30Oct

Harris Hagan retains Band 1 ranking in Chambers and Partners

30th October 2020 Harris Hagan 360

We are delighted to announce that Harris Hagan has been ranked in Band 1 of Chambers and Partners UK for the 18^th consecutive year for gaming in the UK, with Chambers describing us as:

“…world class in all areas of gambling law”.

The firm now has five lawyers individually ranked, with partners Julian Harris and John Hagan retaining their Band 1 rankings, and partner Bahar Alaeddini her Band 2.

Francesca Burnett-Hall, an associate, has received her debut mention as an Associate to Watch, with Hilary Stewart-Jones ranked as a Senior Statesperson.

We received many positive testimonials, including:

“The firm excels in what it does. It is highly skilled, supremely well informed about the sector, always responsive and has a consummate ability to translate regulation into effective advice”

“They are top of the league in their depth of knowledge”

“They are very customer service-oriented, approachable and knowledgeable about the industry”

“Julian Harris has a wealth of experience and is able to guide clients through complex issues…”

John Hagan “is a well-respected lawyer who has a wide reach in the industry. He takes time to ensure that he is engaged across the industry and remains focused on the international legal landscape.”

“Bahar Alaeddini is noted for her adept handling of regulatory matters concerning online and land-based gambling.”

“Francesca Burnett-Hall’s practice spans a broad range of online and land-based gambling matters.”

Hilary Stewart-Jones “is just fantastic – you couldn’t wish for better commercial and practical advice.” “I think very highly of the advice given by her, it is excellent. I appreciate her understanding of everything regulatory.”

We wish to thank our clients and friends of the firm for their continued input and recognition of our work.

22Oct

Betting and Gaming Council Announces Game Design Code of Conduct

22nd October 2020 Jessica Wilson 379

On 25 September 2020, the Betting and Gaming Council (“BGC”) announced the new Game Design Code of Conduct (the “Code”). The Code is a product of the industry’s Safer Products Working Group which was formed in January 2020 and tasked with pursuing the opportunity to reduce gambling harm through game and product design.

Compliance with the Code is to be undertaken by BGC members, including where operators use non-BGC game suppliers.

The Code applies to online slot products and is intended to be a “living document, evolving as the research base and understanding around game design continues to develop”. The Code sets out 14 principles to show a commitment to “transparency, player education, innovation and research with the overarching aim of enhancing player safety” which can be categorised into the following areas:

Game Characteristics:	Working with academics, regulators, consumers, individuals with lived experience of gambling related harm and other technical experts to identify and agree on features that are correlated to greater player risk.
Informed Player Choice:	Empowering customers to play more safely through the provision of clearer information on product and game rules, including mathematical properties such as risk, the chances of winning and optimal strategies.
Enhancing Control Innovation:	Improvements in safer gambling tools that help players both monitor and control their gambling, including spend, loss, win and time-based measures.
Governance and Continuous Improvements:	Process for reviewing and updating any Code of Conduct, in addition to transparency, disclosure and independent evaluation.

The Code is divided into two phases:

Phase 1

This phase introduces four standards of game design. The requirements are in line with the Gambling Commission’s recent consultation on online slots game design which aims to make these standards applicable to the whole industry. The Code of Conduct requires BGC members to have the measures in place by 30 September 2020, making BGC members “amongst the first to commit to these standards”.

The four standards are as follows:

1. Minimum game cycle speed of 2.5 seconds

A game cycle starts when a player has paid for an initial wager and depresses the ‘start’ or ‘spin’ button or takes equivalent action to initiate the game and ends when all money or money’s worth staked or won during the game has been either lost or delivered to, or made available for collection by the player and the start button or equivalent becomes available to initiate the next game. Where auto play or auto start is permitted then a game cycle is measured from the point at which the game is initiated by the system (equivalent to the player depressing the start button) to the point at which it is able to automatically start the next game.

2. Removal of turbo play

Turbo play or equivalent features will be not be allowed. Such features enable the player to speed-up the base game cycle speed of the game.

3. Removal of base game slam stops

Slam stops or equivalent features will not be allowed within the base game. This is the ability for the customer to interact with the base game to end it before it has naturally concluded e.g., by hitting or pressing a button whether online or on a physical machine. This includes promotional free wagers paid for by the operator.

