23Apr

Gambling Commission issues industry warning notice on regulatory returns submission

23rd April 2025 Tiffany Babayemi 27

On 17 April 2025, the Gambling Commission issued an industry warning notice to licensees regarding timely submission of regulatory returns. The warning follows a series of fines issued against licensees who have failed to submit a regulatory return by the deadline, and reminds licensees that they face regulatory action if they fail to complete or submit regulatory returns on time.

The industry warning notice notes that since October 2024, more than 10 businesses have been fined up to £750 for not correctly completing and submitting regulatory returns within the required timeframe.

John Pierce, the Gambling Commission’s Director of Enforcement, said:

“Despite early engagement and the issuing of advice notices, further failures to comply with the regulatory returns process were identified in these cases. Operators are expected to understand their reporting obligations and must ensure returns are submitted on time via our online portal.”

“Repeated breaches and persistent non-compliance is likely to result in escalating enforcement action.”

We take this opportunity to remind licensees of the key requirements for regulatory returns.

Requirement of submission

On 1 July 2024, licence condition 15.3.1 of the Licence Conditions Codes of Practice was updated to require all licensees to submit accurate regulatory returns on a quarterly basis, and to align the reporting periods as follows:

Quarter one – 1 April to 30 June
Quarter two – 1 July to 30 September
Quarter three – 1 October to 31 December
Quarter four – 1 January to 31 March.

All returns must be submitted within 28 days of the end of the quarterly period. If a licensee has ceased trading in a licensed activity, or has not yet started to trade but still holds a valid licence at the time a return is due, it must submit a ‘nil’ return. A separate return must be submitted for each licence type.

The next due date

The next quarterly regulatory returns are due by 28 April 2025.

How to submit

Regulatory returns need to be submitted via the eServices digital service on the Gambling Commission’s website.

Late or inaccurate regulatory returns

Under section 342 of the Gambling Act 2005, a licensee commits an offence if it misrepresents or fails to reveal information that it is asked to provide, unless it has a reasonable excuse. The Gambling Commission may prosecute licensees which provide information which is false or deliberately misleading. Where returns are submitted late, are incomplete or inaccurate, the Gambling Commission will contact the licensee. If the licensee does not submit an up-to-date, accurate regulatory return after the Gambling Commission has contacted them, there is a risk that the Gambling Commission will refer the matter to its Enforcement Team.

Next steps

We encourage licensees to set reminders to submit their regulatory returns on time, and ensure the accuracy of their returns. Further information on regulatory returns can be found in the Gambling Commission’s regulatory returns guidance and published updates on the changes to regulatory returns effective 1 July 2024.

Please get in contact with us if you have any questions about your regulatory returns or if you would like assistance with any compliance or enforcement matters.

11Apr

White Paper Series: Gambling Commission publishes statutory levy guidance

11th April 2025 Harris Hagan 45

On 7 April 2025, the Gambling Commission published its guidance on the statutory levy and how licensees can prepare for it. The Gambling Levy Regulations 2025 (the “Levy Regulations”) took effect on 6 April 2025 and introduced a mandated levy on all operating licence holders in Great Britain to fund research, prevention and treatment of gambling harms. Please refer to our previous blog, White Paper Series: Statutory Instrument published for statutory levy, for further details of the Levy Regulations.

The Gambling Commission’s guidance sets out snapshot information on the statutory levy, including:

Who will collect the statutory levy

The Gambling Commission collects the levy on behalf of the Department for Culture, Media and Sport.

Who must pay the statutory levy

The levy will be charged to all gambling licensees. However, licensees are not required to pay the levy where the amount of that levy is £10 or less (for a given period).

How the statutory levy is calculated

The levy will be charged at a set rate for all Gambling Commission licence holders, ranging from 0.1% – 1.1%.

The basis and rate to be paid will vary depending on the licensed product (see the statutory levy rates by licence product table). The basis will be from the following list, as appropriate:

Gross Gambling Yield
proceeds retained after good causes and prizes paid out
gross value of sales or any amounts that will otherwise accrue to the licensee in connection with activities authorised by the licence.

The calculation for the amount owed under the statutory levy is based on the data that licensees provide via Regulatory Returns. The guidance reminds licensees of their obligation to provide ‘true and correct’ data, and any incorrect data submitted would impact the calculation of the amount owed by levy.

When licensees need to pay

Licensees must not pay the statutory levy until they receive their invoice.

The first invoices will be issued on 1 September 2025, with payment required on or before 1 October 2025.

The levy will then be invoiced annually on 1 September and will cover the period of 12 months beginning with 1 April.  

How to pay the statutory levy

Invoices will be issued to licensees by email (not via eServices) and payment can be made using GovPay or Bank Transfer.

Statutory levy payments must be paid in full by 1 October, and in line with the details on the invoice. Full details of how to make the payments will be provided by the Gambling Commission before September 2025.

Consequences of not paying the statutory levy

Payment of the statutory levy is a licence requirement, and therefore non-payment, or late payment, of the levy by the licensee will result in revocation of the operating licence. 

Removal of voluntary RET Contributions

Following the announcement of the introduction of the statutory levy, the Gambling Commission responded to the consultation proposing to amend the Licence Conditions and Codes of Practice to remove the requirement for licensees to make a voluntary annual financial contribution to one or more organisation.

Accordingly, as of 31 March 2025, licensees are no longer required to make annual financial contributions to research, prevention and treatment due to the levy’s introduction.

Next steps

Licensees can prepare for the statutory levy payment by ensuring:

regulatory returns data is submitted correctly and on time,
the Gambling Commission holds the correct contact details (i.e. email address) for your organisation, and
payment is only made once an invoice has been received.

Please get in touch with us if you have any questions about the Levy Regulations or the Gambling Commission’s guidance on the statutory levy.

10Apr

A spotlight on the statutory levy: Government Committee examines gambling harm evidence

10th April 2025 Tiffany Babayemi 49

On Wednesday 2^nd April 2025, the Health and Social Care Select Committee examined the current gambling landscape and the potential for harms caused by developments in gambling products in a one-off oral evidence session.

The Government has noted that it wants to facilitate a “cultural shift” in the understanding of gambling-related harms to reduce stigma associated with getting help. During the session, MPs discussed what is needed to develop an effective public health response to gambling-related harms, and the Government’s role in leading and delivering this work. As part of their questioning, the MPs asked witnesses’ views on what role public health teams need to have within wider local authority services to reduce potential for gambling-related harms, and whether they think the current rules sufficiently safeguard children and vulnerable people from gambling-related harms.

