Gambling crackdown

Posted: November 8, 2017

Crackdown in the online gambling sector

Following increasing concerns about mistreatment of customers arising from advances in technology, the Gambling Commission and the Competition and Markets Authority (“CMA”) have started a joint programme to improve transparency and fairness in the gambling industry. The Gambling Commission has updated its Remote Gambling and Software Technical Standards to put further obligations on operators, and it will be imposing harsh penalties on operators that do not co-operate to protect vulnerable customers.  The measures represent a long-overdue overhaul of Britain’s online gambling industry.

Accordingly, from April 2018 all remote gambling operators licensed by the Commission must adhere to a revised set of standards, requiring them to provide customers with easy-to-understand tools to monitor their gambling activities, to provide full on-screen information about each gamble before customers commit to it, and to provide users with tools so that they can limit their own gambling budgets.

Alongside this, the CMA has launched enforcement action against certain operators warning them that if they do not address the CMA’s concerns about unfair commercial practices, particularly regarding the terms and conditions attached to promotional offers, then they risk heavy fines or losing their licences. In August 2017, for instance, 888 Ltd, one of Britain’s biggest online gambling operators, was fined £7.8 million by the Commission as a result of serious failings in its handling of vulnerable customers.

Comment

The Gambling Commission’s 888 ruling included advice on how to avoid the bad practice which led to such a hefty penalty. It explained that self-exclusion is a social responsibility that must be taken seriously by gambling operators, and it is vital that their processes are robust enough to protect those customers that are most vulnerable to gambling-related harm.

888’s fine is only one in a string of recent penalties imposed on the gambling industry: in February 2016, Paddy Power agreed to pay £280,000 after it was found to have encouraged a vulnerable customer to continue betting until he lost his job and access to his children; in April 2016, after taking thousands of pounds from a problem gambler who was using money that he had stolen from a vulnerable adult to feed his habit, Gala Coral agreed to pay a settlement sum of £880,000; and Betfred agreed to pay out £800,000 in June 2016 after the proceeds of theft were used on its website by a VIP customer, who was supposedly offered complimentary drinks and day trips to encourage him to keep betting.

All of those recent actions from the Commission, and the current investigations by the CMA, support the government’s stated intention to drive up standards in the gambling industry and to improve the treatment of customers, following concerns that both the government and industry were not doing enough to tackle the problems. The proposals for dealing with problem gambling, such as self-exclusion schemes or identifying people with harmful gambling patterns, all depend on co-operation from operators.  Yet, recent enforcement actions have shown that not all operators are playing their part in tackling these issues.

Only time will tell whether the new measures will prove to be a game-changer for the industry.

Juliane Althoff, Associate, Simkins LLP

To read the full article, click here. Written for Entertainment Law Review.