4. Removal of multi-slot play within a single gaming client

Functionality that allow players to place multiple, separate stakes on multiple slots games within a single gaming client will not be allowed.

Phase 2

Phase 2 requires BGC members to implement additional measures for new games by 31 January 2021 to “enhance transparency and add friction for players”.

1. Wins below the stake size

Total wins below the stake will be informative and will be differentiated from wins that are equal to or greater than the stake. Specifically:

The win amount will be displayed
- The win line is displayed long enough for player to understand the impact of the bet (in line with existing RTS 7E)
- A brief sound can be used to make the player aware of the result (the return of funds to wallet)

In contrast, total wins equal to or greater than the stake may be celebratory and allow the following elements:

The win amount can be displayed in a differentiating manner e.g., the win display could be in a text size that is greater and could utilise dynamic win animations, for example coin showers
- The win line can be displayed with additional animation permitted
- Celebratory sound effects can be used.

2. Bonus game notifications

Bonus games outside the base game will not be automatically triggered without a customer intervention, e.g., clicking a button to acknowledge that a bonus game has been won and can now be entered. In addition, after the end of a bonus game, the player will receive a notification informing them the bonus game has finished before re-entering the base game. If Auto-play is used during the bonus game, it will automatically stop before re-entering the base game. In the exceptional case that a bonus game is not triggered before the platform would normally time out, the operator has the right to clear down the game with any winnings being added to the player’s balance.

The implementation timeframe of the following two measures will be agreed in the coming months:

1. Access to safer gambling information

While a player is playing a game, the display will include a link to safer gambling information that will be available to view within a prominent place on the gaming client. This will display a safer gambling icon and messaging and contain links to the customer account pages of the operator, with quick links to all limit setting functionality (e.g., deposit, loss, time, timeouts, and self-exclusion).

2. Mandatory player interaction

A mandatory player interaction will be initiated every 60 minutes or at the conclusion of the subsequent game cycle. This will require the customer to acknowledge the message.

The BGC has stated that it may recommend to the Gambling Commission that the Phase 2 measures are adopted as part of the Gambling Commission Remote Technical Standards.

Innovation and Testing Lab

The BGC have created a work programme for the BGC Innovation and Testing Lab to use an evidence-based approach to development of the Code and to inform future changes. The BGC intends to be “transparent in the reporting of findings, methodology and data”.

The Innovation and Testing lab will be focussing on the following projects:

Game labelling – work on creating a consistent safer gambling icon and a common game labelling scheme for key features such as volatility and persistence
Increased staking – work to assess the prevalence of increased staking in slots sessions, whether this behaviours correlates to a risk of harm and how safer gambling messaging can be incorporated to enhance player safety
Auto-play – work on the relationship between auto-play and staking behaviour and whether any risk mitigation is required
Display of net position and elapsed time – work on providing players with quick access to information on their net spend and time elapsed

BGC’s Game Design Code of Conduct has introduced significant changes to the design and functionality of online slots games. The industry should expect to see more changes due to ongoing work in the industry and the awaited Gambling Commission response to its consultation on online slots which closed on 3 September 2020. See our blog on 10 July 2020 for further details. BGC members, and those supplying BGC members, are reminded of the Phase 1 measures were implemented on 30 September 2020.

14Oct

Gambling Industry Code for Socially Responsible Advertising, Sixth Edition

14th October 2020 Ting Fung 371

“From ancient times in China, Egypt and Rome, it has been present as a pastime, affording enjoyment for many, corrupting some and harming not a few…”

Of gods and mortals

In his introduction in the Chambers and Partners Gaming Law Global Practice Guide, Julian Harris writes of Palamedes, the god to which the Greeks ascribed the invention of dice, as well as weights and measures. With the publication of the sixth edition of the Gambling Industry Code for Socially Responsible Advertising (the “Industry Code”), now under the custody of the Betting and Gaming Council (“BGC”), it is this dichotomy of play and balance that is held in mind.

As technology and its consumption changes and continues to advance, consumers across industries are more exposed to advertising than ever, maximising fun but also magnifying potential harm. With the scope of online advertising presenting the greatest influence, and arguably the most risk, it is unsurprising that one of the key areas of update in the Industry Code relates to social media, in respect of marketing and its use to promote consumer awareness.