In the session, a key topic of discussion was how the introduction of the statutory levy could have a notable and positive impact on reducing gambling harms. The statutory levy, which was announced by Government in November 2024, and took effect through The Gambling Levy Regulations 2025 on 6 April 2025, provides, for the first time, a dedicated statutory investment to fund research, education and treatment of gambling harms. Since its introduction on 6 April 2025, the Gambling Commission is now responsible for collecting and administering the new levy, under the strategic direction of the Government.

During the session, MPs posed questions on the commissioning of effective treatment and prevention services in the context of the statutory levy and the role of the Gambling Commission in regulating the industry.

Some noteworthy comments from the session:

Professor Sam Chamberlain, Professor of Psychiatry, University of Southampton and Director of the Southern Gambling Treatment Clinic:

“We have an opportunity with the levy— provided that the funds are administered in a way that is ringfenced and protected from conflicts of interest and industry—to really make a difference by doing some good-quality research and rolling out public health interventions that actually help.”

Professor Heather Wardle, Co-Chair Lancet Public Health Commission on Gambling and Professor of Gambling Research and Policy, University of Glasgow:

“We do not have a nationalised monitoring system for harms. We do not understand how many people who are interacting with the criminal justice system or the NHS are experiencing harms, because we do not have that infrastructure available to us. Again, with the levy, there is an opportunity to develop that. I absolutely think that that is where we need to be investing some of our resources, because once you have that infrastructure, you have the insight. It provides the bedrock of excellent research and enables you to go forward.”

Andrew Vereker, Deputy Director for Tobacco, Alcohol and Gambling, Office for Health Improvement and Disparities:

“Through our health mission, we are committed to shortening the time spent in ill health by preventing harms before they occur. In that context, I think the levy is a real opportunity, as the previous panel said, to improve treatment, to enable high-quality research and to support effective prevention activity.”

Tim Miller, Executive Director of Research and Policy, Gambling Commission:

“The Gambling Act is clear that levy funding has to be used for purposes in connection with the licensing objectives in the Act.”

In a statement made by Stephanie Peacock, Minister for Sport, Media, Civil Society and Youth, it was clarified that 30% of the levy funding will be allocated to the prevention of gambling harm in Great Britain, which is up to £30 million each year, alongside the significant funding allocated for research and treatment.

If you wish to find out more about what was discussed in the session, we invite you to watch the session or read the transcript.

Please get in touch with us if you have any questions about the oral evidence session or the statutory levy.

09Apr

Gambling Commission publishes update on emerging money laundering and terrorist financing risks

9th April 2025 Harris Hagan 44

On 8 April 2025, the Gambling Commission released a publication on the emerging money laundering and terrorist financing (“ML/TF”) risks. Under licence condition 12.1.1 of the Licence Conditions and Codes of Practice (the “LCCP”), licensees must keep up-to-date with emerging risks information published by the Gambling Commission, and ensure their ML/TF risk assessments and related policies, procedures and controls are reviewed and revised appropriately to ensure that they remain effective.

The publication identifies the following 13 emerging risks and what licensees need to do.

Money service business activity in remote and non-remote casinos

Some remote and non-remote casinos offer money service business (“MSB”) facilities, which include foreign currency exchange, third-party cheque cashing and third-party money transfer (into and out of the casino).

The Gambling Commission is aware of casino customers attempting to deposit large denomination notes of foreign currencies (including €500 notes) into casinos. It is noted that the HMRC guidance on Understanding risks and taking action for money service businesses states the sale of high value notes, in any currency, entails a significant money laundering risk and any request to buy or sell €500 notes or quantities of other high denomination notes should be treated as high risk. Similarly, HM Treasury’s UK national risk assessment of money laundering and terrorist financing report states that criminals have been known to use currency exchange services to convert criminal cash into high denomination foreign currency notes.

The Gambling Commission surveyed the MSB activity offered by casinos and noted a reduction in the number of casinos offering MSB activity, as well as a reduction in the number and value of MSB transactions. However, numerous high-value transactions are still completed via MSB facilities in casinos, and the Gambling Commission’s ML/TF risk assessment (“Risk Assessment”) still rates MSB activity within casinos as high risk.

The Risk Assessment also identifies other risks linked to MSB activity, such as (i) payments received from politically exposed persons (“PEPs”) or persons appearing on financial sanction lists, (ii) customers buying in using a number of different payment methods, (iii) high reliance on due diligence information from third party due diligence providers, (iv) funds transferred into accounts from unknown sources, and (v) funds transferred from unlicensed MSBs.

What licensees need to do:

Casino licensees must conduct an appropriate ML/TF risk assessment and, where MSB activity is offered, an assessment of the ML/TF risks associated with the MSB activity offered must be included. Licensees must implement appropriate controls to prevent ML/TF and review these regularly to ensure they remain effective.
Where foreign currency exchange services are offered, licensees must have appropriate controls to address the risks associated with large denomination notes.
Due to the risks associated with MSB activity, customers using MSB facilities offered by casino licensees are expected to be treated as high risk, and are subject to appropriate enhanced customer due diligence measures, as outlined in the Gambling Commission’s guidance on the prevention of money laundering and combating the financing of terrorism.
Licensees offering MSB facilities must also review and consider HMRC’s MSB guidance.

Artificial intelligence used to bypass customer due diligence

The Gambling Commission notes the increase in the scale and sophistication of attempts to bypass customer due diligence checks using false documentation, deepfake videos and face swaps generated by artificial intelligence. As noted by the National Crime Agency (“NCA”) in issue 30 of their SARs in Action publication, accounts successfully created using AI are more likely to be used for criminality, such as money laundering or terrorist financing.

What licensees need to do:

Consider all information they hold on a customer and, where documents are received from a customer, ensure that these documents are appropriately scrutinised.
Ensure staff are appropriately trained to assess customer documentation, including how to identify false and AI generated documents.
If a customer has submitted a false document, licensees should consider the Gambling Commission’s guidance about what licensees must do in that situation.
When submitting a SAR in relation to AI generated documents, the NCA has requested that the reference 0752-NECC is included in the relevant field. Please see the SARs in Action publication for more information.

Money in exchange for personal details and gambling accounts

The Gambling Commission has been made aware of consumers being targeted by companies who offer money in exchange for personal details to open multiple gambling accounts in the customer’s name. Consumers are directed to upload their documentation which is then used by the third-party to open large numbers of gambling accounts. Customers are promised a financial reward in exchange for their personal details and documents, but there are reports of customers not receiving the money promised to them. Customers are also told that the documents will be treated securely, however, there is a concern that the documents may be used for other purposes or sold on.

The Gambling Commission identified the risk that those gaining access to other people’s information and using it to gamble may be acting as unlicensed betting intermediaries. The Gambling Commission is also concerned about the risk of illicit mule account activity with accounts opened in this way.

