by Melanie Ellis, Senior Associate

The Gambling Commission has confirmed that proposed changes to the Licence Conditions and Codes of Practice regarding age and identity verification by remote operators will come into effect on 7 May 2019. Licensees will need to ensure they have updated their policies, procedures, systems and customer T&Cs by that date to ensure compliance. The key changes are as follows:

Age verification: Currently, if a customer deposits funds using a credit card they do not need to be subject to additional age verification checks (other than a program of random checks). Operators have 72 hours to complete age verification checks that are required, before being required to freeze an account if checks have not been completed. From 7 May, all customers will need to be age verified (either by a third party provider or manually using ID documents) before they are allowed to deposit funds or gamble, whether with their own money or bonus funds.

On Monday 4 February John Hagan will be moderating a roundtable discussion, hosted by IAGA and Gambling Compliance, about the expanding North America sports betting market and the opportunities for US and international operators alike.  After brief opening remarks provided by Bill Miller, the recently appointed Chief Executive Officer of the American Gaming Association, the distinguished panel will discuss the opportunities and challenges facing the market including the potential impact the revised Department of Justice opinion on online betting could have on the future of online sports betting in the US and whether the legal uncertainty it has created will have a negative impact.

The panel will also discuss the expected scale of the market, likely strategic partnerships, sports integrity, the potential impact of gambling advertising restrictions similar to those being implemented in Europe, and the proactive steps that can be taken by operators to minimise the risk of such implementation.  The interactive roundtable discussion will be followed by cocktails and opportunities for networking. 

Roundtable participants: 

• Adam Greenblatt, CEO, MGM GVC Interactive
• James Kilsby, Vice President – USA, Gambling Compliance
• Louis Rogacki, New Jersey Division of Gaming Enforcement
• George Rover, Managing Partner, Princeton Global Strategies
• Sara Slane, Senior Vice President of Public Affairs, American Gaming Association
• Kresimir Spajic, Senior Vice President – Online Gaming, Hard Rock International

Space for this discussion is limited: please RSVP by Friday, February 1.

If you wish to arrange a meeting with any of the Harris Hagan team during ICE, please contact us directly.

by Melanie Ellis, Senior Associate

Whilst everyone was still recovering from the implementation of the 4th Anti-Money Laundering Directive (4AMLD) into UK law (in the pithily named Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) (the “4AMLD Regulations”), the 5th Anti-Money Laundering Directive (5AMLD) (the “Directive”) was adopted by the European Parliament on 19 June 2018.

EU members have until 20 January 2020 to transpose the Directive into national law. Of course, the UK intends to have left the EU before that time runs out, but the Government has nevertheless confirmed that it will be implementing the Directive with new regulations (“5AMLD Regulations”).

5AMLD makes some amendments to 4AMLD and adds some additional provisions, with a particular focus on preventing terrorist financing. Of relevance to gambling operators, the changes will regulate the use of virtual currencies and increase the level of scrutiny required for transactions from high risk countries. The owners of gambling operators may also want to be aware of new requirements to publish details of the beneficial owners of EU companies.

Responsible Gambling Week takes place this year from Thursday 1 November 2018 to Wednesday 7 November 2018 (#RGWeek18 and www.responsiblegamblingweek.org for full information).

Responsible Gambling Week is a national cross-industry initiative, led by the Industry Group for Responsible Gambling (IGRG), which comprises the trade associations representing all five sectors of the UK gambling industry. For the first time, IGRG will be joined by the Irish Bookmakers Association, so sensibly extending the reach of the Week to Ireland and Northern Ireland. Responsible Gambling Week will have participation from operators from across the entire industry including arcades, bingo clubs, bookmakers, casinos and online operators. By coming together with one voice, coordinating and sharing the same messaging for maximum impact, the UK and Irish gambling industry wants to raise awareness about responsible gambling and stimulate an informed national conversation between operators, staff, customers, their friends and families, industry stakeholders and beyond.

John Hagan and Bahar Alaeddini are attending G2E Las Vegas next week (Monday 8 October 2018 – Thursday 11 October 2018).

On the first day, Bahar will speak on the panel “eSports and its Growing Market for Millennials” which will in part, consider how operators, manufacturers and regulators are approaching eSports and the associated challenges and benefits. The topical discussion will also consider whether the repeal of the Professional and Amateur Sports Protection Act 2012 (PAPSA) in the US will positively or negatively impact eSports. Please see below for full details.

