Blog

Changes to Commission’s AML guidance

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

The Gambling Commission is consulting on revisions to its AML guidance for casinos, following the implementation of the new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017(the “MLRs”) on 26 June 2017.

Given that the MLRs are already in force, this is a short consultation and responses must be provided to the Commission by 8 September 2017.

Some of the key changes proposed to the Commission’s guidance relate to:

– the customer due diligence threshold, which is now crossed by any transaction over €2,000, not just depositing or exchanging that amount for chips (for example a large win or series of wins would now be covered);

– the definition of and procedures for dealing with PEPs (politically exposed persons); and

– the fact that the nominated officer role may no longer be outsourced.

The new provisions of the MLRs are discussed in more detail in my recent article in iGaming Business, a copy of which can be found here.

Please get in touch if you would like our assistance with reviewing your AML Policy.

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Resolver: “Putting consumers first”

by Bahar Alaeddini, Partner

by Bahar Alaeddini, Partner

For some time, the Gambling Commission (the “Commission”) has emphasised to the industry the “importance of putting consumers at the heart of business culture and practice.” As part of its own commitment to achieving this, it approached the team behind Resolver to make it available for gambling consumers to use. From 1 August 2017 gambling consumers are now able to raise complaints against operators via Resolver.

Most readers are likely to have heard of Resolver, if only from the recent industry press attention it has attracted. It was first mentioned in the Commission’s March 2017 publication Complaints processes in the gambling industry a review one year after the introduction of the ADR scheme. At the time, and as remains the case, the Commission message was very clear; it wanted to see operators striving for excellence in handling consumer complaints and not merely focusing on meeting legal and regulatory requirements. The recent launch has prompted us to pop up the hood and take a closer look. If you are an avid Harris Hagan blog reader, you may notice that this blog post has been amended in light of a recent Resolver news alert.

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Proposed changes to society lottery codes of practice

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

The Gambling Commission wants lottery operators to be more open with customers as to what proportion of proceeds (ticket sales) go to good causes and which causes benefit. To this end, it has launched a consultation exercise on proposed changes to the Licence Conditions and Codes of Practice which apply to lottery operators.

At least 20% of lottery proceeds must go to good causes, but the Commission has made the point that this should be treated as a minimum rather than a target. As with other areas of gambling, the Commission wants to see standards being raised.

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Gambling Commission to hold second “raising standards” conference

The Gambling Commission has announced its second annual ‘Raising Standards Conference’ will take place on Tuesday 21 November 2017. Last year the news that the Commission would be revising its enforcement priorities was announced at this conference. This year, we anticipate that the focus on consumers will continue, with discussion of the fairness of T&Cs and complaints processes. The Commission has announced that key themes will include the ‘commercial logic of putting the consumer first’ and how raising standards across the industry starts with business leaders.

Last year’s conference was oversubscribed so we would advise reserving a place early and we look forward to seeing you there! You can book a place by contacting raisingstandards@gamblingcommission.gov.uk.

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Harris Hagan attending iGaming Super Show

Harris Hagan will be attending the iGaming Super Show in Amsterdam from 11th – 13th July 2017.

Bahar Alaeddini will be speaking on the panel Regulatory Update: Europe, discussing the regulatory landscape for the alternative lottery market in Europe. This panel is part of the Global Lottery Messenger Forum and is at 9:30am on 11 July 2017.

Tom Edmonds will be speaking on the panel Liability of operators, suppliers and affiliates, discussing how the regulatory burden is increasing for operators, suppliers and affiliates. This panel is part of the IMGL series of seminars and is at 10:30am on 13 July 2017.

Please let us know if you are also attending and would like to meet up for coffee, beer, glass of wine or just a chat to talk through any legal questions you might have in relation to Great Britain, by contacting us at Alaeddini@harrishagan.com or Edmonds@harrishagan.com.

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CMA action against gambling operators – what are the likely consequences?

young man hands holding credit card and using phone

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

Friday 23 June saw the announcement by the Competition and Markets Authority (CMA) that it has launched enforcement action against several online gambling firms. Whilst the list of operators affected has not been made public, it appears that a total of five operators received letters from the CMA on Friday.

The main issues which have led to enforcement action against these operators relate to:

– play-through conditions attached to sign up bonuses, where terms require customers to complete extensive wagering requirements before being allowed to withdraw money, which has raised a concern that customers are being denied “the opportunity to quit while they are ahead and walk away”;

– inadequate or unclear information about the restrictions and conditions that apply to promotions before sign-up, making it difficult for customers to evaluate whether they should take up the offer; and

– potentially unfair rules that restrict certain play strategies, which operators rely on to deny customers a pay-out.

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“Keeping crime out of gambling”: How much do you know about foreign jurisdictions?

european continent marked with flags

by Bahar Alaeddini, Partner

by Bahar Alaeddini, Partner

All Gambling Commission (“Commission”) licensees will unanimously agree that the requirements of being licensed in Great Britain have dramatically increased in recent years. One of the latest changes came on 18 May 2017 with the publication of the second part of the Commission’s Regulatory data collection consultation response document (the “Response”). The Response sets out the Commission’s proposals to change some parts of the regulatory data that licensees are required to provide to the Commission.