What licensees need to do:

Proactively review their processes for ID verification on a regular basis to ensure they remain effective.
Take immediate action when any gaps are identified or when learnings suggest improvements are required to tighten processes.
Have robust customer due diligence and onboarding checks in place.
Consider whether checks on ID documents are sufficient to identify false, stolen or ‘mule’ (third party) IDs, in accordance with LC 17.1.1.(1) and (4) of the LCCP which states that:

(1) Licensees must obtain and verify information in order to establish the identity of a customer before that customer is permitted to gamble. Information must include, but is not restricted to, the customer’s name, address and date of birth.

…

(4) Licensees must take reasonable steps to ensure that the information they hold on a customer’s identity remains accurate.

Third-party business relationships, including white-label partnerships and investments

The Gambling Commission is aware of licensees failing to apply sufficient due diligence measures in relation to their third-party business relationships, including white-label partnerships and monies coming into the business in the form of loans or other investments. White-label partnerships and business investments have both been noted as high risk within the Gambling Commission’s latest Risk Assessment.

What licensees need to do:

Ensure that they have appropriately risk-assessed their dealings with third-parties, including white-label partners and any entities providing loans and/or investments.
The assessment of these risks should include consideration of the risks posed by the jurisdictional location of their third-party, transactions and arrangements with business associates, and third-party suppliers such as payment providers and processors, including their beneficial ownership and source of funds. Effective management of third-party relationships should assure licensees that the relationship is a legitimate one, and that they can evidence why their confidence is justified.
Consider risks to the licensing objectives in their due diligence on white-label partners. This would include giving consideration to any activity the third-party is involved in outside of GB that the Gambling Commission considers medium or high risk, as defined by the Gambling Commission’s Risk Assessment, as well as activity that is illegal in either Great Britain (“GB”) or the territory in which it is conducted.
When accepting loans into their business, licensees are reminded of LC 15.2.1(3) of the LCCP (Reporting key events) and the licensing objective to prevent gambling from being a source of crime or disorder, being associated with crime and disorder or being used to support crime. The Gambling Commission is also able to request additional information about any loans or other money coming into the business, as per the Licensing, compliance and enforcement policy statement.

Open-loop payment processes

In the Gambling Commission’s latest Risk Assessment, it noted that a ‘lack of closed loop’ payment system is high risk. The Gambling Commission is aware of some licensees (particularly non-remote betting operators) still operating open-loop payment processes.

Open-loop payment systems are a known money laundering risk as they allow the transfer of funds from one payment method to another, which can be used to disguise the origin and/or destination of funds. There is also a risk that criminals use open-loop systems to gamble with fraudulent or stolen cards.

What licensees need to do:

Closed-loop systems are strongly recommended and considered best practice for licensees. Closed-loop systems mean licensees process customer withdrawals and winnings to the same payment method that was used for the deposit.
Where licensees continue to operate an open-loop payment system, they must include this risk within their ML/TF risk assessment and implement appropriate and effective controls to prevent ML/TF.

Licensed software providers’ games available on websites not licensed by the Gambling Commission

The Gambling Commission is aware of casino games that have been developed by software licensees becoming available on unlicensed websites, and accessible to British consumers illegally. As such, licensees conducting business (either directly, or indirectly through third-party resellers) with websites that are operating illegally are at risk of accepting funds derived from criminal activity.

What licensees need to do:

Gambling software licensees must consider their obligations to uphold the licensing objectives, including preventing gambling from being a source of crime or disorder, being associated with crime and disorder or being used to support crime.
Casino host licensees are additionally required to comply with LC 12.1.1. of the LCCP (including the requirement to conduct a ML/TF risk assessment and implement appropriate controls), as well as the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and the Gambling Commission’s guidance for casino operators.
Licensees are advised to actively monitor their business relationships to ensure that partners are not offering illegal gambling facilities to the GB market. Where such non-compliance is identified, licensees must terminate these relationships immediately.
It is crucial to also engage proactively with the Gambling Commission when such activity is detected, providing details of the preventative measures taken to ensure the activity ceases without delay. Actively notifying the Gambling Commission and presenting a clear and prompt plan to mitigate the issue is a minimum requirement. Licensees should also note the Gambling Commission’s Industry warning notice: licensed software appearing on illegal market.

Cryptoassets

The Gambling Commission is aware of an increasing interest in cryptoassets (also known as crypto currencies) within the licensed gambling industry, and rates cryptoassets as a high-risk payment method. As noted by HM Treasury in the UK national risk assessment of money laundering and terrorist financing report (chapter 8), cryptoassets present several vulnerabilities from a ML/TF perspective.

The Gambling Commission is also aware of a large theft of cryptoassets from the ByBit exchange which took place in February 2025. The group alleged to be responsible for the theft are suspected of using complex online money laundering systems which, in the past, have been thought to include remote gambling licensees around the world.

As cryptoassets potentially become more prevalent, the Gambling Commission expects that more payment providers will offer crypto payment facilities.

What licensees need to do:

Have a full understanding of the services provided by their payment providers, as the use and/or acceptance of cryptoassets presents challenges.
Pursuant to LC 12.1.1(1), ensure ML/TF risk assessments consider the risks their businesses face upon the introduction of new products or technology or new methods of customer payment.
Submit a ‘Key Event’ to the Gambling Commission under LC 15.2.1(8) wherever there are changes in payment methods.
When customers indicate their funds to gamble have come from cryptoasset trading or other means linked to cryptocurrencies, it is the Gambling Commission’s expectation that this feeds into a customer’s risk profile as a high-risk indicator, with completion of sufficient due diligence.
Be mindful of the recent theft of cryptoassets (as mentioned above) and consider their vulnerabilities and controls in this area. Please see further information on the Gambling Commission’s position on crypto-assets here.

Terminals used to facilitate payments in non-remote casinos

The Gambling Commission is aware of several types of terminals used to facilitate customer deposits into non-remote casinos and has seen cases where funds received via this method are not scrutinised as closely as deposits via other methods.

What licensees need to do:

Assess the risks of their businesses being used for ML/TF, including considerations of the different types of payment methods accepted by the business, including any payment terminals within the casino.
Following this risk assessment, licensees must implement effective policies, procedures and controls to prevent ML/TF. In the case of payment terminals in the casino, licensees must ensure they are appropriately scrutinising funds received via this method, and not relying on the third-party terminal provider and/or payment processor to conduct checks on the funds being transferred.
Where terminal providers provide the receiving casino with the details of the bank account where the money has been sent from, licensees should consider whether the account belongs to the customer, and whether it matches with other information known about the customer, including other bank accounts they have used.
When money is received via terminals within the casinos, licensees must consider how the use of this payment method feeds into the rest of the customer’s risk profile and complete an appropriate level of customer due diligence, including enhanced customer due diligence for high-risk customers.