“eSports and its Growing Market for Millennials” 8 October 2018, 2.30pm – 3.15pm at the Sands Expo & Convention Centre – Veronese 2405

Moderator:
Jennifer Carleton (Attorney, Howard and Howard)

Other panel members:
John English (Partner & Managing Director of Sports & Technology, Global Market Advisors)
Jessica Maier (Attorney, MELCHERS)

If you wish to arrange a meeting during G2E Las Vegas, please contact John or Bahar directly.

by Yue-Ting Fung, Paralegal

The Gambling Commission (Commission) is taking views until 27 November 2018 on proposals to amend the LCCP in relation to strengthening age verification for online gambling. The consultation is relevant to all remote gaming and betting licensees and some remote lotteries, with the Commission welcoming views and any supporting evidence or insight from licensees and potential licensees, as well as consumers, members of the public and identity verification solution providers.

The consultation covers one of two policy recommendations on strengthening existing requirements to verify customer age and identity, as outlined in the Commission’s Review of online gambling (March 2018). The first policy recommendation concerning age verification seeks to amend social responsibility code provisions 3.2.11 and 3.2.13 (which broadly provide remote licensees with 72 hours to conduct age verification checks), and instead, will require remote licensees to enact procedures to verify customer age:

• before any money is deposited;
• before the customer is able to access free-to-play versions of gambling games the licensee may make available; and/or
• before the customer gambles with the licensee using either their own money or any free bet or bonus.

by Melanie Ellis, Senior Associate

As you may be aware, changes to the Gambling Commission’s Licence Conditions and Codes of Practice (LCCP) will come into force on 31 October 2018. For the most part, these changes serve to codify things licensees should be doing anyway, but this is a good opportunity to check your business is compliant.

The key changes that you need to be aware of and begin preparing for are as follows:

Fair and transparent terms and practices

Licence condition 7.1.1 has been amended, following the undertakings given to the Competition and Markets Authority (CMA) earlier this year. Amendments to the wording bring consumer notices within the scope of this condition and the following section has been added:

“Licensees must ensure that they do not commit any unfair commercial practices within the meaning of the Consumer Protection from Unfair Trading Regulations 2008, at any stage of their interactions with consumers.”

by Bahar Alaeddini, Partner

The Gambling Commission recently published its long-awaited Raising standards for consumers: Enforcement report 2017-2018. The report, which is the first of its kind, focused on the Commission’s enforcement work under the Gambling Act 2005 over the past year. Licensees were warned that if they failed to adhere to Commission guidance they could expect enforcement action “more swiftly and with greater penalty”.

The last year has seen the Commission become noticeably tougher, handing out penalty packages totalling more than £18 million making non-compliance expensive. Penalty packages are almost always backed up with costly remedial programmes, include public shaming through public statements and require reporting in other jurisdictions. The reverberation is, therefore, far-reaching.

by Bahar Alaeddini, Partner

The Gambling Commission recently published its long-awaited Raising standards for consumers: Enforcement report 2017-2018. The report, which is the first of its kind, focused on the Commission’s enforcement work under the Gambling Act 2005 over the past year. The report “aims not just to review the past year but to also be an industry facing publication building on [the Commission’s] casework and bringing together…published lessons and guidance. It is intended to help ensure compliance and raise standards.” Licensees were warned that if they failed to adhere to Commission guidance (in the report and its public decision notices) they could expect enforcement action “more swiftly and with greater penalty”.

Harris Hagan are delighted to announce that Hilary Stewart-Jones has joined the firm as a Consultant with immediate effect.

Hilary is widely recognised as one of the leading international gaming law and regulatory specialists, with a wealth of experience both in-house and in private practice, having advised on some of the most complex and significant transactions within the online gambling industry. Hilary will undoubtedly be a tremendous asset to the firm and enhance our leading position and reputation in the gambling industry.

Senior partner, Julian Harris, commented “We welcome Hilary and her clients to the firm, and very much look forward to working with her and them”.

If you would like to keep receiving our articles, legal news and details of events at which we will be speaking after the General Data Protection Regulation comes into force tomorrow, today is your last opportunity to opt in to our mailing list. If you’ve not already done so, please click here and complete your details. Our updates have always been of a specialist gambling law and regulatory nature and it is our intention that they will remain so in the future.

If we do not hear from you in the affirmative by the end of the day you will no longer receive our updates, although you can re-join our mailing list at any time in the future by visiting our website. Regardless of your choice, we will still be able to stay in touch with you regarding any matters upon which we are advising you.

Many thanks!

G2E Asia and IAGA Summit

Julian Harris and John Hagan are attending G2E Asia and the IAGA International Gaming Summit this week in Macau, China.

