14Feb

Betting and Gaming Council Call for Crackdown on Black Market

14th February 2020 Lucy Paterson 419

The Betting and Gaming Council (“BGC”), the single industry group which represents British-licensed gambling operators, has called for the Government to take action against unlicensed gambling operators endangering children.

Analysis conducted for the BGC shows that:

4 in 10 search results for key gambling terms on major search engines are unlicensed black-market operators;
Children are able to access illegal gambling websites, which have no strict ID and age verification measures, unlike British-licensed operators;
There have been 27 million visits from UK IP addresses to black market gambling websites; and
An estimated 200,000 people in the UK have used illegal gambling sites in the past 12 months.

The BGC has called on the Government to ensure that the Online Harms Bill, which is soon to be introduced to Parliament, to crack down on platforms profiting from unregulated operators.

The BGC is particularly concerned to ensure that children and young people are adequately protected from gambling harms by preventing their ability to access illegal websites, which do not employ the same strict age verification measures now required by British-licensed operators.

The scale of the problem facing the government is vast, with the size of the gambling black market in the UK estimated to be worth around £1.4 billion in stakes. Whilst unlicensed websites can block access to their sites by UK IP addresses, such measures are often easily circumvented through the use of a Virtual Private Network (“VPN”).

Michael Dugher, Chief Executive of the BGC, stated:

Search platforms are promoting black market gambling operators for profit – putting British consumers, including children, at risk. None of the UK’s strict licence safeguards are in place on these illegal sites.
Regulated bookies and online operators have a strict zero tolerance approach to underage gambling, yet unlicensed operators are free to prey on vulnerable consumers.
We welcome the government’s Online Harms Bill. But it also provides the government with a chance to clamp down on the black market and help protect punters who want a flutter in a safe environment.”

The campaign for action to be taken to prevent children and young people being able to access illegal gambling sites is not new; in 2018, the Advisory Board for Safer Gambling warned in its paper Children, young people and gambling: A case for action that internet service providers, app stores, search engine companies and other relevant providers should be vigilant to the possibility of third party use of their products to provide illegal gambling to children and young people and proactive in preventing it.

In its response to the paper, the Gambling Commission acknowledged that it “…cannot tackle the risks to children and young people by acting alone…action is needed from Government”. It is hoped by BGC and industry groups that this action will take the form of a crackdown on illegal gambling operators within the remit of the Online Harms Bill.

05Feb

Changing Mindsets

5th February 2020 Harris Hagan 406

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

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

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

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

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

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

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

03Feb

Gambling Commission Consults on Remote Key Equipment Changes

3rd February 2020 Harris Hagan 376

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

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

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

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

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

20Jan

Advice to the Gambling Commission on Actions to Reduce Online Harms

20th January 2020 Bahar Alaeddini 432

The Gambling Commission’s independent advisers, the Advisory Board for Safer Gambling (“ABSG”) and the Digital Advisory Panel (“DAP”) were tasked by the Gambling Commission, with looking at reducing gambling harm online. The Gambling Commission has recently published the advice from both advisers.

Advisory Board for Safer Gambling advice

Summary of key recommendations from the Advisory Board for Safer Gambling’s advice, written in September 2019:

Transparency and evaluation: Making assurance statements public documents with written feedback, creating a data repository and updating the evaluation protocol.
Detection of harms: Requiring licensees to be more transparent about the approaches used to detect harm and mandating minimum standards based on the best practice.
Effective interventions: By using the Implementation Plan for the National Strategy to pilot and evaluate a wide range of harm prevention interventions, creating a mechanism to work with experts by experience to co-create effective harm prevention activities, and improvements to the self-exclusion scheme and return to gambling from self-exclusion. Also partnering with the financial services sector and exploring IP blocking powers to disrupt illegal online gaming.
Game design and product characteristics: Improving understanding on product and game characteristics and their links to harm, banning the use of credit cards, customer information on products and risks, banning reverse withdrawals and using further strong enforcement measures.
Stake, prize and speed of play limits: Planning how a regime could be implemented for online gambling and, unless significant progress is made by licensee on player protection, working with the Government to introduce online limits on stakes, prizes and speed of play.
Marketing and advertising: Exploring technological solutions to reduce exposure for children and vulnerable people (including AdTech to proactively restrict exposure) and advocating a precautionary approach in relation to children and vulnerable people.