What licensees need to know

From 1 October 2020, Gambling Commission-licensed operators are required to enforce the following:

Sponsored/paid-for social media advertisements must be targeted at consumers aged 25+. This requirement relates solely to prospecting campaigns where the targeted audience is not already verified through an operator’s own age verification processes;
Given improvements in identification technology if a social media platform can verifiably prove that its age gating systems can prevent under 18s from accessing the gambling advertising content, a possibility exists that the above age filter may be reduced to 18+;
Organic YouTube content produced by an operator as well an operator’s own YouTube channels must be age-restricted to 18+ to ensure users log in to age-verified accounts in order to view content;
Operators should undertake reasonable endeavours to exclude from their paid-for social media campaigns (a) customers with an active self-exclusion or cool-off period and (b) those assessed by an operator as ‘higher risk’;
Operators must use their own social media pages to post frequent safer gambling related information; and
Operators must provide information (in an easily accessible and sufficiently prominent manner) on how customers can limit their exposure to gambling advertising across social media platforms.

In other areas, further changes to the Industry Code include:

Search activity

Search advertisements must clearly contain 18+ messaging in the advertisement copy, along with safer gambling messaging within the core ad format;
The BGC will collate (and regularly update) a shared blacklist of negative keywords, against which no gambling advertising should be served. This blacklist will include keywords that (a) indicate vulnerability and (b) relate to children. Operators must, “in a timely fashion”, incorporate the keyword blacklist into all relevant campaigns where applicable;
These requirements will also apply to any affiliate marketing carried out on behalf of an operator.

Affiliate compliance

All affiliates must be subject to due diligence and PEPS/sanctions checks. KYC checks should also be conducted, wherever relevant.
Affiliates must comply with all relevant regulatory and legislative requirements including CAP’s guidance on ensuring advertisements are obviously identifiable as such. In order to promote consistency, all relevant affiliate ads should be clearly and prominently marked ‘#ad’;
Relevant affiliates must share safer gambling related content on a regular basis with each individual operator with whom that affiliate has an agreement;
It is expected that (a) compliance with the above requirements will be managed by way of contractual obligations imposed by operators and (b) operators will terminate relationships with affiliates that cannot or do not comply, the Industry Code adding that this will be “preferably on a one strike and you’re out rule” basis.

As many will already be aware, ordinary code provision 5.1.8 of the Licence Conditions and Codes of Practice states: “icensees should follow any relevant industry code on advertising, notably the Gambling Industry Code for Socially Responsible Advertising”.

The Industry Code states that it aims for the above changes to “better protect children and vulnerable consumers online”, with BGC Chief Executive, Michael Dugher, further adding:

“We have made excellent progress in recent times and the Industry Code for Socially Responsible Advertising is updated as technology evolves. The latest edition is further evidence of our determination to continue to ensure that standards are rising and are as high as they can possibly be”.

The measures are certainly timely in light of the Advertising Standards Authority’s findings published in August 2020, which revealed that four operators had breached age-restricted advertising rules.

Whistle-blowing at its finest

By contrast, in other avenues of advertising, the ‘whistle-to-whistle’ ban (introduced under John Hagan’s leadership as former Chair of IGRG) has proven markedly effective, with the BGC noting that betting advertisements seen by children has since fallen by 97% and that the amount of gambling advertisements viewed by children has fallen by 70% over the full duration of live sport programmes.

13Oct

KnowNow Digital Conference: Responsible Marketing for Gambling Operators 2020

13th October 2020 Ting Fung 379

Harris Hagan is pleased to join KnowNow again, this time for its second annual Responsible Marketing for Gambling Operators 2020 conference. The digital conference will take place on 15 and 16 October 2020. The focus of the sessions on the first day are on research and regulation, whilst the second day will address digital marketing best practice and protecting the young and vulnerable.

KnowNow has stated:

“This two-day event is a must for anyone interested in sustainable, responsible marketing practices. It is designed to bridge the gap between commercial considerations and operating within a player protection culture.”