John will be giving the keynote address at the IAGA Summit, on Wednesday 16 May at 10:00am, in which he will consider the social responsibility landscape in the UK. May’s edition of G3 Magazine contains an interview with John given ahead of this address.

GDPR Reminder

If you would like to keep receiving updates from the Harris Hagan Blog after the General Data Protection Regulation comes into force on 25 May, please click here and complete your details.

If we do not hear from you in the affirmative by Friday 25 May you will no longer receive our updates, although you can re-join our mailing list at any time in the future by visiting our website. Regardless of your choice, we will still be able to stay in touch with you regarding any matters upon which we are advising you.

To our valued clients and contacts

We hope that you have enjoyed reading updates from the Harris Hagan Blog and we would very much like to continue sharing with you our articles, legal news and details of events at which we will be speaking. Our updates have always been of a specialist gambling law and regulatory nature and it is our intention that they will remain so in the future.

As you will probably be aware, the General Data Protection Regulation, which comes into force on 25 May, means we need to get your consent to continue receiving communications from us. If you wish to continue receiving Harris Hagan Blog updates, please click here.

Of course, if at any time you decide you no longer wish to receive our updates, you can simply click on the link at the bottom of our emails to change your preferences.

If we do not hear from you in the affirmative by Friday 25 May you will no longer receive our updates, although you can re-join our mailing list at any time in the future by visiting our website. Regardless of your choice, we will still be able to stay in touch with you regarding any matters upon which we are advising you.

Many thanks

Harris Hagan

Harris Hagan is pleased to partner with KnowNow for its Equality, Diversity and Inclusion in the Gambling Industry conference on 22 May 2018, which will be led by the chair of Global Gaming Women (“GGW”) Europe, Bahar Alaeddini. In addition, John Hagan will chair the panel, Creating a culture of diversity throughout the entire organisation, where he will be joined by the following speakers:

• Andrew Bulloss and Caroline Lacey, Odgers Berndston
• Anna Hemmings, CEO, GamCare
• Micky Swindale, KPMG
• Tina Southall, Director of People, Gamesys

Neil McArthur and Sarah Gardner, Executive Directors at the UK Gambling Commission will also be speaking on the panels, A view from a regulator and The benefits of diversity, respectively.

by Melanie Ellis, Senior Associate

There are seven weeks left to respond to the Commission’s consultation on changes to the LCCP’s fair and open provisions. The proposed changes would give the Commission greater powers to enforce compliance with a range of consumer protection provisions in three areas: advertising, unfair terms and customer complaints.

Some of the key effects of the proposed changes are as follows.

Guest post by Maria McDonald of Nordic Gambling

As many are aware by now, Sweden has finally revealed its plans for the long-awaited overhaul of the country’s gambling framework, including a licensing system for online gambling. The products included in the scope of the law are online casino, online poker, online bingo as well as online and land-based betting. The proposed level of taxation is 18 % of the gross gambling revenue.

The government is showing a will to quickly implement the new legislation after years of delay. The legislation is planned to enter into force on January 1, 2019 with the licensing window opening on July 1, 2018.

by Melanie Ellis, Senior Associate

In light of today’s release of new advertising guidance by CAP, the Commission’s ruling against Bwin and the recently published undertakings to the CMA, we thought it would be helpful to summarise the key requirements and changes which operators need to be making to their marketing, and the deadlines for compliance.

Global Gaming Women (“GGW”), Harris Hagan and event sponsor, Reflex Gaming Limited, look forward to welcoming everyone to the gender diversity session at ICE on Wednesday 7 February 2018 at 2pm in the South Gallery Rooms, 13 & 14. The session, which is titled “driving the change from the top”, is becoming more topical by the day.

Our Managing Partner, John Hagan, will moderate the panel, which includes:

• Tracy Damestani, Chief Executive for the National Casino Forum (NCF) and Vice-Chair of the European Casino Association;
• Per Eriksson, CEO at NetEnt;
• Sarah Harrison, CEO of the British Gambling Commission;
• Sarah Sculpher, Chief Marketing Officer at Caesars; and
• Helen Walton, Co-Founder and Marketing Director of Gamevy.

This year’s Global Gaming Women (“GGW”) ICE session will take place on Wednesday 7 February 2018 at 2pm in South Gallery Rooms 13 & 14. The event is being organised by Bahar Alaeddini, who sits on GGW’s Events Committee and Great Women of Gaming Committee, and is leading GGW’s initiative across Europe, and run in partnership with Clarion and its Diversity & Inclusion in Gaming seminar.