Digital Advisory Panel advice

The Digital Advisory Panel, which reports to the Board of the Gambling Commission via the CEO, meets approximately six times a year. Presently, it has six members from a range of technology backgrounds, including the current Managing Director of Twitter UK.

The Digital Advisory Panel’s terms of reference refer to the pace of change in the online gambling industry giving rise to new risks, opportunities and regulatory challenges, which the Gambling Commission must be equipped to face. It is envisaged that the Digital Advisory Panel will assist in this challenge by advising on the digital landscape and emerging trends.

The advice, written in September 2019, refers to the Gambling Commission “challenge” as follows:

“The extent and nature of gambling in GB is being transformed by technology, particularly mobile technology. It is also clear that there is no sign that this growth is going to stop. The initial wave of online gambling characterised by the web, mobile apps and the links to social, is being overrun by a second wave of digital technologies impacting on the industry created by big data, analytics, artificial intelligence, the internet of things and wearables.
The impact of this second wave of digital technologies has yet to materialise fully. These technologies present operators with the opportunity to generate further growth by using the techniques developed by social media and games companies to maintain player engagement with their mobile apps and thereby increase their revenue and profits.”

In its advice, the Digital Advisory Panel refers to Ofcom research suggesting that British people:

on average spend 24 hours a week online, twice as long as 10 years ago;
one in five of all adults spending 40 hours online each week;
check their phone every 12 minutes of the waking day; and
two in five adults first look at their phone within five minutes of waking up, climbing to 65% of those aged under 35.

Summary of key recommendations:

Habit forming apps: Regulating software development for apps and sites that promote addictive and compulsive usage. This might include increasing the ‘friction’ of using this software but will certainly involve consultation with operators and academics.
Developing a single customer view: Requiring large operators to form an “arms-length joint venture” that will provide a service that will consolidate a single customer view for all online gambling activity, with improved interventions for problem gamblers and gamblers at-risk and further research into markers of harm and specific gambling triggers.
Online advertising: Requiring operators to report annually on their progress in directing advertising away from problem and at-risk gamblers, and children.
Gambling Commission operations: Avoiding the temptation to build online or digital technologies to monitor the activities of the operators or gamblers and considering the appointment of commissioners with digital awareness.

The Gambling Commission will host a “kick-off event”, in Birmingham, in February 2020 for industry and technology providers on the industry-wide challenge to find a technology solution to creating a single customer view. We expect that details will be published very shortly.

Following both sets of advice, the Gambling Commission has set tough challenges to the industry and expects to see progress on them by Spring 2020.

19Jan

NHS Concerns Over Gambling

19th January 2020 Bahar Alaeddini 370

On 14 January 2020, the head of mental health services in England, Claire Murdoch, penned a bold letter to the chief executives of BetFred, Bet365, Flutter, GVC and William Hill “regarding the increasingly clear and worrying links between gambling and mental ill health”. She refers to having seen “first-hand the devastating impact on mental wellbeing of addiction” and her concern that the prevalence of gambling in our society is causing harm. In December 2019, a report, Skins in the Game, by the Royal Society of Public Health found that over half of young people believe that playing a video game could lead to gambling and that the link between gaming and gambling is a negative one.

Ms Murdoch expresses her concern of tactics used to target those who are chasing their losses and VIP incentives, and refers to incentives that “appear designed to undermine people’s ability to stay in control: bet to view streaming; pervasive advertising; and rewards in exchange for bets, all are likely to make decision-making for vulnerable people significantly harder.” Her letter also refers to the gambling industry having a responsibility “to prevent the occasional flutter turning into a dangerous habit” and requests provision of “urgent detail on actions” being taken to reduce “the likelihood and severity of gambling addiction”.