Changing customer demographics in the non-remote casino sector

The Gambling Commission recognises that some non-remote casinos have experienced changes in the demographics of their customer base, which has not been reflected in their risk assessment or policies, procedures and controls.

Prior to 2020, high-end non-remote casinos had many international ultra-high-net-worth individuals as customers. During the pandemic, casino premises in GB were closed, and many of the customers who previously came to GB to gamble in high-end casinos shifted their preference to other global gambling centres. This shift in behaviour was also thought to be consolidated by changes to VAT regulations in the UK.

It is believed that this caused some non-remote casinos to change their entry and membership criteria to attract a wider range of customers from within GB. However, the Gambling Commission has seen cases where licensees have not updated their risk assessment and policies to account for the changed customer base, which has meant the procedures in operation are insufficient in mitigating the risks present within the business.

What licensees need to do:

As per LC 12.1.1 of the LCCP, licensees must ensure their ML/TF risk assessments are appropriate and reviewed in light of any changes of circumstances, including changes in the customer demographic. They must also have appropriate policies, procedures and controls to prevent ML/TF.

Adult gaming centre premises converting to licensed bingo premises

The Gambling Commission is aware of some adult gaming centre (“AGC”) premises licensees converting to bingo premises, and there is a concern that when preparing their ML/TF risk assessment, and reviewing the Gambling Commission’s risk assessment (as per LC 12.1.1(1) and (3) of the LCCP), they may not consider all relevant risks if they only consult the bingo section, and not the AGC section, of the Gambling Commission’s Risk Assessment. The Gambling Commission intends to update its Risk Assessment to reflect this industry trend.

What licensees need to do:

Bingo licensees who operate AGC-style premises are urged to consider all relevant ML/TF risks to the premises, including those noted in the bingo and arcade sections of the Gambling Commission’s Risk Assessment.
In addition the LC 12.1.1 of the LCCP, please note the following useful links:

Crash games

Crash games have been offered within crypto casinos (which are not licensed by the Gambling Commission and are illegal if accessible via GB) for a number of years.

Crash games may have differing graphics and premises, but typically the mechanics of the games mean that, once the initial bet is made, the round begins with a starting multiplier, which grows as the game progresses. Customers have the option to cash out at any point, but if the game crashes before a customer has cashed out, they will lose the money from the multiplier as well as their stake. Rounds can last anywhere from a few seconds to a couple of minutes before either the game crashes or the customer cashes out. Crash games are highly volatile and can lead to significant losses for players.

The Gambling Commission is aware of an increased interest in crash games within the legal, licensed casino sector. There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game (where these behaviours are inherently more common), and that transactional monitoring controls may not be effective in detecting suspicious activity.

What licensees need to do:

When introducing any new products (including crash games) licensees must assess the risks of that product being used to launder money and ensure they have appropriate procedures and controls in place to prevent money laundering. In this case, this would include controls to identify and prevent suspicious wagering patterns, and processes to feed the use of crash games into a customer’s overall risk profile and commence appropriate due diligence.
Where licensees know or suspect money laundering has occurred, they must submit a suspicious activity report (“SAR”).
More information about appropriate policies, procedures and controls can be found in the Gambling Commissions guidance on the prevention of money laundering and combating the financing of terrorism.

Application Registration Cards (“ARCs”)

ARCs are issued by the Home Office to individuals who claim asylum. ARCs contain information about the holder but are not evidence of identity and must not be accepted as a form of identity documentation. Those presenting ARCs when attempting to open a gambling account, or access gambling premises, may also be at a higher risk of exploitation and mule account activity.

What licensees need to do:

Have appropriate policies, procedures and controls in place to ensure the requirements for customer identification and verification are met. This includes detailing acceptable forms of identification documentation, which is not an ARC, in line with the Gambling Commission’s guidance for casinos (particularly, paragraphs 6.49 to 6.75) and the Government’s guidance (Application registration card (ARC) and How to prove and verify someone’s identity).
Train their staff members and implement measures to ensure that policies and procedures in relation to customer identification and verification are followed.
If a licensee believes that someone is being exploited, they can report it to the Modern Slavery and Exploitation Helpline on 08000 121 700 or via the online form but, if they think someone is in immediate danger, they should contact the police.
For more information please see: LC 17.1.1 of the LCCP and How to report at Migrant Help.

Jurisdictions subject to increased monitoring by the Financial Action Task Force (“FATF”)

In February 2025, FATF updated its list of high-risk jurisdictions (the FATF “black list”) and the list of jurisdictions subject to increased monitoring (the FATF “grey list”). More information can be found on the FATF’s website about the following lists:

What licensees need to do:

Review the lists above and ensure they have effective policies, procedures and controls in place to identify customers and relationships with links to high-risk jurisdictions, including those subject to calls for action and enhanced monitoring.
Conduct robust enhanced customer due diligence checks in relation to any customer relationships which are associated with high-risk jurisdictions, including those subject to enhanced monitoring by FATF in order to mitigate the risk of ML/TF, including proliferation financing.
More information about managing geographical risk can be found in the Gambling Commission’s guidance: Anti-money laundering responsibilities for casino businesses.

In light of these 13 emerging risks identified by the Gambling Commission, we remind licensees to review their ML/TF risk assessments as soon as possible to take into account these emerging risks.

Please get in touch with us if you have any questions about these risks or require our assistance in reviewing ML/TF risk assessments.

04Apr

White Paper Series: Gambling Commission update on the financial risk assessments pilot

4th April 2025 Tiffany Babayemi 59

On 10 February 2025, the Gambling Commission provided an update on the ongoing three-stage pilot of financial risk assessments (the “Pilot”) following completion of the first Stage. In this blog, we consider the Gambling Commission’s findings from Stage 1 and what can be expected from the next Stages of the Pilot.

What is the Pilot?

Following the Gambling Commission’s consultation response of 1 May 2024, social responsibility code provision 3.4.6 was introduced requiring operators in the three highest bands of fee categories, and volunteers in the lower fee categories, to participate in its Pilot of financial risk assessments.

Financial risk assessments are intended as a way of identifying high-spending online gambling customers who may be in financial difficulty and at risk of gambling-related harm. The risk assessment is intended to be “frictionless” and to be provided by a credit reference agency. The Pilot is being used to test how financial risk assessments can work in practice and to support a frictionless customer journey, and to assess appropriate thresholds.

The Pilot was expected to take place in three stages running from 30 August 2024 to 31 March 2025 inclusive, however, the Gambling Commission can extend the Pilot period until the end of April 2025 should this be necessary for practical reasons. Stage 1 looked at historic data, Stage 2 tested “more recent” data, and Stage 3 reportedly used current data. It is important to note that the Pilot is not a ‘live test’, and consumers have not been affected.

