UK Gambling Commission Lays Out Recommendations for Fairer Industry

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Tuesday, April 3rd, 2018 | Written by Shane Larson

The UK online gambling market is recognized as being one of the most liberal and lucrative in the world, and in 2017 the industry generated a massive £4.7 billion in profits, with that figure up by 10% compared to the previous year. To give an idea as to how pervasive iGambling has become in the country of 65 million, last year around 9 million of its citizens placed online bets, with public participation rates hitting a high of 18.3%.

As the market continues to grow, however, the government is keen to ensure that customer protection concerns stay at the forefront of the industry, and that online gambling sites become “even fairer and safer for consumers”. With this in mind, last week the UK Gambling Commission (UKGC) released a 63-page review of Britain’s internet gambling market in which it laid out four key policy areas in need of improvement, namely the age verification process, Know your customer (KYC) financial checks, unfair marketing and promotional practices, and better training of staff to identify problem gamblers.

As UKGC programme director Richard Watson explained recently: “Protecting consumers from gambling-related harm is a priority for us and where we see operators failing in their responsibility to keep their customers safe we will take tough action.”

Underage Gambling

The UKGC has recommended sweeping change to the industry in order to prevent underage gamblers from accessing online sites, and potentially becoming problem-gamblers of the future. As a result, the Commission has proposed introducing verifiable pre-registration procedures for all sites operating in the UK offering both real-money and play-money products. The latter was included as play-for-free games are viewed as a potential gateway for encouraging young people to gamble, and as an extract from the report reads:

“We will consult on amending the LCCP to require AV to be completed on all consumers before they can deposit money and gamble, and for play-for-free games to be available only after AV is completed.”

Know your customer

In recent years, the UKGC has handed out huge fines to gambling companies for falling short of their “Know Your Customer” obligations, and not carrying out sufficient background checks in order to ensure that their gamblers have obtained their money legitimately.

To date, 888 has been handed the biggest fine yet handed out of £7.8 million, with other major companies also falling foul of the country’s rules including William Hill (£6.2m), Camelot (£3m), Ladbrokes Coral (£2.3m), and Sky Bet (£1m). Nevertheless, the list is a long one that also includes the likes of Gala Coral, Betfred, GVC Holdings, BGO, Paddy Power, Futgalaxy, and Stan James Online. As a result, the UKGC’s report recommends the following actions:

“We will consult on introducing a customer due diligence requirement so that operators will have more information about their customers at an earlier stage. This would require players to be verified before they were allowed to gamble. We will also consult on requirements that would mean operators had to set limits on players’ spending which could only be increased once they had further verified information about the player, for example via an affordability check.”

Unfair Advertising

One failing of the industry that has drawn a great deal of ire from the UKGC is the unfair and misleading advertising and promotional practices operators use to attract customers. In fact, many are seen as being in direct violation of consumer protection laws, and as a result the country’s Gambling Commission (UKGC) and Competition and Markets Authority (CMA) have been closely monitoring complaints, and have threatened formal legal action and ever greater fines for those firms failing to heed their warnings.

Consequently, the UKGC report pointed out that it was already considering a range of amendments to the Licence conditions and codes of practice (LCCP) in order to ensure that compliance activity is uniform across the whole industry. In addition, more information will be made available as to who consumers should contact if they believe that they have been treated unfairly.

Identifying Problem Gamblers

As part of its ‘KYC’ obligations, the UKGC has tasked operators with delving into the wealth of data it holds on its customers in order to identify problem and addictive gambling patterns before they can turn into life-consuming behavior. Key in this regard is a focus by operators on more effective customer interaction, and once problems are identified the providing of effective support to help consumers deal with any potential problems.

Other Recommendations

In addition to the recommendations already mentioned, the UKGC has also been mulling the possibility of severely restricting or banning altogether the use of credit cards to deposit money into internet gambling accounts. According to the latest statistics, around 10 to 20% of the all customer wagers are funded using credit verticals, and a curb on such activity may be necessary so as to develop a sustainable industry, and reduce “the risk that consumers will gamble more than they can afford”.