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Harris Hagan

Harris Hagan

14Apr

Gambling Commission Business Plan 2020-2021

14th April 2020 Harris Hagan Harris Hagan 460

In the midst of the Coronavirus crisis and national lockdown, the Gambling Commission pushed ahead and published its annual business plan for 2020-2021 on 1 April 2020. Clearly, the business plan was prepared before recent events, but Neil McArthur’s foreword heavily referenced current circumstances, including observing an immediate increase in participation in online gambling.

The Gambling Commission did not shy away from reaffirming its commitment to tackling gambling-related harm and holding operators to account by, “if necessary, using powers to suspend and revoke operating and personal licences”.

The business plan outlined five key priority areas, whilst making it clear that “verything do is centred around making gambling safer, balancing the enjoyment people get from gambling and identifying the risks that gambling can present to consumers and the wider public.”  These five priorities are:

1. Protecting the interests of customers

Focusing on new regulatory requirements to make gambling safer, specifically in relation to VIP/high value customers, responsible game and product design and advertising technology.  This follows the recent work of the industry working groups, which we wrote about in our blog on 2 April 2020. 

The Gambling Commission will also advise the Secretary of State on the Government’s review of the Gambling Act 2005.

2. Preventing gambling harm to consumers and the public

Topping the Gambling Commission’s list is the intention to establish, by Q2, an ‘Experts by Experience’ Advisory Board, which will “ensure that the voice of consumers, particularly those who have experienced harm, fully informs decisions right at the heart of the Commission.”  Industry reception to this initiative has been mixed, with Peter Hannibal of GBG describing it as “scary” amid concerns over the potential for a lack of representation from experts whose experience of gambling is positive. John White of BACTA is more welcoming of the initiative, but only if a wide range of players are the experts, not just those who have experienced problems. No details have been published regarding the Board’s constitution.  

The Gambling Commission will also publish an evaluation of its actions to reduce the risk of harm to children and young people, and will review the way that it measures participation in, and prevalence of, gambling. 

Finally, Neil McArthur mentioned in his foreword the single customer view initiative, which, with the use of technology, will aim to tackle the challenge “where operators currently only have a partial view of a customer’s behaviour.”  This follows a two-day event on this subject on 11 and 12 February 2020.  Further details are available here.

3. Raising standards in the gambling market

Raising standards by protecting against threats to betting integrity, developing an improved test-house assurance framework, implementing the Fifth Money Laundering Regulations, and delivering industry events and initiatives to raise standards.

It also intends to make online gambling safer by undertaking targeted action to improve standards in the remote gambling sector, which hints at the Gambling Commission shifting its focus in relation to its regulatory investigations and enforcement action.

4. Optimising returns to good causes from lotteries

The current National Lottery licence, held by Camelot UK Lotteries Limited, ends in 2023.  A key priority for the Gambling Commission is the fourth National Lottery licence competition and “finding the right operator, who will innovate to engage players and protect them, run the National Lottery with integrity and continue maximising returns to good causes to benefit society.”

5. Improving the way it regulates

We very much welcome the Gambling Commission’s intention to improve accessibility to its:

  • digital services, such as eServices; and
  • often painfully slow and inefficient online application system.

How the Gambling Commission expects to achieve this when it is also considering reducing its staff headcount (as reported by the Guardian) is yet to be seen, but we remain hopeful.

It also plans to establish the case for changes to its fees and advise DCMS accordingly (this will no doubt mean increased fees!) and publish clearer documentation on its corporate governance process.

Given the global uncertainty caused by the pandemic, target dates may be subject to change.  The Gambling Commission intends to review the position at the end of Q1, and revise the business plan, where necessary.

Nevertheless, the industry has been warned: “Those who fail to meet expectations will find approach to enforcement getting even tougher than it has been to date.”  Given that we have seen the Gambling Commission’s enforcement work (and financial penalties) increase steadily over the last few years, operators would be wise not to view this as an empty threat.

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27Mar

Government Help for Gambling Businesses

27th March 2020 Harris Hagan Harris Hagan 514

In an effort to help businesses struggling in the face of the global coronavirus pandemic, the Government announced, on 17 March 2020, a business rates holiday for businesses in the retail, leisure and hospitality industries, which is set to last for the next 12 months. However, when the Business Rates Local Authority Guidance was published the following day, it became apparent that the Treasury had specifically excluded casinos, bingo halls and betting shops from the business rate relief by classifying them as financial services.