The Pilot is testing four set success criteria:

Frictionless part 1: What proportion of those high-spending customers checked could get a frictionless financial risk assessment if they were introduced?
Frictionless part 2: How quickly could credit reference agencies return a financial risk assessment?
Data relevance and accuracy: Is using credit reference data meaningful for understanding of an individual customer’s current or imminent overall financial risk and financial vulnerability?
Implementation issues: How could the data be presented to operators to help understand the level of financial risk or vulnerabilities associated with individual customers? How could operators build financial risk assessments into their overall customer interaction processes?

At each stage of the Pilot, the Gambling Commission has been testing at least one of the success criteria, and each stage is expected to provide different results. For example, the Gambling Commission stated that “it is likely that a smaller proportion of accounts would be able to receive a frictionless assessment when using historical data”. In our view, this is likely due to historical data having limited information available compared to more current or real-time data. The Gambling Commission has stated that its final decisions regarding financial risk assessments will also be informed by other evidence and data.

Stage 1 of the Pilot

When Stage 1 completed, it was considered by the Gambling Commission as “a pilot of the Pilot”. The Gambling Commission’s intentions for Stage 1 were to:

Test how the Pilot participants prepared data for the credit reference agencies and how the data was returned to the Pilot participants;
Test the Pilot reporting tools to see if the right data was getting back to the Gambling Commission; and
Refine and improve its systems for Stages 2 and 3 of the Pilot and identify issues that need further exploration.

Stage 1 looked at historical data for a cohort of inactive customers, and tested customer accounts which had met high-spending thresholds during a set period. The account details were shared with one or more credit reference agencies, which provided a financial risk assessment at the point the threshold was met. Stage 1 was testing what financial risk indicators were present when the account met the high-spending threshold. The credit reference agencies are replicating how they are providing financial data to operators as close as possible to automated or live implementation.

What were the findings of Stage 1?

Stage 1 involved more than 530,000 assessments across three credit reference agencies for approximately 300,000 accounts for the relevant year.
Approximately 95% (503,500) of these assessments met the first success criteria of a frictionless assessment. This means that the data shared by the operators was successfully matched by the credit reference agencies, which would allow a financial risk assessment to be returned to the operator in a frictionless manner.
Of the 95%, just over 3% were considered “thin files”, where the customer can be matched, there is no positive credit history, but the lack of negative indicators means they are considered lower risk in terms of financial vulnerability.
Approximately 5% (26,500) of the assessments were unmatched or the data provided by operators was invalid. These assessments were not able to receive a frictionless financial risk assessment. This is lower than the 20% anticipated by the White Paper.
Of the 5%, just over 4% of the assessments were unmatched (where the credit reference agency was unable to identify the customer and no information was available), and less than 1% were due to data formatting issues, invalid data, or duplications in the data provided to the credit reference agencies by operators.

According to the Gambling Commission, Stage 1 has primarily met the first success criterion on the proportions of customers that might be able to receive a frictionless check. It also provided insights on data quality and understanding (success criterion 3) and implementation issues (success criterion 4). Stage 1 did not look at the speed of an assessment (success criterion 2).

However, Stage 1 identified issues relating to data quality and implementation, which are to be explored further before financial risk assessments are introduced.

Data quality issues

The quality of operator data can play a role in reducing friction and operators can take steps to reduce duplicate accounts and rectify incorrect data fields to improve data linkage rates.
Credit reference agencies have unique systems and ways of presenting the findings back to the Pilot participants which caused some issues for the Pilot participants in assessing the findings. For example, a green RAG rating means different things across credit reference agencies.

At the time of the update, the Gambling Commission claimed that more can be done in Stages 2 and 3 to support operator understanding of different systems and allow credit reference agencies to make refinements to their models to reduce unnecessary variation or confusion. The Gambling Commission will also propose common definitions, such as time periods, to ensure commonality across credit reference agencies where needed.

Implementation issues

Pilot participants seem uncertain about the exact actions that might be proportionate when they consider both the financial risk assessment and the information they already hold and act on for customer interaction.

The Gambling Commission has created a working group of the Pilot participants to focus on these issues with the intention of informing guidance to operators. As part of Stage 1, the participants shared anonymised case studies to help provide early insight into how the financial risk assessment could inform decision making.

What next?

The Gambling Commission’s progression to Stage 2 reportedly involved testing more recent data and refining some of the aspects tested in Stage 1. The emerging findings from both Stage 1 and Stage 2 reportedly informed the Gambling Commission’s approach to Stage 3 of the Pilot, where current data is being used.

The Gambling Commission has emphasised that its findings of Stage 1 are preliminary but it expects the interactive and collaborative approach of the Pilot to prove worthwhile in testing how financial risk assessments might work in practice before final decisions are made.

Financial risk assessments were one of the more controversial proposals of the Government’s White Paper, and it is therefore vital that the Pilot is conducted carefully and transparently. Whilst, in theory, financial risk assessments are workable, one of the industry concerns was how risk assessments would be conducted in practice. Stage 1 has already identified possible hurdles, including the discrepancies across credit reference agencies. These practicalities must be ironed out for financial risk assessments to be effective, particularly as Stage 1 demonstrated that 26,500 of the assessments were unmatched or the data provided by operators was invalid. As such, without these practicalities addressed, these assessments may still create a disproportionate amount of friction for customers and operators alike. The Gambling Commission’s update indicated that it took these findings into consideration as Stage 2 of the Pilot progressed. Whilst the outcome of Stage 1 seems relatively positive, we wait to see the outcome of Stages 2 and 3 before a full assessment on the success of the Pilot can be made.

Please get in touch with us if you have any questions about the financial risk assessments Pilot or its Stage 1 findings.

04Apr

Gambling Commission’s guidance update on casinos providing MSB services

4th April 2025 Harris Hagan 55

On 3 April 2025, the Gambling Commission provided a guidance update in respect of casinos that also provide money service business (“MSB”) services. The Gambling Commission explains in the update that “casinos offering services to customers including acting as a cheque casher or currency exchange, accepting winners’ cheques and foreign currency, or transmitting money are considered to be providing MSB services under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017” (the “MLR 2017”).

Under the MLR 2017, the Gambling Commission is the supervisory authority for casinos in the UK and HM Revenue and Customs (“HMRC”) is the supervisory authority for MSBs. Pursuant to Regulation 7(2) of the MLR 2017, where casino businesses also carry out incidental MSB activities, the Gambling Commission and HMRC have agreed that the supervisory body is the Gambling Commission.

The MLR 2017 requires HMRC to maintain a register of MSBs and therefore all casino businesses that also provide MSB services have to register.