Sarah Harrison, CEO of the British Gambling Commission, will deliver GGW’s keynote speech on the benefits of diversity, driving the change from the top and the importance from the Commission’s perspective. The keynote will be followed by a leadership panel with senior executives from the land-based and online gambling industry across Europe. The panel will discuss the state of the industry, lack of women at senior management level, the benefits of gender diversity, commercial drivers, the impact on corporate governance, changing recruitment approaches, new initiatives and joining forces.

Guest post by Jeremy Kleiman of Saiber LLC law firm in New Jersey

For the past 10 years it has seemed as though New Jersey’s bid to overturn the Professional and Amateur Sports Protection Act 1992 (“PASPA”) and regulate sports betting was a longshot. The current case being considered by the Supreme Court is nothing short of a game changer, which could change the face of gambling in the US for both US and international operators.

If we can assist in any way with your understanding of the likely opportunity in New Jersey, a State with a population of nearly 9 million, and your strategy, please do not hesitate to let us know. We have been awaiting the liberalisation of online betting in the US since the advent of the internet, with many false hopes and damaging blows along the way. Could it be that it is now happening under our noses…and fast. Having waited so long, don’t miss the opportunity.

Guest post by Matt Hegarty of Bellaport Systems

What are ‘Return To Player’ statistics?

The UK Gambling Commission (the “Commission”) has a primary objective to ensure that gambling is conducted in a ‘fair and open way’. With respect to remote games, a recent addition to this remit focuses on monitoring Return To Player (RTP) values.

The RTP value is a statistical measurement of how much of the total amount of stakes wagered on a game are returned to the player in the form of payouts. This value is usually expressed as a percentage. For example, a game advertising a 98% RTP value would return 98% of the total amount wagered over a period of time, with the remaining 2% being the margin which is retained by the gaming operator.

It is important to note that the % RTP is an average achieved over a significant number of game plays and not each time the gaming machine is played, and therefore the % RTP value can be volatile over short periods of time. For this reason, RTP is usually measured over thousands of game plays.

by Melanie Ellis, Senior Associate

The Government has today published its response to its consultation exercise on whether bookmakers should continue to be allowed to accept bets on the outcome of foreign EuroMillions draws. The conclusion is that betting on non-UK EuroMillions draws should be prohibited.

There are two primary reasons for this decision. Firstly, the Government is concerned that customers are being misled as to the nature of their transaction. One survey showed that over 60% of participants thought that they were actually buying a ticket for the UK EuroMillions draw, rather than placing a bet on the outcome of a foreign EuroMillions draw. The recent ASA ruling against Lottoland for misleading advertising is also referenced in the consultation.

The second key reason for the Government’s decision is the perceived impact of such products on returns to good causes from the National Lottery. In the year to March 2017, returns to good causes were down 16.9% on the previous year. Declining lottery ticket sales cannot conclusively be blamed on betting-on-lottery products and Lottoland submitted econometric analysis to the Government which suggested that their offering has no statistical impact on EuroMillions ticket sales in the UK. However, the Gambling Commission advised the Government that this was a potential growth area for betting operators and the Government reached the conclusion that introducting the new prohibition was justified on a precautionary basis.

by Melanie Ellis, Senior Associate

At yesterday’s “Raising Standards” conference, George Lusty, Project Director at the Competitions and Markets Authority, provided an update on the ongoing enforcement action against gambling operators. It remains likely that the enforcement process will be concluded by the operators under investigation agreeing to give undertakings not to include certain provisions in their customer terms and conditions, particularly those relating to promotions.

Following the presentation, the Gambling Commission indicated that it would expect all licensees to comply with those undertakings once published, on the basis that they will relate to terms which the CMA considers breach consumer protection law. As soon as the undertakings are made public (and we do not yet have a date for this as we understand the CMA is still in discussions with the operators in question) the Commission proposes to begin reviewing T&Cs and free bet promotions and will take enforcement action against any licensees found to be in breach.

Guest post by Dr Matthias Spitz of Melchers law firm, Germany

According to a German proverb, “before court and on the high seas, one is in God’s hands”. As for the igaming industry, it might be more appropriate to refer to the “devil’s hands”, considering the streak of unfavourable judgments of German courts which the industry has had to endure over the past years. In the epic struggle for the German market for online gambling, the devil apparently struck again on 26 October 2017.

According to an official press release, the total ban on online casino, online poker and online scratchcards, provided for in the German regulatory framework (the Interstate Treaty on Gambling), has been confirmed to comply with EU and constitutional law by the Federal Administrative Court (the ‘Court’). Non-compliance of Interstate Treaty restrictions to online casino, with the freedom to provide services, has been a key argument for lawfully operating in the German market.