The Betting and Gaming Council (“BGC”) lobbied the Government in an open letter, advising that its members, which constitute approximately 90% of the betting and gaming industry in the UK, employ over 70,000 people and pay tax of over £3bn, and clearly form part of the UK leisure industry in providing entertainment, food and drink to millions of people every year.  Around 64,000 jobs in the betting and gaming industry are at risk following Government-mandated business closures on 20 March 2020, and the cancellation of football matches and horseracing, which has led to a significant reduction in sports betting.  

In its letter to the Government, the BGC made clear that:

“If there is no change in the Government’s approach, within months many casinos will be insolvent and we run the very risk that permanent closures of betting shops will occur.

…

Without the kind of help that the Government is rightly prepared to offer other sectors, including in other parts of the hospitality, leisure and entertainment industries, there is a real danger that the physical presence of our industry on the high street, in our towns and cities, will be largely wiped out.

Not only is this a sector which provides a leisure activity enjoyed by millions of people up and down the country, but its closure could lead to a migration of gambling to the black market, which is not only unregulated and an unsafe place for people to bet, but it also contributes nothing to the Exchequer or the country.”

The BGC also suggested other short-term measures which could be introduced to help its members’ businesses survive, including assistance with payroll costs, access to loans and additional time to pay taxes and gaming duties. 

Following the BGC’s lobbying, and cross-party support, the Government has now confirmed that the business rates holiday is to be extended to all businesses based in the UK in the retail, leisure and hospitality sector, with casinos, betting shops and bingo halls now forming part of the leisure sector.  Businesses do not have to apply for the business rates holiday; it will automatically be applied to their next tax bill.

Additionally, on 20 March 2020, the Government announced its Coronavirus Job Retention Scheme, which is available to every employer in the UK, large or small.  Under the scheme, employers who have asked their employees to stop working and have designated them as furloughed workers (and notified them of this change in status) can apply for a grant to cover 80% of their wages, up to a maximum of £2,500 per employee per month, enabling the employees to retain their jobs. This scheme is open for three months, initially, and will be extended if necessary. Details of how to claim through the scheme have now been published.

Further help for small and medium sized enterprises is available via the Government’s Coronavirus Business Interruption Loan Scheme (“CBILS”), under which such businesses will have access to loans, overdrafts, invoice finance and asset finance of up to £5m, with no interest payable by the business for the first 12 months. 40+ accredited lenders offer CBILS, which opened for applications on 23 March 2020 and can be accessed by UK based businesses with an annual turnover of no more than £45million, so long as they meet the British Business Bank eligibility criteria. Further details of CBILS are available here.

Larger businesses can seek help through the HM Treasury and Bank of England Covid Corporate Financing Facility (“CCFF”) which will buy the company’s short-term debt in the form of commercial paper.  An explanation of CCFF and its eligibility criteria are available here.

Finally, businesses which pay UK tax and have outstanding tax liabilities may also be able to receive support with their tax affairs via HMRC’s Time to Pay service which has a dedicated telephone helpline on 0800 0159 559.

Further details are available on the BGC’s designated webpage on COVID19.

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21Feb

Four Lawyers Ranked in Chambers Global 2020

21st February 2020 Harris Hagan Harris Hagan 541

Four of Harris Hagan’s lawyers were individually ranked in the global rankings, for Gaming & Gambling, of the prestigious Chambers & Partners legal directory.  For the second year in a row, we are the only law firm, in the world, to have four lawyers recognised in Chambers Global 2020.

Julian Harris was ranked Band 1 and recognised as one of the leading gaming specialists in the UK and a major name in international gaming circles, with peers commenting on his “great reputation” and his “very big standing in the industry.”

John Hagan was also ranked Band 1 and recognised for his “excellent reputation in the industry,” and others saying: “He is at the top of his game.” 

Bahar Alaeddini was ranked Band 3 (previously, Up and Coming) with one source enthusing “she is really good because she’s very efficient and well established.”

Hilary Stewart-Jones was ranked Band 2 and recognised as an “excellent lawyer” and for her deep knowledge and long-established commitment to online gaming.

We always strive for high standards in our exciting and challenging legal specialisation in the never dull gambling industry, and believe we are the market leading law firm.  We are delighted that our work and commitment to the gambling industry is recognised by the prestigious legal directories.

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05Feb

Changing Mindsets

5th February 2020 Harris Hagan Harris Hagan, Responsible Gambling 457

After a marked absence from ICE, Neil McArthur, the CEO of the Gambling Commission, gave a keynote speech at the ICE World Regulatory Briefing, on 3 February 2020, titled “Changing Mindsets”, talking about:

  1. why we need to make gambling safer;
  2. what he sees as the opportunities to make gambling safer and the risks if those opportunities are not taken; and
  3. how he thinks a change of mindset can help – regulators, operators, advisers and suppliers – make gambling safer.