The letter ends declaring “n industry-wide effort is needed to tackle this, and…seeking reassurance that taking measures, including the following, to minimise harm:

immediately ban credit card bets from your websites – ahead of the gambling commission’s restrictions due to come into force later this year – helping ensure people don’t spend money they don’t have and potentially rack up life changing debt and the anxiety that comes with it;
stop the targeting of high-loss customers with the so-called ‘VIP’ treatment which includes incentives such as free tickets and bets; and
end bet to view commercial deals which require a stake in exchange for sports streaming access.”

The NHS has also confirmed the opening of a new treatment centre for addiction related mental ill health, alongside the 14 gambling clinics announced in the NHS Long Term Plan last year.

On 15 January 2020, Brigid Simmonds, Chair of the Betting and Gaming Council, responded to Ms Murdoch’s letter stating “e take our responsibility to our customers incredibly seriously and we are determined to raise standards and improve safer gambling.” Ms Simmonds acknowledged the important points raised by Ms Murdoch’s letter and summarised some of the work the members had already done, including new age-verification checks, increased funding for research, education and training, the whistle-to-whistle ban on gambling advertising, the creation of GamStop, extensive work on algorithms to help identify those at risk of harmful play and the very recent waived exclusivity on FA Cup games. She added the current work of the Betting and Gaming Council’s on affordability checks, AdTech to block ad, search engines blocking ads from non-UK licensed operators’ advertising and the Safer Gambling Commitments targeted to:

prevent underage gambling and protect young people;
increase support for treatment of gambling harm;
strengthen and expand codes of practice for advertising and marketing;
protect and empower customers; and
promote a culture of safer gambling.

Ms Simmonds’ letter expressed a keenness to understand in greater detail Ms Murdoch’s experience, knowledge and concerns and how the industry may address them, and ended with an invitation to meet with the chief executives.

17Jan

Raising Standards: Gambling Commission Working Groups

17th January 2020 Michelle French 431

On 2 October 2019, Neil McArthur delivered a speech to CEOs at a breakfast briefing in London in which he looked back at the year, talked about the challenges in the industry and three opportunities to reduce harm:

opportunity 1: game and product design;
opportunity 2: inducements to gambling; and
opportunity 3: advertising technology.

In his speech, he referred to the work of the Gambling Commission’s Advisory Board for Safer Gambling (“ABSG”) and the Digital Advisory Panel (“DAP”), which were tasked with looking at reducing gambling harm online. The Gambling Commission has recently received advice from the ABSG and DAP, which we have reported on separately.

The Gambling Commission announced the formation of three industry working groups:

Safer products: The industry code for responsible product and game design working group: This group is led by SG Gaming and Playtech, and will set out how to produce safer products in the future, techniques to use when designing apps, online games and gaming machine products, the risks associated with each product and mitigation, and a clear explanation of what is unacceptable.
Safer advertising online working group: This group is led by Sky Betting and Gaming, and will consider the opportunities to reduce the amount of advertising seen by children, young people and vulnerable adults, and GambleAware’s recent findings set out in its interim report on gambling adverts online, including social media.
Use of VIP incentives: The incentivisation of high value customers working group: This group is led by GVC and will consider bonuses, hospitality and gifts (particularly for VIPs) are offered in a manner which is consistent with licensing objectives to make gambling fairer, safer and crime free, and identify how existing rules can be strengthened.

All three working groups will work closely with the Betting and Gaming Council.

06Jan

New Year, New LCCP: RET Payments

6th January 2020 Michelle French 391

A new version of Licence Conditions and Codes of Practice (“LCCP”) has been published, which came into effect on 1 January 2020.

The main changes relate to social responsibility code provision 3.1.1 and combatting problem gambling. From 1 January 2020, licensees must direct their annual financial contribution for gambling research, prevention and treatment (“RET”) to one or more of the organisations approved by the Gambling Commission.