Bahar Alaeddini will be moderating a panel debate, What does the future look like for affiliate marketing? How will an affiliate licensing system work and what do we do about the link between affiliates and the black market? on 16 October 2020, from 11.30 – 12.30pm. She will be joined by:

Tom Galanis, Founder and Principal of TAG Media
Clive Hawkswood, Chairman of Responsible Affiliates in Gambling
Brean Wilkinson, Product Advisor at Rightlander

Keynotes will also be provided by Ian Angus (Director of Policy of the Gambling Commission) and Brigid Simmons (Chairman of the Betting and Gaming Council).

With an estimated £200 million spent on TV advertising and £1 billion online by betting companies, the conference aims to provide attendees with guidance and food for thought on how to navigate the regulatory requirements.

Harris Hagan and KnowNow look forward to welcoming you to participate in this timely and important discussion. Register here for your two day digital pass.

09Oct

Gamcare releases first of its kind financial harms toolkit

9th October 2020 Lucy Paterson 349

This week, Gamcare released its Gambling Related Harm: Core Messages and Financial Harm Toolkit, which is aimed at organisations helping customers affected by gambling harm, including gambling operators, financial institutions and debt advice agencies. The toolkit sets out Gamcare’s core messages and draws together information on the various tools customers can be signposted to for assistance controlling their gambling, including safety tips that can be provided to customers who do not wish to stop gambling completely.

The toolkit, which is the result of a cross-sector collaboration initiative by Gamcare and the first of its kind in the UK, is intended to be a comprehensive guide for organisations across the UK to help them recognise, support and refer customers experiencing gambling-related financial harms and provide consistent communications across all points of the customer journey.

The materials draw together best practice and are informed by the experiences both of those who have been harmed by gambling and experts from each sector, in order to tangibly improve customer interactions in future. The toolkit contains referral pathway guidelines tailored to each sector and guidance on training staff to provide them with the confidence to support customers who are impacted by gambling harms.

Gambling related financial harm is an important area of focus for Gamcare, which reports that 70% of callers to the National Gambling Helpline mention some level of gambling debt and/or financial hardship. Gamcare’s progress in this area has now seen eight banks offer customers the option to place blocks and ‘cooling off’ periods on gambling transactions to assist in controlling their gambling.

Gamcare hopes that the toolkit will help frontline staff in key industries provide effective, sensitive support to customers in order to ensure they receive the help they need.

Anna Hemmings, CEO at GamCare, said:

“People struggling with gambling present in different ways and often opportunities are missed to provide the support they need. Ensuring that frontline staff are equipped to help and refer to appropriate support is a huge step in improving the outcomes these customers experience. This toolkit, with the support of businesses, charities and gambling operators themselves, is vital to putting those pathways in place.”

02Oct

Harris Hagan retains Tier 1 ranking in The Legal 500

2nd October 2020 Jessica Wilson 352

We are delighted to announce that Harris Hagan has been ranked in The Legal 500 2021 as Tier 1 for gaming and betting in the UK, being described as:

“without doubt, the premier gaming and betting practice in the UK”.

Once again, partners Julian Harris and John Hagan have both been listed in the Legal 500 Hall of Fame, a notable position reserved for those at the very top of the profession, and partner Bahar Alaeddini has been listed as a Leading Individual.

David Whyte, a senior associate, has also received a debut mention as a Key Lawyer, alongside consultant Hilary Stewart-Jones.

We received many positive testimonials, including:

“Clear, practical advice from enthusiastic people who know the industry inside-out. Harris Hagan are truly leaders in this space.“

“A good lawyer always has the best interests of their clients ahead of anything else. This is Harris Hagan in a nutshell.”

“Harris Hagan are specialists who have a long history of legal assistance, advice and guidance to the gaming industry. They have a broad cross-section of talent within their team and work hard to ensure that they give up to date advice on the constantly moving and often political application of regulation in this area.”

“John Hagan and Julian Harris are two of the most senior lawyers working in this field and they have an international perspective which is essential in the modern business world.”

“Bahar Alaeddini is a focused and common-sense lawyer who excels in the regulatory law field, being able to confidently analyse a given set of circumstances and give straight forward advice.”

“David Whyte is experienced from his background at the UK Gambling Commission and is also a pleasure to work with.”