McArthur proclaimed that the gambling industry needed to “be bold”, setting out his case for change and why he considered it to be necessary.  With public trust and participation rates declining, he referred to the “wholly unacceptable state of affairs” with 340,000 problem gamblers and 1.6 million at risk (data published by Public Health in 2016), and declared that these numbers needed to “radically reduce”, necessitating a “comprehensive public health response”.

Unlike previous ICE speeches, this speech appeared to be written for the consumption of the Gambling Commission’s critics, rather than its subjects. 

One of the focuses of the speech was the Gambling Commission’s view of collaboration and the need to look at “complex problems” from “as many different angles as possible”, including those with direct or indirect “lived experience” of gambling related harm.  In response to recent criticism from Carolyn Harris MP, following an earlier speech on collaboration, McArthur addressed the appropriateness of a regulator collaborating with its licensees, clarifying two things: (1) it was not self-regulation; and (2) licensees cannot set or mark their own homework. The fruits of the working groups will be “stress tested” before the next Raising Standards Conference and only the Gambling Commission will decide what regulatory changes should follow in the LCCP or Remote Technical Standards, with advice from the Advisory Board for Safer Gambling, Digital Advisory Panel and insights from people with lived experience of gambling harm. 

The other focus of the speech was the effect mindset can have on performance, citing the performance coach Matthew Syed.  McArthur highlighted too much emphasis being placed on public relations, not addressing the public health issue, and the need for a change in culture by “disrupt old mindsets…to create positive change for consumers and approach the challenges we face in a different way.” He called upon those at the top to change the tone to achieve tangible outcomes and expressed his preparedness “to work with anyone who shares determination to make rapid, positive changes to protect consumers from harm.”

Although abundantly clear already, McArthur spelt out that only the Gambling Commission will judge whether efforts adequately address harm to consumers and, if not, all options will remain on the table, with the Gambling Commission getting “tougher and tougher”.  He stated that “the time to think of this as a competition between ‘poachers’ and ‘gamekeepers’ has gone…We each have a different part to play, but that must be our goal. If that isn’t anyone’s goal they need to leave the industry.”

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03Feb

Gambling Commission Consults on Remote Key Equipment Changes

3rd February 2020 Harris Hagan Harris Hagan 430

All online gambling businesses providing facilities for gambling have remote gambling equipment, known as “key equipment”.  This is recorded in Schedule R of their Gambling Commission remote operating licence. 

On 30 January 2020, the Gambling Commission published a consultation on the removal of the variation application and notification requirements in relation to key equipment. The consultation proposes that licence conditions 2.1.1 and 15.2.1(7) of the Licence Conditions and Codes of Practice be removed entirely so that operators will no longer need to notify the Gambling Commission of any changes to key equipment, either by way of a key event or an application to vary. 

Currently, if a gambling business wants to relocate their key equipment to a different jurisdiction, they are required under licence condition 2.1.1 to apply to vary their remote operating licence.  The key equipment must not be moved until the application has been granted and an amended remote operating licence issued, which can take several weeks. Additionally, where a gambling business moves key equipment within a jurisdiction, this must be reported as a key event under licence condition 15.2.1(7).  The Gambling Commission’s rationale was so that it could physically inspect the key equipment; however, it has acknowledged this is rarely needed, particularly as many gambling businesses have moved to the cloud.  

The requirements are complex, with most not understanding them, particularly when involving aggregation platforms and other suppliers.  In many cases, Schedule Rs have 100s of entries and run to 10s of pages.  Also, the requirements are hugely burdensome for operators and suppliers, often causing business disruption needing to wait for determination by the Gambling Commission.  They are also burdensome for the Gambling Commission, with the effort required not reflected in the £25 application to vary fee.  

Licence condition 2.1.2 will remain in place and will continue to allow the Gambling Commission to access remote equipment and/or request copies of data held on the equipment, which it considers is all it now requires. The consultation closes on 26 March 2020 and it is proposed that the changes should come into effect in July 2020.  Responses to the consultation can be submitted here and we strongly recommend all online gambling businesses to respond with support for the Gambling Commission’s proposals.

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03Jan

John Hagan’s Interview @ G2E 2019

3rd January 2020 Harris Hagan Harris Hagan 479

Jan Jeffcoat interviews John Hagan at the Play+ Media Booth at Global Gaming Expo (G2E) in Las Vegas on 16 October 2019.

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    Contact

    Hamilton House
    1 Temple Avenue
    London
    EC4Y 0HA

    +44 (0)20 3334 8225

    [email protected]

    Legal notice

    Harris Hagan is authorised and regulated by the Solicitors Regulation Authority (SRA number 00401231)

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