Regulator seeks step change from gambling operators as it promotes 'fair and safe' gambling

Out-Law Analysis | 24 Nov 2017 | 10:38 am | 3 min. read

ANALYSIS: A stark warning has been issued to gambling operators in Britain by the industry regulator of their need to do more to ensure 'fairer and safer' gambling.

The Gambling Commission made it clear earlier this week at its 'Raising Standards' conference that, despite seeing some positive steps from some operators, it believes there is a disconnect between the good intentions of operators and the outcome consumers experience.

In the words of the Commission's chief executive Sarah Harrison, operators must go "further and faster" to address issues such as problem gambling.

There are also concerns for operators to address in relation to the way they promote offers, and restrict customers' access to their own funds and winnings, on online betting and gaming sites, according to the regulator.

Problem gambling

In her address to conference delegates, Harrison made it clear that high levels of protection are required to address problem gambling, and that higher risk businesses can expect to face higher costs of compliance in this regard and more regulation. At the moment, operators are not carrying out sufficient due diligence to address the risk, Harrison said. She said operators can expect to face stiffer requirements in future.

Harrison also said that the Commission sees it as a priority for operators to increase the amount of money they voluntarily devote to support research, education and treatment of problem gambling. The contributions made by operators need to be proportionate to their size and level of risk their services pose, she said.

Data protection

Another central theme of the Raising Standards conference was data protection. Gambling operators face new obligations under the forthcoming EU General Data Protection Regulation (GDPR), which will apply from 25 May 2018. In a keynote speech at the conference, Ladbrokes Coral Group chief executive Jim Mullen called for more guidance for operators on how to adhere to the new rules.

The UK's Information Commissioner's Office (ICO) hosted its own focus session at the conference that looked at the duties operators will face under the GDPR.

The ICO has previously raised concern with practices in affiliate marketing in the gambling sector. In November 2016 the watchdog said that it had written to more than 400 businesses believed to be promoting online gambling websites asking them to disclose "how they use people’s personal details and send marketing texts". It said it also wanted details on where those businesses sourced the personal data they use and how many marketing texts they have sent.

Terms and conditions

At the conference, the Competition and Markets Authority (CMA) provided an update on its ongoing investigation into potentially unfair and misleading terms and practices in the remote gambling sector.

The person leading the CMA's work in this area, George Lusty said the CMA is currently in talks with the companies to determine whether its concerns can be addressed through undertakings from the operators or whether the CMA should initiate court proceedings. The CMA has concerns that some terms and practices, particularly around the way operators handle promotional offers, breach consumer protection laws in the UK.

In a detailed speech, Lusty provided guidance to operators on the steps they can take to address compliance risk.

Lusty said that operators should do more to increase the transparency of "significant conditions" they attach to online promotions, including ensuring that the conditions are "provided to consumers in a clear, timely, intelligible, unambiguous, transparent, non-misleading and prominent manner, including within the advert and with the headline offer on all relevant landing pages and sign-up pages for the promotion, and on any other advertising on any medium for the promotion".

Among the other guidance offered, Lusty said operators should honour free bet offers. They should not "enforce account restrictions that would either remove a consumer’s entitlement to a bet, or reduce its value, where a customer has already placed all or some of the qualifying bets under the promotion", he said.

The Gambling Commission reiterated the need for operators to heed the CMA's advice.

Sarah Gardner, executive director at the Commission, said the regulator plans to "step up action in the new year to ensure that consumers are being treated fairly". She urged operators to review their customer terms and conditions.

Tougher rules and sanctions on the horizon

It is clear that the Gambling Commission views this year's Raising Standards conference as an important moment for the gambling industry. The conference was told that some operators had set the bar "too low ... in relation to treating customers fairly" and can expect "unreasonable behaviour" to be punished in future.

In her speech, Sarah Harrison said: "We want to work with you to go much further and faster to reduce harm. But we are at a tipping point, and those that do not share this commitment, those who do not deliver for the consumer, will find themselves in an uncomfortable position, with their future in this industry increasingly in peril."

This message accords with the tougher approach to enforcement that the Commission has committed to in recent times with its specific enforcement strategy and overarching strategy for its work up to 2021.

Audrey Ferrie and Christopher Rees-Gay are experts in gambling law at Pinsent Masons, the law firm behind Out-Law.com.