“Hilary Stewart-Jones is amazing. There’s really nothing more I can say – she is awesome at her job. Very reasonable. Very thoughtful. And always trying to find ways to help us without overcharging.”

We wish to thank clients and friends of the firm for their input and the recognition of our work.

29Sep

“On your marks, get set…” – Fourth National Lottery Competition

29th September 2020 Ting Fung 357

The Fourth National Lottery licence has been in the spotlight since the competition (“4NLC”) was announced in November 2018, with the Gambling Commission reporting “a healthy level of interest from a range of different parties”.

A false start…

However, the 4NLC faced criticism in February this year, when delays to the competition process were announced as a result of the Covid-19 pandemic. The main concern of potential bidders was the fairness of the competition and the perceived disadvantages they faced against existing licensee, Camelot. These included, increased costs and reduced scope for delivery as a result of an uncertain timeframe and potentially shortened transition period between the third and fourth licence. In response, the Commission reiterated that:

“… focused on running a fair and open competition to find the right operator… ensuring that all potential bidders are on an equal footing is very important and we will welcome as many bidders as possible to the competition…”

Where are we now?

The Gambling Commission was also quick to reassure that its below dates are indicative and therefore, also subject to change.

August 2020 to October 2020: First stage – Selection Questionnaire
October 2020 to July 2021: Second stage – Invitation to Apply (“ITA”)
September 2021: Preferred applicant announced
October 2021 to July 2023: Transition period
August 2023: Expiry of third National Lottery licence / commencement of fourth licence

After a three-month delay and the initiation of 4NLC on 28 August 2020, the competition is still in its first stage, with the deadline being 24 days after the launch date. Therefore, potential bidders have until midnight on 1 October 2020 to complete the Selection Questionnaire before the Gambling Commission proceeds to the second stage, the ITA.

What to expect?

In Future of the National Lottery, the Gambling Commission outlines seven key changes to the Fourth National Lottery licence. The overarching themes all reflect the Gambling Commission’s statutory duties on propriety, player protection and returns to good causes, and include:

A more outcomes-based approach, which is in line with the Gambling Commission’s approach to regulating other gambling licences.
Innovation (commercial and technological) which reflects the updated context in which the fourth licence holder will operate.
Increased emphasis on the licensing objectives of fair and open and socially responsible provision of gambling.
Development of the National Lottery brand without compromising fairness or integrity.

Key changes to the licence

Increased player protection
Fixed 10-year licence
Focus on performance
Further incentivising returns to good causes
Commercial and technological innovation
Protecting the National Lottery brand
Safeguarding key features eg, guaranteeing at least one draw-based game, with life-changing prizes, every week

Commission Chief Executive, Neil McArthur reinforced this by adding:

“In line with our outcomes-focussed approach to regulation, we want the next licensee to have greater autonomy to meet the needs of players in 2023 and beyond, whilst ensuring there is clear accountability for the performance of the National Lottery.”

A marathon, not a sprint

The key changes have also impacted on the proposed financial structure of the National Lottery licence operations. This follows criticism in recent years that Camelot’s returns to good causes have not been proportional to their profits. For the period 2019/2020, ticket sales increased by nearly 10 percent to £7.9 billion, of which £1.85 billion went to good causes. Therefore, in an effort to ensure that returns to good causes remain central to National Lottery licence operations, the fourth licence holder will be required to give a fixed sum to the relevant funds for distribution to good causes, as well as a percentage of any profits made. The fixed sum will be established as part of the bidding process.

Consequently, the finish line for bidders extends beyond securing the contract to hold the licence. One industry executive quoted in the Financial Times, called the move a “radical shift”, which would result in the fourth licence holder running the risk of becoming leveraged if they failed to make the requisite sales to deliver the fixed sum. Nevertheless, as the fifth largest lottery in the world, the tender for the National Lottery licence remains one of the UK’s most lucrative public sector contracts.

Raising the bar

In line with the continued regulatory, political and public drive towards safer gambling, it is currently expected that the renewal of the National Lottery licence will coincide with raising the minimum playing age from 16 to 18. The proposed measure was raised by former Digital, Culture, Media and Sport minister, Tracey Crouch in 2018 but did not gain traction. However, Camelot CEO, Nigel Railton, has since agreed that “For 25 years, the age has been 16, so it is probably a good time to look at it.”