The Gambling Commission points out that it intends to enter into an agreement with HMRC, under which the Gambling Commission will provide the necessary registration details directly to HMRC, so that affected licensees will not have to apply directly to HMRC to be on the register. Specific details will be shared by the Gambling Commission with HMRC to facilitate registration.

The Gambling Commission emphasises the importance of licensees’ compliance with their legal obligations “because it contributes to tackling the serious economic and social harm from organised crime. It also contributes to reducing the threat from terrorism in the UK and around the globe”.

It also highlights HMRC’s current guidance on meeting the requirements: Money service business guidance for money laundering supervision and Understanding risks and taking action for money service businesses.

The Gambling Commission will be providing more information on the agreement with HMRC in due course.

Please get in touch with us if you have any questions or require any assistance.

26Mar

White Paper Series: Gambling Commission announces new rules increasing safer and simpler gambling promotions for consumers

26th March 2025 Harris Hagan 72

On 26 March 2025, the Gambling Commission announced changes aimed at increasing the safety and simplicity of consumer promotional offers. The changes include a mixed product promotion ban and limiting the bonus wagering requirements to 10. Changes will also be made to the Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) regarding Social Responsibility Code 5.1.1 (Rewards and Bonuses) to increase clarity as to the Gambling Commission’s current expectations of operators. These changes are part of the consultation response to the Autumn 2023 Consultation and are in line with the commitments within the White Paper.

What are the changes to be expected?

Mixed product promotion ban

The new rules ban operators from offering mixed product promotional offers which provide bonuses on the condition the consumer plays different gambling products, such as betting and playing slots. The Gambling Commission highlighted that this ban aims to reduce harm and boost fairness and openness, due to evidence showing consumers are more at risk of harm when they gamble on multiple products rather than a single product. There is also the risk that mixed product promotions confuse consumers because of complex terms and conditions.

In the consultation response, the Gambling Commission clarified that this ban applies to the mixing of products within an individual incentive or promotional offer, where terms are linked and shared.

From 19 December 2025, all gambling operators, except holders of gaming machine technical and software licences, will be banned from offering such mixed product promotional offers.

Bonus wagering requirements limited to 10

This new rule will require operators to cap the wagering requirement of promotional offers to 10, in order to decrease the likelihood of harm, reduce complexity, and improve transparency, while maintaining consumer choice. The Gambling Commission highlighted that some promotional offers provide bonus funds to consumers on the condition the consumer re-stakes any winnings multiple times before being allowed to withdraw winnings from the bonus. For example, a £10 bonus with 50 times wagering requirement requires the consumer to play through £500 before the winnings can be withdrawn. As such, high wagering requirements could confuse consumers and lead them to gamble for longer, and faster, than they are used to.

From 19 December 2025, all gambling operators except holders of gaming machine technical and software licences will be required to cap the wagering requirement to 10.

Rewording the Rewards and Bonuses section of the LCCP

To ensure increased clarity of the Gambling Commission’s current expectations of operators, the structure and wording of LCCP Social Responsibility Code 5.1.1 (Rewards and Bonuses) will be amended.

From 19 December 2025, SRCP 5.1.1 will read:

The following applies where a licensee makes available to any customer, or potential customer, an incentive or reward scheme or other arrangement under which a customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) (‘the benefit’).

Licensees must:
1. Set out terms and conditions, in relation to an incentive, which are clear, transparent, and fair and readily accessible to any customer or potential customer to whom it is offered.

Licensees must not:
1. Apply wagering requirements, which requires a customer to play through bonus funds, over a maximum of 10 times. A wagering requirement is a where a customer is required to make wagers totalling a particular value for funds to become withdrawable.
2. Include more than one type of gambling product (betting, casino, bingo, and lottery) within an incentive.
3. Alter or increase the receipt or the value, or amount of the incentive if the qualifying activity or spend is reached within a shorter time than the whole period over which the benefit is offered.
4. Construct incentives where, if the benefit comprises of free or subsidised travel or accommodation which encourages the customer’s attendance at a particular licensed premises, it is offered on terms that directly relate to the level of the customer’s prospective gambling.

If a licensee makes available an incentive or reward scheme for customers, designated by the licensee as ‘high value, ‘VIP’ or equivalent, it must be offered in a manner which is consistent with the licensing objectives.

Licensees must take into account the Commission’s guidance on high value customer incentives.

Tim Miller, Commission Executive Director for research and policy, said:

“These changes will better protect consumers from gambling harm and give consumers much better clarity on, and certainty of, offers before they decide to sign up.”

Next steps

The changes to mixed product promotions, bonus wagering requirements and SRCP 5.1.1 of the LCCP will come into force on 19 December 2025.

Please get in touch with us if you have any questions about these upcoming changes.

10Mar

White Paper Series: Supplementary consultation published calling for views on deposit limits

10th March 2025 Harris Hagan 89

The Gambling Commission is calling for views on how to achieve consistency and clarity for consumers that choose to set deposit limits.

The supplementary consultation, published on 6 March 2025, calls for views from interested parties on new rules aimed at increasing consumer control over deposit limits, which will come into force on 31 October 2025 and which we discussed in our blog: White Paper Series: New rules on customer led tools, customer funds and statutory levy. In this new supplementary consultation, the Gambling Commission is seeking opinions on how deposit limits should be defined and communicated to customers, with the aim of achieving consistency and clarity across the industry.

This is the fourth Gambling Commission consultation linked to the White Paper.

Why is a supplementary consultation needed?

The Gambling Commission acknowledges that typically, ‘deposit limits’ have worked as a simple limit on the amount a customer can deposit over a specific time period (for example, if a customer chooses to set a £20 weekly deposit limit, they can deposit a maximum of £20 into their account in that week). However, they have recently observed some operators offering ‘net deposit limits’, whereby withdrawals are also taken into account.

“For example, if a customer chooses to set a £20 weekly deposit limit but then withdraws £10 then the total amount they can deposit that week goes up to £30. This can be confusing for customers, especially if the descriptions for the different types of limit are similar.”

The Gambling Commission considers that financial limits termed ‘net’ deposit limits would not meet the definition of ‘deposit limits’ proposed in its initial consultation. It is concerned that the introduction of ‘net’ deposit limits has created inconsistency in how deposit limits work, which prevents the customer being able to make a proactive and informed choice as to what financial limits are right for them – limiting consumer empowerment and choice.

To ensure clarity, rather than implement the initial consultation and ‘pursue this as a compliance matter’, the Gambling Commission has chosen to consult further on this issue. The supplementary consultation therefore sets out proposals to:

revise the remote gambling and software technical standards (”RTS”) relating to financial limits to make clear that, as a minimum and default, ‘gross’ deposit limits must be offered to customers;
ensure that the term ‘deposit limit’ is used consistently by operators, i.e. only to describe ‘gross’ and not ‘net’ limits;
provide increased consumer choice by amending the implementation guidance for the RTS to allow for ‘net’ limits to be set in addition to other types of limits, should the customer choose.

