here.

The ban on credit cards comes into effect.

May 2020

The Commission publishes Customer interaction – Additional formal guidance for remote operators during COVID-19 outbreak, instructing operators to follow tighter measures to protect consumers during lockdown. The guidance includes reviews of thresholds and limits, affordability checks, preventing reverse withdrawals and restrictions on bonus offers.

June 2020

The Commission opens a consultation on high value ‘VIP’ customers. Our Law-Now dated 23 June 2020 on the Commission’s VIP customer consultation is accessible here.

Phased lifting of lockdown measures.

July 2020

The Commission publishes an update on the first year of the National Strategy to Reduce Gambling Harms.

August 2020

HM Treasury’s Anti-money laundering (AML) and counter-terrorist financing (CTF) supervision report, 2018-2019.

September 2020

The Commission introduces new rules to stamp out irresponsible ‘VIP’ customer practices. Our Law-Now dated 1 October 2020 on the Commission’s guidance for VIP customers is accessible here.

November 2020

The Commission launches a consultation and call for evidence on customer interaction by remote operators, with a view to introducing stronger requirements for identifying and protecting customers who may be at risk of gambling related harm. Our Law-Now dated 30 November 2020 on the Commission’s remote customer interaction consultation is accessible here.

The Commission publishes its annual Compliance and Enforcement Report 2019/2020 and its first National Strategic Assessment. Our Law-Now dated 20 November 2020 on the Enforcement Report and the Strategic Assessment is accessible here.

The Commission comments on the COVID-19 developments and provides further guidance on expectations as regards consumer protection, marketing and compliance. Our Law-Now dated 11 November 2020 on the Commission’s open letter on the Covid 19 Lockdown is accessible here.

December 2020

The UK Government launches the Gambling Act review.

Stricter COVID-19 measures enforced.

Post-Christmas lockdown begins.

January 2021

The Commission reminds online operators to ensure that they are protecting customers during lockdown.

February 2021

The Commission announces package of changes to make online games safer by design with an outright ban of four key features. Our Law-Now dated 8 February 2021 on the Commission’s announcement of changes is accessible here.

March 2021

Lifting of some lockdown measures

April 2021

The Commission publishes its 2021/2022 Business Plan and Money Laundering and Terrorist Financing Risk Assessment 2020. Our Law-Now dated 28 April 2021 on the Risk Assessment is accessible here.

May 2021

The Commission publishes guidance relating to advertising and marketing rules and regulations.

July 2021

Lifting of almost all COVID-19 restrictions.

October 2021

The Commission’s new rules in relation to online games – banning four key features of online slot games – will come into force.

Stated to be in the coming weeks (but unpublished as at December 2021)

The Commission will be publishing revised LCCP requirements on customer interaction.

December 2021

The Commission published its annual Enforcement Report covering notable cases and set out expectations on operators, in particular, as regards money laundering risk assessments and policies and procedures.

Ongoing

The review of the Gambling Act. Our Law-Now dated 10 December 2020 on the Gambling Act review process, progress and commentary is accessible here.

In due course

The Commission will launch a consultation on thresholds for identifying key financial risks including significant losses in a short time, over a long time and financial vulnerability.

Next year

The Commission will also publish its Business Plan setting out a programme of compliance and enforcement action around quality and timeliness of returns.