Additional details of the 4NLC, including scope and indicators, may be found here.

28Sep

Gambling Commission Consultation Response on Display of Licensed Status

28th September 2020 Jessica Wilson 368

On 30 July 2020, the Gambling Commission published its response to a consultation carried out between 26 February 2020 and 20 May 2020 on proposals to amend licence conditions relating to the display of licensed status on screens from which customers can access remote gambling activities such as websites and mobile apps.

The consultation response confirms that changes will be made to licence conditions 8.1.1 and 8.1.2 and a new licence condition 8.1.3 will be introduced as follows:

Licence condition 8.1.1

All remote casino, bingo and betting licences other than ancillary, host, remote betting intermediary (trading room only), remote general betting (limited) and remote general betting (standard) (remote platform) licences

Licensees providing facilities for remote gambling must display on every screen from which customers are able to access gambling facilities provided in reliance on this licence:
- a statement that they are licensed and regulated by the Gambling Commission;
- their account number; and
- a link (which will be supplied by the Commission) to their current licensed status as recorded on the Commission’s website.
Such statement, account number and link must be in the format, provided by the means, and contain the information from time to time specified by the Commission in its technical standards applicable to the kind of facilities for gambling provided in accordance with this licence or otherwise notified to licensees for the purposes of this condition.
Licensees may also display on screens accessible from Great Britain information about licences or other permissions they hold from regulators in, or by virtue of the laws of, jurisdictions outside Great Britain provided it is made plain on those screens that the licensee provides facilities for gambling to persons in Great Britain in reliance on their Gambling Commission licence(s).

Licence condition 8.1.2

All gaming machine technical, gambling software and host licences

Licensees offering the supply of gaming machines or gambling software on websites must:
- display the following information on the first page of the website which offers gaming machines or gambling software in reliance on the licence:
  - a statement that they are licensed and regulated by the Gambling Commission;
  - their account number; and
  - a link (which will be supplied by the Commission) to their current licensed status as recorded on the Commission’s website.
- display at least the information at a above on each page of the website which offers gaming machines or gambling software in reliance on the licence; and
- where they offer on pages of, or by means of a link from, their website, the supply of gaming machines or gambling software which are not provided in reliance on their licence, clearly distinguish those products which are regulated by the Commission from those which are not.
Such statement, account number and link must be in the format, provided by the means, and contain the information from time to time specified by the Commission in its technical standards applicable to the kind of facilities for gambling provided in accordance with this licence or otherwise notified to licensees for the purposes of this condition.

Licence condition 8.1.3

All lottery operating licences issued to non-commercial societies, local authorities and external lottery managers

Licensees offering the supply of lotteries on websites or mobile applications must display on every screen from which customers are able to access lottery products provided in reliance of this licence:
- a statement that they are licensed and regulated by the Gambling Commission;
- their account number; and
- a link (which will be supplied by the Commission) to their current licensed status as recorded on the Commission’s website.
Such statement, account number and link must be in the format, provided by the means, and contain the information from time to time specified by the Commission

The Gambling Commission has introduced these changes to:

standardise the type of information that must be displayed on B2C and B2B websites and mobile applications about an operator’s licensed status; and
extend the requirements to non-commercial societies, local authorities and external lottery managers offering access to lottery products online.

The changes also align with the Gambling Commission’s ongoing work to redesign its public registers of licensed operators, personal licence holders and premises.

The consultation response confirms that an up-to-date link to its public register will be provided to each licensee. Additionally, the form and manner of the display requirements “will be published before, or alongside, the issuing of new links to public register”.

The Gambling Commission has further confirmed that “when the new links are issued, will allow licensees three months to make the required changes to their websites and mobile applications. Specific dates will be in the letters by which issue the new links to the public register”.

We recommend that all remote licensees read the consultation response and become familiar with the new display requirements which are due to come into effect on 31 October 2020.

23Sep

Thomson Reuters Practical Law: Gaming Global Guide 2020

23rd September 2020 Jessica Wilson 373

Harris Hagan were delighted to contribute again to Thomson Reuters Practical Law: Gaming Global Guide.