Next month, Harris Hagan will be attending the Eastern European Gaming Summit (“EEGS”) in Sofia, Bulgaria. Bahar Alaeddini will be speaking on three panels on 21 November 2017 as detailed below:

1. IMGL Masterclass: The future of affiliate marketing

Bahar will appear on the panel alongside Michele Magro, Senior Legal Adviser from the Malta Gaming Authority, Cosmina Simion, Partner at Nestor Nestor Diculescu Kingston Petersen in Romania, and Assaf Dor, CEO and founder of cellxpert. The panel will be moderated by Jessica Maier, Attorney at Law from Melchers in Germany.

2. Lotteries and key innovations

Bahar will moderate a panel on new technologies in the lottery sector, secondary lotteries and the regulatory landscape. The panellists will include Ed Mouton, Chief Operating Officer of Lottoworx in Malta, Jessica Maier and Johann Gisli Sigurdsson, Chief Operating Officer of Novomatic Lottery Solutions.

3. Global Gaming Women Lean In Circle

New this year, Global Gaming Women (“GGW”) will be hosting a Lean In Circle lunch at EEGS. This follows the success of the Lean In Circle breakfasts at G2E in Las Vegas during the past three years. Men and women can benefit by hearing directly from some fantastic women leaders on how their Lean In Circle has improved their confidence at work and at home. The session leaders will include Cosmina Simion, Rossi McKee, Vice President of Casino Technology in Bulgaria and Jessica Maier.

The lunch will be an interactive question and answer session with dialogue between attendees and leaders and lunch will be provided. Everyone is welcome (men and women), but advance sign-up is required. As Bahar is facilitating the Lean In Circle, please get in touch with her if you would like to attend.

by Yue-Ting Fung, Paralegal

Following the publication of several articles in the UK national press, last Friday a letter was jointly issued by the Committee of Advertising Practice (“CAP”), the Advertising Standards Authority (“ASA”), the Remote Gambling Association and the Gambling Commission. Whilst the letter does not set out any new requirements, it emphasises the importance of existing rules and the need to remove advertisements that appeal particularly to under 18s.

Gambling Commission licensees are advised to amend or remove immediately any advertisements on operator websites or in third party media that are:

• likely to appeal particularly to people aged 17 or younger (“under 18s”); and
• generally available to view (“freely accessible”)

by Francesca Burnett-Hall, Associate

The new national online self-exclusion scheme, GAMSTOP®, is expected to be fully operational and available to consumers by the end of 2017.

GAMSTOP® has been designed by the Remote Gambling Association to aid operators in complying with their responsible gambling requirements and, specifically, social responsibility code 3.5.5 of the Commission’s Licence Conditions and Codes of Practice which sets out that “Licensees must participate in the national multi-operator self-exclusion scheme”. This provision applies to all remote operators who offer consumers online gambling products, other than society lottery operators who do not offer instant win games.

Operators must ensure that they register with GAMSTOP® in advance of the scheme launching. Registration is free and you can sign up on the GAMSTOP® Operator Portal, here.

GAMSTOP® will allow UK consumers to exclude themselves from all online gambling operators licensed by the Gambling Commission by way of a single website registration. Consumers will also be signposted to advice and support services to help them manage their gambling.

Today marks the first day of Responsible Gambling Week, a cross-industry initiative to promote responsible gambling, with the theme “Let’s Talk about Responsible Gambling”. The initiative is organised by the Industry Group for Responsible Gambling (“IGRG”), chaired by John Hagan, and is intended to be a genuine and engaging conversation with customers, the wider public and other stakeholders to raise awareness of responsible gambling.

Responsible Gambling Week is a fantastic opportunity for the gambling industry to raise awareness of what tools are available to help people gamble responsibly, and share information on how to access help and support, for those who need it. What makes this week unique is that it will be the first time the industry has come together to speak with one voice to raise awareness.

Guest post by Maria McDonald of Nordic Gambling

On 31 March 2017, a Swedish official inquiry regarding new gambling legislation was submitted. The inquiry has been unusually well received, and the majority of stakeholders have welcomed the much-needed changes to the market. And indeed, on paper, the suggestions do look promising.

Basic Licence Conditions

Based on the Danish model, the system will allow foreign gambling companies, Svenska Spel (gambling monopoly) and ATG (the Swedish horse racing monopoly) to seek licences for the competitive section of the market. The products included are online casino, online poker, online bingo as well as online and land-based betting. B2B-operators and certain other suppliers will also be obliged to hold licences.

No limitation on the total number of licences has been proposed, and there will not be any application window outside of which new licence applications cannot be submitted.