One of the biggest changes in the Response is the Commission’s plan to:

• remove the foreign jurisdiction section of the regulatory returns form from April 2018; and
• add a new LCCP key event requiring licensees to report group jurisdictional revenue (date to be confirmed).

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Proposed changes to Remote Technical Standards

by Yue-Ting Fung, Paralegal

by Yue-Ting Fung, Paralegal

Capture1
The Gambling Commission has published its response to its Remote Gambling and Software Technical Standards (RTS) Consultation from last October, which outlines for operators, new and upcoming requirements which will be included in the revised RTS, to be published separately at the end of this month. 

Some key areas of changes include:

– Gambling and account history and net deposits
– Display of Commission licensed status
– Restricted display device  
– Live RTP monitoring
– Play-for-fun games   

Whilst the requirements are not unreasonable, larger operators may find the scale of implementation challenging. Please see the table below for the timescale of implementation.

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ASA reverses ruling against Iron Man advert

Four Lego Super Heroes minifigures on gray baseplate

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

In a surprising, but welcome, move the Advertising Standards Authority has reversed its ruling from August 2016 against an Iron Man themed advert for Ladbrokes casino. In the August 2016 ruling, the ASA noted that considering the character’s “comic book nature, and the availability of various related toys…it was likely to have particular appeal to children and young people”. At that time, the ASA concluded that, notwithstanding that the advert was only sent by email to customers known to be over 18, if the content of it had particular appeal to children or young persons then a breach of the CAP Code 16.3.12 occurred.

Understandably, this ruling (on the back of similar decisions in the past such as those against Mirror casino’s use of the character Optimus Prime in 2012 and 888’s use of Spiderman in 2008) caused concern amongst gambling operators and game developers alike. A large number of slot games use imagery which could be said to appeal to under 18s from well known comic book characters to cute animals and sweets. Whilst the Iron Man ruling was against an advert sent to customers by email, the ASA’s remit does extend to content on an operator’s own website, leaving the design of games themselves subject to criticism.

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Harris Hagan wins “Best Regulatory Law Firm of the Year”

BJC_GalaDinner-Law Firm Harris Hagan

We are delighted and honoured to announce that Harris Hagan won the Award for the “Best Regulatory Lawyer or Law Firm of the Year” at the GamblingCompliance Global Regulatory Awards last week.

This inaugural Award was for a lawyer or law firm which “provides exceptional legal services and guidance to clients in the gambling industry on compliance matters and is a leader on gambling regulation in their practice.”

The founding partners, Julian Harris and John Hagan, have been advising the gambling industry for more years than they care to remember. They are very proud to have created a team of first class specialist gambling lawyers, who provide an exceptional service to the firm’s clients, anticipate their needs and influence law and policy. Winning this award recognises our lawyers for their endeavours.

In true Oscar fashion, we would also like to extend our warmest thanks to our clients and colleagues in the industry for making this possible. We share this Award with them.

Harris Hagan congratulates the other winners of the GamblingCompliance Global Regulatory Awards.

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The heavy cost of misleading advertising

British pound coins on a background of money.

by Bahar Alaeddini, Partner

by Bahar Alaeddini, Partner

On 2 May, the Gambling Commission published its decision following a review of BGO Entertainment Limited’s (“BGO”) remote operating licence. The licence review related to breaches of licence conditions relating to marketing and advertising and BGO was fined £300,000, the first financial penalty imposed by the Commission for advertising failings. This is a landmark decision, demonstrating the Commission’s further strengthening of its focus on consumer protection.

The concerns about BGO’s advertising related to the failure to include significant limitations and qualifications relating to promotions, meaning that adverts were potentially misleading to consumers. These concerns were first raised by the Commission in July 2015 but BGO failed to take prompt and effective action to address the issues, despite providing assurances that it understood the requirements and had taken action to ensure they were met. The Commission continued to find evidence of advertisements on BGO’s own website and third party affiliate websites that were potentially misleading by failing to include significant limitations and qualifications of promotions.

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Gambling Commission reviews complaints processes

businessman is choosing smile on checklist, customer satisfaction concept

by Yue-Ting Fung, Paralegal

by Yue-Ting Fung, Paralegal

‘..the gambling industry’s longer-term sustainability is hugely reliant on trust – a recognition that customers using products and services are valued, respected and treated fairly. Respect in this context [includes]…how [operators] handle complaints…’

The Gambling Commission (the “Commission”) continues to utilise its powers as the competent authority for approving ADR providers for the British gambling industry, to ensure that existing and future providers continue to meet the requirements of impartiality, fairness and independence. Its review document, Complaints processes in the gambling industry (the “Review”), provides an update on the implementation of the ADR scheme after the European Directive on ADR was transposed last year and also takes the opportunity to look more widely at the industry’s complaints procedures.

Using their powers under the European regulations on ADR (the “Regulations”), the Commission has approved 11 ADR providers for the British gambling industry which meet the requirements of impartiality, fairness and independence. However, the vast majority of operators use just one provider, IBAS, meaning that customers are not being given a choice.

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