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Gambling licences to be tied to UK advertising and privacy rules

Gambling providers in Britain could lose the right to operate if they fail to comply with UK advertising rules, privacy regulations or consumer protection law under new licensing requirements set to apply from later this year.

The Gambling Commission has published changes to its Licence Conditions and Codes of Practice (LCCP) (37-page / 341KB PDF) that will take effect from 31 October this year. Those changes tie compliance with the UK's advertising codes, legal requirements to obtain consent for direct electronic marketing, and consumer protection laws, to the regulator's licensing framework.

It raises the prospect that cases of non-compliance with those rules leading to regulatory fines from the Commission or, in the most serious cases, the revocation of operating licences.

Gambling regulation expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law.com, said the new rules tie in with the Gambling Commission's push to protect consumers.

"Since the speech by Sarah Harrison, the then chief executive of the Gambling Commission, at the regulator's 'raising standards' conference in 2016, the Commission has made a concerted effort to protect consumers, hitting operators with ever increasing fines," Rees-Gay said. "The new requirements outlined make it easier for the Commission to take action if it feels consumers are not being treated fairly."

According to the new LCCP requirements being introduced on advertising, gambling operators must "comply with the advertising codes of practice issued by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) as applicable", and for media not explicitly covered by those codes, "have regard to the principles" included in them "as if they were explicitly covered".

They also face an overarching obligation to ensure their marketing of gambling products and services is "undertaken in a socially responsible manner".

The Gambling Commission has also moved to introduce a new licensing requirement around direct electronic marketing consent. It said the provisions reflect rules contained in the UK's Privacy and Electronic Communication Regulations (PECR).

The new LCCP provisions state: "Unless expressly permitted by law consumers must not be contacted with direct electronic marketing without their informed and specific consent. Whenever a consumer is contacted the consumer must be provided with an opportunity to withdraw consent. If consent is withdrawn the licensee must, as soon as practicable, ensure the consumer is not contacted with electronic marketing thereafter unless the consumer consents again. Licensees must be able to provide evidence which establishes that consent."

The Gambling Commission said it considers the requirement to act 'as soon as practicable' to mean within "hours or days, not weeks".

The regulator promised to work with the Advertising Standards Authority (ASA), which oversees compliance with UK advertising codes, and the Information Commissioner's Office (ICO), which is responsible for enforcement of PECR, to ensure consistent approach is taken to compliance and enforcement.

Compliance with UK consumer rights laws has also been included as a new licensing condition for gambling operators under the reforms. The updated LCCP now requires operators, among other things, to "ensure that changes to customer contract terms comply with the fairness and transparency requirements under the Consumer Rights Act 2015" and to make the terms on which gambling is offered "available to customers in an easily accessible way".

The LCCP was also updated in respect of rules around the marketing of offers so as to make the provisions "more understandable", the regulator said.

Under those rules, gambling providers will be required to ensure their marketing communications, advertisements, and invitations to purchase "do not amount to or involve misleading actions or misleading omissions", within the meaning of the UK's Consumer Protection from Unfair Trading Regulations.

They must "ensure that all significant conditions which apply to marketing incentives are provided transparently and prominently to consumers" and "must present the significant conditions at the point of sale for any promotion, and on any advertising in any medium for that marketing incentive except where, in relation to the latter, limitations of space make this impossible".

The rules also specify how detailed and prominent the information on 'significant conditions' should be.

"Information about the significant conditions must be included to the extent that it is possible to do so, the advertising must clearly indicate that significant conditions apply and where the advertisement is online, the significant conditions must be displayed in full no further than one click away," according to the new licensing terms. "The terms and conditions of each marketing incentive must be made available for the full duration of the promotion."

The revised LCCP also strengthens the Commission's ability to hold gambling operators responsible for non-compliant actions carried out by third parties they engage to provide services for them.

The new rules state that the contracts between the operators and third parties should "require the third party to conduct themselves in so far as they carry out activities on behalf of the licensee as if they were bound by the same licence conditions and subject to the same codes of practice as the licensee", and also impose new disclosure requirements on third parties.

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