The guide provides an overview of gaming regulation in over 40 jurisdictions. Partners Julian Harris and Bahar Alaeddini acted once again as General Editors of the guide, with this being the fifth time that Julian has carried out the role.

The guide is published both in hardback and on Thomson Reuters’ online legal know how service, Practical Law, with a comparison tool to compare information across multiple jurisdictions.

Julian and Bahar co-authored the England and Wales chapter and Bahar authored the Alderney chapter. The chapters provide a high-level overview of the legislative framework of gambling regulation and licensing, gambling products, and recent industry developments.

The guide has been published online and can be accessed on Practical Law through the links above.

17Aug

Consultation Response on Changes to Information Requirements

17th August 2020 David Whyte 385

In our blog of 7 April 2020 we summarised the Gambling Commission’s consultation, launched on 26 February 2020, in two parts, on planned changes to regulatory information and data reporting requirements. On 30 July 2020, the Gambling Commission published its consultation response document (the “Consultation Response”). The Gambling Commission received 70 written responses to its consultation, including 50 from licensees.

We recommend that all licensees read the Consultation Response and new/amended LCCP provisions. We highlight some of the Gambling Commission’s significant changes:

Additional obligations

Licence condition 15.1.3 (reporting of systematic or organised money lending)

This new licence condition requires licensees to provide the Gambling Commission with any information relating to cases where they encounter systematic, organised or substantial money lending between customers.

We discuss this new licence condition in a separate blog.

Licence condition 15.2.2 (other reportable events)

A new requirement that licensees notify the Gambling Commission of any actual or potential breaches by the licensee of the requirements imposed by or under Parts 7 or 8 of the Proceeds of Crime Act 2002, or Part III of the Terrorism Act 2000, or any superseding legislation has been added.

We discuss this new licence condition in a separate blog.

Licence condition 15.2.3 (other reportable events – money laundering, terrorist financing, etc)

This new licence condition requires licensees to notify the Gambling Commission:

as soon as reasonably practicable, of any actual or potential breaches by the licensee of the provisions of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the “Regulations”);
within 14 days of appointment, the identity of the officer responsible for the licensee’s compliance with the Regulations
within 14 days of appointment, the identity of the nominated officer; and
within 14 days of the departure of removal of the above-mentioned positions.

We discuss this new licence condition in a separate blog.

Removed obligations

Licence conditions 13.1.1 and 13.1.2 (pool betting)

The requirement for licensees to notify the Gambling Commission about persons they have authorised to offer pool betting on a track in connection with a horserace or dog race in reliance on an occasional use notice, or to offer football pool betting have been removed.

It is of note that this change does not affect the substance of (existing) licence conditions 13.1.1(2) and 13.1.2(2). Licensees will therefore still be required to produce and retain a record relevant to each pool that they offer and make this information available to the Gambling Commission on request.

Licence condition 15.2.1 (reporting key events)

Various key event notification requirements have been removed. Pertinent removals include:

investments in the licensee other than by way of subscription by shares;
entering into arrangements with third parties for services other than for full value;
changes to the structure or organisation of the business that affect a key position or the responsibility of its holder;
court judgements against the licensee remaining unpaid for 14 days;
issues relating to auditing or the submission of audited accounts;
changes to arrangements concerning the protection of customer funds (this requirement has been moved to licence condition 15.2.2 and is therefore no longer a key event);
customer fund reconciliation deficits;
the receipt from any professional, statutory or other regulatory or government body of the outcome of a compliance assessment;
any change in the identity of the ADR entity or entities for the handling of customer disputes (this requirement has been moved to licence condition 15.2.2 and is therefore no longer a key event); and
the reference of a dispute to an ADR entity, other than one in respect of which contact details were given in accordance with the social responsibility code provision on complaints and disputes.

Licence condition 15.2.2 (other reportable events)

Requirements to notify the Gambling Commission about the conclusion of a dispute referred to an ADR entity and of any outcome adverse to the licensee of proceedings taken against the licensee by a customer in relation to a gambling transaction have been removed.

Other proposed amendments

Licence conditions 15.1.1 and 15.1.2 (reporting suspicion of offences)

These licence conditions have been amended to introduce additional text which will enable the Gambling Commission to specify the form and manner of the reporting of suspicion of offences etc. and to provide clarification on the reporting of suspected breaches of betting rules to the appropriate sport governing body.

