Changes to LCCP – Customer Verification

Changes to LCCP – Customer Verification

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.

ID verification: Currently, operators may choose to use a “threshold approach” to verification of a customer’s identity. This means verification is only required once a threshold spend of €2,000 in a transaction or series of linked transactions is met, when a business relationship is established or risk factors are identified. From 7 May, all operators will need to verify the identity of all customers before they can deposit funds or gamble (with their own money or bonus funds), using a third party service or manually using ID documents.

Free to play games: From 7 May, all customers will need to be age verified before they can use free to play versions of gambling games.

Withdrawals: From 7 May, operators will not be able to prevent a customer withdrawing funds on the basis of a requirement for additional information on their identity, if the licensee could reasonably have requested that information from the customer earlier. In some cases (for example where a customer has made a modest deposit but won a large amount for example winning a jackpot prize), the need to carry out enhanced due diligence will only arise at the time of the request to withdraw a large sum of money. The new requirement will not prevent the licensee from seeking information which they are required to obtain at that time due to any other legal obligation, which would in particular cover counter-terrorist financing requirements under the Money Laundering Regulations 2017. Only casino operators are subject to these regulations, however, so non-casino operators in particular should give some thought to the implications of this new provision.

These changes have been foreshadowed for some time, with the formal consultation process beginning in September 2018. Now that they have been confirmed, it is imperative that licensees implement new processes immediately on 7 May (if not before) as the Commission will certainly be undertaking checks and will need little encouragement to act if it finds non-compliant operators.

In a letter to licensees, the Commission stated that it expects operators “to comply with both the letter and spirit” of the provisions.

Fiona Palmer, CEO of GAMSTOP, explained to us that “GAMSTOP welcomes the changes announced yesterday. It will increase the likelihood that someone will be identified if they attempt to gamble while self-excluded as well as providing a more robust and uniform approach to verification at the operator level which can only improve the important work GAMSTOP is doing to help those who are wanting to self-exclude.”

A summary of the changes published by the Commission can be found here. At the time of writing, the new LCCP has not yet been published.

Please let us know if you would like us to advise on any of these changes or assist with updating your policies, procedures or T&Cs.