Licensees must:

make an annual financial RET contribution to each of research, prevention and treatment;
ensure they donate to one or more approved organisations;
ensure they have no connection to the recipient organisation; and
report information accurately in their regulatory return about the destination of their RET contribution and the amount donated (noting it must not include any duplication of data across multiple licences).

The Gambling Commission does not specify the amount which should be contributed as there is, presently, there is no statutory levy.

As of 26 January 2020, the approved list is as follows:

Organisation	Research	Prevention	Treatment
Action on Addiction
Addiction Recovery Agency
Beacon Counselling Trust
GambleAware
GamCare
Gordon Moody
YGAM

The only organisation that meets all three criteria of research, prevention and treatment is GambleAware. Licensees may donate to more than one organisation and, therefore, split their contribution. Organisations will continue to be added to the approved list. There is no cost for working with the Gambling Commission to be added to the approved list.

Licensees are free to donate to other organisations; however, they will not be recognised by the Gambling Commission under the LCCP as RET contributions.

06Jan

The Gambling Act 2005: “Analogue Legislation in a Digital Age”

6th January 2020 Michelle French 384

The Gambling Act 2005, which came into force on 1 September 2007 before the digital development of smart phones, online gambling and social media, sets out how gambling in Great Britain should be regulated and created the Gambling Commission. In 2005, internet usage was approximately 18%. Today, the figure is over 90%. Other than the monumental Gambling (Licensing and Advertising) Act 2014, which implemented a point of consumption licensing, therefore amending section 36, the Gambling Act 2005 has remained largely unchanged since drafted in 2005.

Gambling was the forefront of many party 2019 election manifestos, with the Conservatives, Labour, Liberal Democrats and the Scottish National Party all calling for reform of the Gambling Act 2005:

Conservatives pledged to “continue to take action to tackle gambling addiction” and stated that “given how the online world is moving, the Gambling Act is increasingly becoming an analogue law in a digital age.”
Labour pledged that they would “curb gambling advertisements in sport and introduce a new Gambling Act fit for the digital age, establishing gambling limits, a levy for problem gambling funding and mechanisms for consumer compensations.”
Liberal Democrats pledged that they would “introduce further measures to protect individuals, their families and communities from problem gambling.” The party stated that they will “introduce a compulsory levy on gambling companies to fund research, education and treatment of problem gambling, ban the use of credit cards for gambling, restrict gambling advertising and establish a Gambling Ombudsman.”
Scottish National Party pledged that they would “support changes to charity lottery law to reduce bureaucracy, maximise returns to good causes and support a full public health inquiry into gambling related harm.”

The review of the Gambling Act 2005 was confirmed on 19 December 2019 in the Queen’s Speech, when Her Majesty declared “my Ministers will develop legislation to improve internet safety for all… he Government will carry out a review of the Gambling Act, with a focus on tackling issues around online loot boxes and credit card misuse.”

Various parliamentary voices have described the Gambling Act 2005 as “analogue legislation in a digital age”. Perhaps the most critical (or loudest?) voices are those of the All Party Parliamentary Group for Gambling Related Harm (“APPG”) which published an interim report in November 2019 on its assessment of the impact of online gambling. The APPG is undertaking evidence sessions, including calling upon the Gambling Commission and the Gambling Minister, to contribute to its final report, which will be published in Spring 2020. Evidence sessions will consider areas such as the age level for purchasing scratch-cards (presently, 16), loot boxes, prize and stake limits, the normalisation of gambling, gambling advertising and the gamblification of sport. The APPG will also include a review of the Gambling Act 2005 in advance of the Government’s review.

The Government review of the Gambling Act 2005 will be published in late 2020.
Additionally, the Social Market Foundation will conduct an independent pre-review report, to be published in Summer 2020, outlining the key priorities which any future review should consider.

03Jan

John Hagan’s Interview @ G2E 2019

3rd January 2020 Harris Hagan 419

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