The proposed tax rate applicable to the competitive sector is 18 percent of the gross gambling revenue.

John Hagan spoke on 7 September 2017 at the KPMG eGaming Summit in the Isle of Man, on the subject of Responsible Gambling Week. The full text of his speech is replicated here.

Harris Hagan will be attending three conferences in the coming month or so.

On 7 September 2017, John Hagan will be attending the KPMG Isle of Man eGaming Summit where he will be presenting on the inaugural Responsible Gambling Week, which will take place between 12 and 18 October 2017. In addition, John will be participating in a timely session on the regulatory and political climate in the UK.

John will also be speaking on responsible gambling at the ‘Social Responsibility’ session at the IMGL conference in Copenhagen on 12 September 2017.

Finally, John and Bahar Alaeddini will be attending G2E in Las Vegas between 2 and 6 October 2017, where John will moderate the IAGA Best Practices: Responsible Gaming for Operators and Manufacturers panel on 2 October 2017 at 4.15pm.

Please get in touch with either John or Bahar if you would like to meet at one of the conferences they are attending.

by Melanie Ellis, Senior Associate

The latest in a series of public statements relating to compliance failings revealed that 888 has been heavily penalised by the Gambling Commission for failing to protect vulnerable customers. The total financial penalty of £7.8m (including a payment of £4.25m in lieu of a fine and £3.5m in reimbursements to customers) represents by far the largest penalty against a licensee to date.

The issues

The Commission considered there was a breach by 888 of three social responsibility code provisions: 3.5.1.1 (self-exclusion), 3.4.1.1(e)(i) (customer interaction) and 3.9.1.2(a) (identification of individual customers). There were two key areas of failings:

guest post by David Collins and Estrellita Ramirez of Dentons

The evolution of the market

It has been widely reported that Colombia, and South America as a whole, are being targeted by major gambling industry players seeking to broaden their geographic reach and attracted by the perceived demand for online gambling services in the region. No doubt, there has been a rapid increase in the number of gambling operators and service providers interested in investing in those markets.

In October 2016, Colombia became the first South American jurisdiction to approve national online gambling legislation. Coljuegos, Colombia’s national regulatory body, believes the market could generate around COP8 bn ( approximately US$ 2.7bn) in revenue during its first year of operation, and that there will be at least seven licensed operators in the local market by the end of this year. To date, Coljuegos has approved one online gambling licensee, Aquila Global Group’s Wplay.co, which commenced its local online operations in June.

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.

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.

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.

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.

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.

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.

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).

by Yue-Ting Fung, Paralegal

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.

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.

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.

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.

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.

In this guest article, Alan Heuston and Sean Dowling of McCann FitzGerald consider the key things operators need to be aware of in relation to the Gambling Control Bill 2013, which sets out the proposed scheme for regulating gambling in Ireland.

10 Things You Need to Know About the Gambling Control Bill 2013

by Melanie Ellis, Senior Associate

The Government has published a consultation on the implementation of the 4th EU Money Laundering Directive (the “4MLD”) into UK law, inviting views on its draft Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The 3rd Money Laundering Directive (implemented into UK law by the Money Laundering Regulations 2007) is restricted to casino operators, but the 4MLD brings all gambling providers within its scope. However, the 4MLD gives Member States the option to exempt certain types of gambling services on the “basis of the proven low risk posed by the nature and, where appropriate, the scale of operations of such services”. The Government has decided to take advantage of this option and has indicated that it intends to exempt all gambling providers, other than casinos, from the requirements of the 4MLD, effectively maintaining the status quo.

by Dhruti Gore, Associate

In 2016 the Gambling Commission addressed the issue of operators’ terms and conditions being fair/open and confirmed that this would be one of its main focuses for the year ahead. This is clearly still an area of utmost importance as demonstrated by two key developments.

In October 2016 the Gambling Commission and the Competition and Markets Authority (CMA) launched a joint initiative to investigate whether online gambling firms are treating their customers fairly. The CMA has now published an update on its investigation which states that in light of the information it has received, it is asking operators to provide additional information in relation to certain issues around free bet promotions. The CMA has expressed its concern that “players may be placing sports bets, which according to the terms of a promotion qualify them for a free bet, only later to be told they are not eligible for the promotion”.

by Melanie Ellis, Senior Associate

Various provisions of the CAP and BCAP codes affect how gambling operators can portray the role of luck in gambling. For example, under CAP code 16.3.15 you must not “exploit cultural beliefs or traditions about gambling or luck” for example by referring to the “luck of the Irish”. Under CAP code 16.3.2 you must not “exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young persons or other vulnerable persons” by, for example, incorrectly suggesting that someone can influence their luck in a certain way.