The Gambling Commission’s view is that offering a default type of deposit limit across all operators will be beneficial for consumers in terms of improving understanding of how limits work and would enable consumers to use the same type of limit across more than one account.

Next steps

The supplementary consultation is open until 30 April 2025.

The changes on customer led tools and the protection of customer funds will come into force on 31 October 2025.

Please get in touch with us if you would like our assistance preparing a response to the supplementary consultation or if you have any questions about these upcoming changes.

28Feb

White Paper Series: Statutory Instrument published for statutory levy

28th February 2025 Harris Hagan 86

Following the final Parliamentary procedures, The Gambling Levy Regulations 2025 (the “Levy Regulations”) were signed into law on 25 February 2025 as a statutory instrument.

As a reminder, the Levy Regulations will come into effect on 6 April 2025 and require all operating licence holders in Great Britain to pay a mandated levy to the Gambling Commission, unless the amount of that levy is £10 or less.

The levy period

The amount due under the Levy Regulations is calculated by reference to an operator’s gross gambling yield (“GGY”) in each levy period. Generally, the levy period runs from 1 April in one year to 31 March in the next. However, the first levy period for most operating licence holders will be 9 month period from 1 July 2024 to reflect the way that the Gambling Commission collects the relevant data. The exception being lottery operating (society) licence holders for whom the first levy period will be the 12 month period from 1 April 2024. Basing the calculation upon GGY in the preceding year will provide certainty as to the amount of the levy payable in any given year.

The leviable amount

The “leviable amount” (effectively GGY) in respect of a levy period is as follows:

(3) In relation to a holder of an operating licence which is not a lottery operating licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of—

(i) amounts paid during the levy period to the holder of the operating licence by way of stakes in connection with the activities authorised by the operating licence, and

(ii) amounts (exclusive of value added tax) that otherwise accrue during the levy period to the holder of the operating licence directly in connection with activities authorised by the licence, minus

(b) the aggregate of amounts deducted during the levy period by the holder of the operating licence for the provision of prizes or winnings in connection with the activities authorised by the licence.

(4) In relation to a holder of a lottery operating (external lottery manager) licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of amounts paid to, or otherwise obtained by, the holder of the operating licence during the levy period by way of fees in connection with the lotteries promoted in reliance on the operating licence, minus

(b) the aggregate of amounts deducted during the levy period from the amounts described in sub-paragraph (a) by the holder of the operating licence for the provision of prizes in connection with the lotteries promoted in reliance on the operating licence.

(5) In relation to a holder of a lottery operating (society) licence, the “leviable amount” in respect of a levy period is—

(a) the aggregate of the proceeds of lotteries promoted in reliance on the operating licence which accrue during the levy period, minus

(b) the aggregate of amounts deducted during the levy period from the proceeds described in sub-paragraph (a) by the holder of the operating licence for—

(i) the provision of prizes in connection with the lotteries promoted in reliance on the operating licence, and

(ii) a purpose described in section 99(2) of the Gambling Act 2005.

The amount of the levy

Regulation 4 of the Levy Regulations sets out how the amount of the levy will be determined:

1.1% of the leviable amount for holders of the following operating licences:
1. a gambling software operating licence;
2. a remote betting intermediary operating licence which is not a betting intermediary (trading room only) operating licence;
3. a remote bingo operating licence;
4. a remote casino operating licence;
5. a remote general betting operating licence.

0.5% of the leviable amount for holders of the following operating licences:
1. a betting intermediary (trading room only) operating licence;
2. a non-remote betting intermediary operating licence;
3. a non-remote casino operating licence;
4. a non-remote general betting operating licence which is not a non-remote general betting (on-track or on-course) operating licence.

0.2% of the leviable amount for holders of the following operating licences:
1. a gaming machine general operating licence for an adult gaming centre;
2. a non-remote bingo operating licence;
3. a non-remote general betting (on-track or on-course) operating licence.

0.1% of the leviable amount for holders of the following operating licences:
1. a gaming machine general operating licence for a family entertainment centre;
2. a gaming machine technical operating licence;
3. a lottery operating licence;
4. a pool betting operating licence.

If an operating licence is combined (i.e. it includes more than one of the licences described in regulation 4 above), the levy will be payable in respect of the leviable amount for each licence held.

First levy period only – Note for holders of an operating licence which is not a lottery operating (society) licence – so most operators – the amount of the levy in respect of the first levy period is A × 1⅓, where A is the amount of the levy that would be determined in respect of that period in accordance with the applicable set rate payable of the leviable amount for the kind of operating licence in subsequent levy periods. This is because the first levy period for most licensees is only 9 months, rather than 12 months, and this is a pro rata calculation of the leviable amount for a 12-month period.

Example: for an operating licensee with a remote bingo operating licence, the first levy payment will be 1.1% of the GGY for the period 1 July 2024 – 31 March 2025 × 1⅓, payable by 1 October 2025. The subsequent levy payment will be 1.1% of the GGY for the period 1 April 2025 – 31 March 2026, payable by 1 October 2026.

Timing of payment of the levy

The levy must be paid before 1 October following the end of each levy period.

We trust our explanation of the calculation is helpful. For further clarification, we understand from the explanatory memorandum to the Levy Regulations that the Gambling Commission intends to publish guidance on the calculation, payment, collection and enforcement of the statutory levy in advance of the Levy Regulations coming into force on 6 April 2025.

For further details of the statutory levy and the Government’s announcement to introduce the statutory levy, please see our previous blog: White Paper Series: Initial Consultation Response on Statutory Levy and Update on Online Slot Stake Limits.

Please get in touch with us if you have any questions about the statutory levy or the Government’s announcement.

17Feb

Socially responsible marketing: How to strike the right balance

17th February 2025 Gemma Boore 80

In Great Britain, companies in the gambling industry face unique challenges when it comes to marketing and advertising. Gambling operators and affiliates alike are expected to keep abreast of complex and diverse requirements set by the Gambling Commission, the Advertising Standards Authority, the Betting and Gaming Council, the Information Commissioner’s Office and the Competition and Markets Authority – to name just a key few – to ensure British brands are marketed in a compliant and socially responsible manner.

To assist our regular readers, we outline below some of the key changes to British rules and regulations that will either imminently, or have recently, impacted the way in which companies undertake gambling marketing – including some that can occasionally, be overlooked.

Why is compliant marketing so important?

For companies in the gambling industry, striking the right balance between promoting brand/s, complying with regulatory obligations and protecting customers is key. Not just for compliance reasons (although this is – of course – paramount): socially responsible marketing also enhances reputation, differentiates a company from its competitors in a crowded marketplace, and helps to build consumer trust. However, achieving such a delicate balance is no mean feat because the ecosystem in which gambling companies operate is rapidly evolving.

