April 2, 2020

On a number of occasions in the last 12 months, Neil McArthur, the Chief Executive at the Gambling Commission has given speeches in which he emphasised the need for the gambling industry to collaborate to address a number of systemic issues the regulator had identified in its compliance and enforcement case work.

In October last year, the Commission launched an initiative which, to use Mr McArthur’s words in subsequent speeches “have the capacity to deliver real and rapid change for consumers in key areas of risk”.

He implored the industry to collaborate to address three core issues:

• Incentivisation of high value customers (i.e VIPs)

The Commission remained concerned that even though licensing conditions expressly required operators to maintain policies and procedures to mitigate the risks associated with high-spending customers, “the evidence from enforcement work, compliance work and consumer feedback suggests that current requirements are not effective”.

• Use of Ad Tech

Operators were challenged to make “better use of technology to minimise the risk of exposure of gambling advertising content to children, young people and vulnerable adults”

• Product and Game Design

The industry was challenged “to work together to produce an effective Industry Code for Game Design, to be published no later than this Spring’s Raising Standards conference”.

The Commission’s approach of setting consumer protecting goals for the industry to pursue attracted criticism from a small, yet vocal group of politicians, journalists and individuals who have lived through the experience of gambling-related harm. One might expect such criticism whatever approach the regulator took. Yet, in a relatively short period of time, there has been tangible progress. Any conversation with senior compliance personnel at the larger operators and suppliers who drove these initiatives would demonstrate the seriousness with which the tasks were undertaken.

Working groups made up of senior leaders from the industry were formed in January 2020 – concentrating on use of VIP incentives, safer advertising online and the use of safer product design. The working groups featured over 30 operators, co-ordinated by the Betting and Gaming Council.

Late yesterday, the Commission made a significant announcement relating to this initiative, being:

• Under 25s to be restricted from joining VIP schemes
• Tightened controls to be introduced for other VIP customers
• Online advertising rules strengthened to better protect vulnerable groups
• The progress made on safer product design but the Commission challenged the “industry to go further”.

Taking the three challenges laid down by the Commission in turn:

Use of VIP incentives

An industry code has been developed which will:

• Restrict and prevent customers under 25 years of age from being recruited to high value customer schemes.
• Ensure all customers must first pass thorough checks relating to spend, safer gambling and enhanced due diligence before becoming eligible for high value customer incentives.
• Subject all reward programmes to have full audit trails detailing decision making with specified senior oversight and accountability.

The Commission will now consult on permanent changes to the licence conditions and codes of practice (“LCCP”) and expects the industry to implement the code “as soon as possible” and considers most measures “should be implemented within 3 months”.

Safer advertising online

This challenge “was aimed at reducing the amount of online advertising seen by children, young people and vulnerable adults”.

The industry will be required to:

• Maintain a common list of negative search terms (e.g. how do I self-exclude from gambling?) and suppression websites, which will help shield vulnerable groups from online gambling ads;
• Make better and more consistent use of customer data to ensure paid-for-ads are targeting away from vulnerable groups;
• Implement an approach which means that advertising is only targeted at +25 age in social media and “Pay Per Click” advertising where platform facilities permit;
• Age-gate YouTube channels and content; and
• Adopt and roll out to all affiliates a code of conduct.

These measures will be adopted across the industry “as soon as possible” and in any event enshrined in the IGRG’s Gambling Industry Code for Socially Responsible Advertising, likely effective by July 2020. Compliance with that Code is an Ordinary Code provision in the LCCP.

Further, the Working Group will:

• Establish a permanent cross-industry Adtech Forum to trial developing advertising technology;
• Work with the Gambling Commission to publish and promote consumer advice; and
• work with online platforms and broadcasters to identify effective ways to blocking gambling advertising.

The Commission “expects industry to work collaboratively with the platforms to identify and implement further solutions.”

Safer products

This group was tasked with developing an industry code for responsible product and game design.  The Commission confirmed that the industry has agreed to:

• A minimum spin speed of 2.5 seconds on all slots;
• Removal of game features which may encourage intensive play;
• Removal of split-screen slots;
• A more detailed work plan which will include in-game messaging and a deeper assessment of certain game features; and

The Commission has made it clear this task needs more impetus. It says that “while some progress has been made, this work must now go further and faster”. It is intended that the final code be published in September.

Next steps

The industry participants involved will continue to work together with the intention to “develop and rapidly implement the proposals, with some measures around VIP customers being implemented as soon as April 14”.

The Commission will now launch formal consultations on these areas to ensure that the new measures are incorporated into its regulatory framework – which means that all operators will have to abide by the new rules.

Neil McArthur, said yesterday “Ultimately actions speak louder than words and any operator that does not put consumer safety first will find itself a target for enforcement action.”

As if the industry needed further regulatory warnings, the Commission itself is in the spotlight and has been the subject of recent, vitriolic criticism in the media and by a relatively small gang of politicians. With that backdrop, the decision to hand these task to the industry will need to produce tangible results. Once the resulting requirements are more formally enshrined, we can expect any operator that fails to live up to the expectations will feel the full punitive force of the regulator.

The Commission’s announcement can be read here.