Last week, the ASA ruled on three different television adverts and one Facebook advert for Unibet, which used the phrase “luck is no coincidence” as a strapline. These adverts were challenged, not in relation to the gambling-specific elements of the CAP or BCAP code (such as those referred to above), but on the basis that the use of this phrase was misleading and/or irresponsible.

John Hagan was interviewed by Totally Gaming in his capacity as Chairman of the Industry Group for Responsible Gambling (IGRG).  You can read the full interview here.

Guest post by Dr Joerg Hofmann, Senior Partner at Melchers Law, Germany, and Immediate Past President of the International Masters of Gaming Law

In an email circulated this Tuesday, the gambling regulator of the German state of Hesse, the Ministry of the Interior, informed the sports betting industry that the toleration regime “has been suspended for the time being”. Notably, the suspension was announced on the last day of the formal toleration application deadline – the decision therefore clearly marks an emergency stop which followed a court order issued by a local administrative court.

Under German administrative laws, a “formal toleration” is a (revocable) promise of the regulators not to enforce against an entity operating without an official licence. It, however, does not entail the legalising effect of an actual, full licence. It appears that the guidelines and requirements for the toleration procedure, which were published by Hessian regulators in late August this year, were detrimentally influenced by third-party-interests – presumably those of the regulators that form part of the Gambling Committee. This committee consists of the leading regulators of the sixteen German states and so far has not really been supportive of modernising German gambling regulation – quite aptly, certain members of the Gambling Committee have therefore even been referred to as “ayatollahs of gambling regulation” in the German press.

by Tom Edmonds, Associate

Harris Hagan is sponsoring and attending two conferences in the next month. Please let us know if you are also attending and would like to meet up.

Bahar Alaeddini will be attending the Eastern European Gaming Summit in Sofia, Bulgaria on 22 and 23 November 2016. She will be speaking twice on 23 November 2016, firstly, at 8.45am on the Global Gaming Women panel and, secondly, moderating the eSports panel at 11am.

Tom Edmonds will be on the panel adjudicating on the ‘Brightest Minds Showcases’ at the iGaming Entrepreneur Conference on 8 December 2016 in London. Harris Hagan will also be sponsoring the conference.

by John Hagan, Partner

and Melanie Ellis, Senior Associate

Gambling Commission sends a clear message to licensees: raise standards or face the consequences

It has been a tumultuous week for the gambling industry. The global news is of course that a casino operator has been elected President of the United States and we await the impact upon the US gambling market with interest, not least upon the slow gathering traction for the legalisation of online sports betting. This is of course long overdue, not least for the protection of consumers, a theme to which we return below. Of more immediate and local interest was the speech by Gambling Commission CEO, Sarah Harrison, in Birmingham to an impressive gathering of those responsible for regulatory compliance across the entire UK gambling industry, including the National Lottery.

by Bahar Alaeddini, Partner

Following the success of the first and second editions published in 2012, and 2014, (of which more than 2,000 copies were distributed worldwide) Julian Harris was asked to act again as General Editor of the third edition of Gaming Law.

The third edition of the publication includes more than 40 jurisdictions and important jurisdictions such as Argentina, China, Portugal, Romania and various US States. Julian co-authored the chapter on England and Wales with Bahar Alaeddini, and Bahar authored the chapter on Alderney. The foreword to the publication is written by Andre Wilsenach, Executive Director of the University of Las Vegas International Centre for Gaming Regulation and former Executive Director of the Alderney Gambling Control Board.

by John Hagan, Managing Partner

We are delighted to announce that Harris Hagan has today been ranked as the top gaming law firm in London in the 2017 edition of the prestigious Chambers & Partners legal directory.

The Firm has been ranked in Band 1 since it was founded in 2004, but for the very first time is named as the only gaming law firm in the top tier of the directory.

We wish to thank our entire team for their exceptional performance. They are deservedly recognised as “excellent lawyers and extremely efficient with extensive legal knowledge”.

Most importantly, we wish to thank our clients for their positive testimonials and continuing business which we value enormously.

We look forward to striving for the same high standards in another exciting and challenging year of legal specialisation in the never dull gambling industry.

Full details are available here.

by Melanie Ellis, Senior Associate

Yesterday (31 October 2016) a new version of the Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) document came into force. The changes are aimed primarily at upholding the first licensing objective, which is to prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime.

The key new requirements on licensees are:

– A requirement to conduct and keep up to date an assessment of money laundering risks to their business. Following this, licensees must put in place appropriate policies, procedures and controls to manage the identified risks.

