January 31, 2019

The Gambling Commission issued an “industry warning notice” (a new concept we think) earlier today relating to the use of NDAs with customers – https://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2019/Industry-warning-notice-use-of-non-disclosure-clauses-NDAs.aspx. The Commission accepts that NDAs have their place in the business world but fear that UK licensed operators are using them as part of player settlements in a manner which prevents the customer notifying the Commission or law enforcement agencies of failings on the part of the operator.

This is an increasingly tricky area for operators. On the one hand, players are becoming more savvy in their complaints/requests for compensation (emboldened by a bloodthirsty anti-gambling media and a increasing wave of no win no fee lawyers seeking a new niche and citing massive regulatory fines). On the other hand, operators are rightly reluctant to settle a complaint (whether the grievance is real or not) without thinking it is bringing a matter to a close.

The key element of this balancing act is for an operator to be confident on whether or not it needs to report the settlement, the underlying circumstances and/or (if relevant) any related failings to the Commission. If an operator makes a notification or concludes that it doesn’t need to, it shouldn’t be concerned about the customer contacting the Commission. Of course, these can be margin calls but the Commission is saying that gagging clauses cut across one of the key licensing principles – transparency.

Don’t tell anyone, but that is probably fair enough…