The changes also reinforce the principle that responsibility for meeting this licence condition rests with licensees, not third parties. The Gambling Commission notes that while it is acceptable for one licensee to provide information on behalf of another within a group, that ultimate responsibility for the timing and content of the submission rests with the licence holder.

Licence condition 15.2.1 (reporting key events)

Other key event notification requirements have been amended. Amendments of note include:

key events relating to the presentation of a winding up order or petition, entering into administration or receivership, bankruptcy, sequestration, or an individual voluntary arrangement have now been merged into a single key event. This has been expanded to include any person holding a key position for a licensee, group companies and shareholders or members holding 3% or more of the issued share capital of the licensee or its holding company;
the definition of a ‘key person’ in relation to anti-money laundering has been expanded and now covers a position, the holder of which, has overall responsibility for the licensee’s anti-money laundering and/or terrorist financing compliance and/or for the reporting of known or suspected money laundering or terrorist financing activity;
notification requirements about investigations by professional, statutory, regulatory or government bodies into the licensees’ activities have been narrowed to apply to persons in ‘key positions’, rather than to ‘personal licence holders or persons occupying a qualifying position employed by them’;
notification requirements about criminal investigations have been amended and must be reported if it concerns the licensee or a person in a key position and if the Gambling Commission may have cause to question whether the licensee’s measures to keep crime out of gambling had failed;
notification requirements in the event of a breach in the licensee’s information security have been amended. Licensees are now required to notify the Gambling Commission in the event of any security breach to the licensee’s environment that adversely affects the confidentiality of customer data; or prevents the licensee’s customers, staff, or legitimate users from accessing their accounts for longer than 12 hours;
in the case of remote gambling, notification of the commencement or cessation of trading on website domains has been expanded to include domains covered by ‘white label’ arrangements.

Submission of key events

The Gambling Commission has amended the wording in licence conditions 15.2.1 (reporting key events) and 15.2.2 (other reportable events)to include wording that they “are to be reported” via eServices. Key events will therefore no longer be able to be submitted by email unless they have technical issues with eServices (as is often the case!):

If licensees do experience technical issues preventing them reporting key events to us via eServices within 5 days, they should capture evidence of the problems experienced and contact their Licensing Account Manager for assistance.

Ordinary code provision 8.1.1

The Gambling Commission decided not to proceed with its proposals to elevate elements into licence condition 15.2.2 at this stage. The code provision therefore remains in its current form.

Licence condition 15.3.1

The Gambling Commission has harmonised the reporting periods for the submission of regulatory returns, with unified reporting periods across the industry. It has retained the 42-day period for the submission of annual returns for the time being. The regulatory reporting periods are therefore as follows:

Type of return	Reporting period	Submission window
Annual	1 April to 31 March	1 April to 13 May
Quarterly	1 April to 30 June 1 July to 30 September 1 October to 31 December 1 January to 31 March	1 to 28 July 1 to 28 October 1 to 28 January 1 to 28 April

The Gambling Commission received a response about the “stability of the eServices system and a suggestion…to develop an API”, which it is exploring to enable data submission via an API.

Technical scoping work for the harmonisation of reporting periods will start in the Autumn 2020.

Social responsibility code provisions 3.2.1, 3.2.3, 3.2.5 and 3.2.7 (access to gambling by children and young persons)

These code provisions have been amended to allow the Gambling Commission to specify the form or manner of reporting test purchasing results. The Gambling Commission is yet to specify a standardised format for the submission of these results.

Social responsibility code provision 6.1.1 (complaints and disputes)

This code provision has been amended to remove the requirement for routine reporting of the outcomes of complaints and disputes referred to ADR and court proceedings that are adverse to the licensee.

Changes to personal licence conditions

The time within which personal licence holders must report key events to the Gambling Commission has been extended from up to 5 working days to up to 10 working days. Wording has been included that requires all key events to be reported via Personal eServices. Key events will therefore no longer be able to be submitted by email.

The changes come into force on 31 October 2020.

If you would like to discuss any of the issues raised, please do get in touch with us.