– A requirement for remote casino operators with their gambling equipment located outside of Great Britain to comply with the Money Laundering Regulations.

– A requirement to report their involvement in any criminal investigations, if the Commission could reasonably be expected to question whether the licensee had taken sufficient steps to keep crime out of gambling.

– A requirement to not place digital advertisements on websites which provide unauthorised access to copyrighted content. Licensee must take all reasonable steps to ensure that third parties (such as affiliates) do not place such advertisements on their behalf. Licensees must also ensure that they can terminate the contract of any third party who places advertisements in this way.

by Melanie Ellis, Senior Associate

Advances in technology and new trends in gaming present challenges for those seeking to determine where new gambling products fit into the regulatory environment. One issue currently being considered is how participating in video games for prizes (eSports) and also betting on the outcome of these games should be regulated. Looking at the recent success of the mobile game Pokémon Go, could augmented reality gambling products be the next big thing?

In this article for Casino & Gaming International Magazine I consider these issues in more detail.

by Yue-Ting Fung, Paralegal

The Commission has published its second consultation and first full review on the Remote Gambling and Software Technical Standards (RTS) (October 2016), since its first publication in July 2007.

The consultation aims to:

• Ensure that gambling is conducted in a fair and open way

• Ensure consumers are provided with clear guidance on gambling products and responsible gambling tools

• Deliver an effective and proportionate framework

• Ensure the RTS is structured in a manner that is clear and accessible

• Reflect the changes to the recently updated testing strategy

by Tom Edmonds, Associate

There has been speculation that websites which provide unauthorised access to copyrighted content, such as illegal file-sharing websites which allow people to download the latest movies for free, are being partially funded by gambling operators advertising on such sites.

The Gambling Commission has expressed concern about this issue and has taken action, by introducing a new licence condition, to obligate its licensees to take responsibility for ensuring their adverts are not placed on sites “providing unauthorised access to copyrighted content”.

by Dhruti Gore, Associate

The Competition and Markets Authority and the Gambling Commission has only just announced its joint investigation on operators’ terms and conditions and now operators find themselves under scrutiny again as the government has launched a consultation on gambling advertising and FOBTs.

The Department for Culture, Media and Sport (DCMS) has launched a call for evidence on gambling advertising, and on maximum stakes and prizes for all gaming machines and their number.

DCMS will look at FOBTs and the potential harm they cause and other rules on gaming machines. The call to evidence will also review measures to protect against gambling related harm including the impacts of gambling advertising and whether the right regulations are currently in place to protect children and vulnerable people.

Minister for Gambling Tracey Crouch said:

“It is important that gambling regulations strike the right balance between allowing the industry to contribute to the economy and enable people to bet responsibly whilst ensuring consumers and communities are protected.”

The consultation review period was launched on 24 October and ends on December 4. The full consultation document can be found here.

by Dhruti Gore, Associate

The Competition and Markets Authority (CMA) has announced it is investigating whether online gambling firms are treating their customers fairly. The CMA is working with the Gambling Commission which has raised concerns about potential breaches of consumer law.

In its press release, the CMA states it is “concerned that players may be losing out as a result of:

• Being locked into complex and strict requirements linked to gaming promotions that are difficult to understand and may be unachievable. These can include terms that require people to play for longer than they had bargained for before they can withdraw money. The CMA is also concerned that players may not be able to withdraw what remains of their deposit, and any winnings, when they want to stop playing.

• Companies having a wide discretion to cancel bets or alter odds after bets have been accepted, because they made a mistake when the odds were first set. The CMA is investigating whether the terms operators rely on in cases such as this are fair.

• Terms restricting players’ ability to challenge a firm’s decision, for example by placing very short time limits on making a complaint or inaccurately suggesting that other means of redress are not available”

by Bahar Alaeddini, Partner

Aimed at ensuring the Gambling Commission’s largest licensees are pursuing licensing objectives effectively, 44 operators submitted annual assurance statements for the first time earlier this year. However, it’s clear that participants have more work to do if they are to provide full and satisfactory responses next time around.

For further details, please see my article here, published recently in iGaming Business.

by Tom Edmonds, Associate

Skins betting attracted a lot of attention because of the large revenues it generated, the fact that the sites on which it was being provided were unregulated and because it was attracting minors. However, there have recently been some major developments which have fundamentally altered the landscape for this form of gambling.

For a full overview of the different types of skins betting, analysis as to whether they are legal and commentary on recent developments, please see my article here, published in last month’s edition of the World Online Gambling Report.