How do you keep abreast of changing requirements? If you undertake marketing for a gambling brand that holds an operating licence issued by the Gambling Commission, it is a good idea to sign up for regulatory newsletters, including those published by the following organisations:

The Gambling Commission’s eBulletin, which includes information about consultations, recent regulatory enforcement action, changing requirements and other compliance matters: https://www.gamblingcommission.gov.uk/e-bulletin
The Advertising Standards Authority (“ASA”)’s newsletters – five are available but in our opinion, the most useful are the ASA rulings (which are weekly ASA adjudication alerts), the insight newsletter (which provides advice on advertising compliance) and the update newsletter (which includes details of public consultations): https://www.asa.org.uk/newsletter.html
The Betting and Gaming Council (“BGC”)’s newsletter, which includes news from the betting and gaming industry body, including in relation to the codes of conduct that apply to its members: https://bettingandgamingcouncil.com/ (click “BGC News signup” at the top of the page)
The Information Commissioner’s Office (“ICO”)’s E-newsletter (which provides updates on the latest developments in data protection laws) and Action We have Taken eNewsletter (which includes news on the action the ICO has taken against nuisance marketers, the trends they are seeing, and areas that will be investigated in the future): https://ico.org.uk/about-the-ico/media-centre/e-newsletter/

By subscribing to the above newsletters and other third party sources, such as this blog and gambling industry news articles, you will be amongst the first to be informed of regulatory changes that could impact the way that you undertake future marketing. Key changes are often also publicly consulted upon before they take effect. By signing up to regulatory newsletters and learning about future consultations, you may also have the opportunity to voice your opinion and shape future rules and regulations, before they come into effect.

If you are an affiliate, it is also important to remember that the brands you are marketing may have their own bespoke requirements. If so, these will typically be set out in your contract, or in a brand guidelines document that will be updated by the operator from time to time. Although there will of course, be many similarities between different operators’ requirements, each one will have its own approach and risk rationale when it comes to advertising – so it is important to check your contract, or get in touch with your affiliate manager if you want to find out more.

What changes are on the horizon?

We set out below some of the key changes that will impact gambling advertising and marketing in Great Britain in the near future.

1 May 2025: Changes to direct marketing preferences

The Gambling Commission’s requirements regarding gambling marketing and advertising are set out in Part 5 of the Code of Practice provisions in the Licence Conditions and Codes of Practice.

From 1 May 2025, a new Social Responsibility Code Provision (“SRCP”) 5.1.12 will come into effect, which will read as follows:

1. “Licensees must provide customers with options to opt-in to direct marketing on a per product and per channel basis. The options must cover all products and channels provided by the licensee and be set to opt-out by default. These options must be offered as part of the registration process and be updateable should customers change their preference. This requirement applies to all new and existing customers.
2. Channel options must include phone call, email and text messages (SMS) as applicable.
3. Product options must include betting, casino, bingo, as applicable. Operators must make clear to customers which products they offer are covered under relevant categories.
4. Where an operator seeks an additional step for customers to confirm their chosen marketing preferences, the structure and wording of that step must be presented in a manner which only asks for confirmation to progress those choices with one click to proceed. There must be no encouragement or option to change selection; only the option to accept or decline their selection.
5. Customers must not receive direct marketing that contravenes their channel or product preferences.
6. Existing customers who have not already opted out of marketing must be asked at their first log-in after commencement of this provision to confirm their marketing preferences if they have not done so already. Existing preferences can be copied over providing they match the format of this requirement.”

In essence, SRCP 5.1.12 is being introduced to ensure that from 1 May 2025, remote B2C gambling operators give their customers more granular options regarding direct marketing preferences.

While this change will certainly empower customers with greater control over the types of marketing they receive, the changes are controversial as they will essentially prevent operators from the relying upon the ‘soft opt in’ under the Privacy and Electronic Communications (EC Directive) Regulations 2003 (“PECR”): a commonly accepted exception to the general prohibition on sending unsolicited direct marketing to consumers, that permits businesses to market similar products and services to existing customers unless they have expressly opted out. The net effect being that, from 1 May 2025, gambling will stand alone in being the only industry that does not benefit from this business-friendly exception and many operators and affiliates will need to obtain fresh consent from, in some cases, the majority of customers to whom they are currently lawfully marketing.

We strongly recommend that operators and affiliates prepare for this seismic shift by:

(a) reviewing marketing lists now to identify the customers to whom they will no longer be able to send marketing from 1 May 2025. For example, because they are marketing to those customers in reliance upon the soft opt in under PECR or because the express consent they previous obtained was not sufficiently granular;
(b) seeking to obtain fresh consent from these individuals, that is compliant with the new requirements, as soon as possible; and
(c) ensuring their systems and processes for preventing marketing being sent to customers that do not grant express consent are robust and do not cause them to breach SRCP 5.1.12 once it comes into force.

For further discussion on the proposed changes please see our blog: White Paper Series: Direct marketing and cross-selling in the crossfire.

TBC: Changes following the Gambling Commission’s Autumn Consultation

As at the time of writing, the Gambling Commission’s response to its proposals regarding socially responsible incentives in its Autumn Consultation is still pending. This is despite the fact that the response to the other proposals in that consultation was published on 4 February 2025 (for more information, please see our blog: White Paper Series: New rules on customer led tools, customer funds and statutory levy), which confirmed:

“We aim to publish our response on Socially responsible incentives by the end of March.”

While future changes regarding socially responsible incentives are not yet set in stone, we anticipate that significant changes will come to pass. Licensees should anticipate:

new rules restricting (or evening banning) wagering requirements on free bets and bonuses; and
a ban on the mixing of product types within incentives. For example: giving free spins to sports bettors; or free bets to bingo players.

Although the devil will of course, be in the detail – the biggest (and smartest) players are already taking steps to prepare. For example, by permitting internal marketing and compliance experts opportunities to examine current marketing techniques together; identify any practices that may not comply with the Gambling Commission’s future rules; take external advice, where appropriate; and brainstorm novel techniques that may have more longevity in terms of helping the business to acquire new customers, increase their engagement with products (in a socially responsible way), and prevent customer attrition (otherwise known as ‘churn’) in the future.

Which marketing obligations can sometimes be overlooked?

As well as scanning the regulatory horizon for future change, marketing teams should ensure they are alive to recent reforms to direct marketing and advertising rules that, in our experience, can occasionally be overlooked.

Social Responsibility Code Provision (“SRCP”) 3.4.3: Remote Customer Interaction

Although most remote licensee are acutely aware of SRCP 3.4.3 and the GBGC’s associated customer interaction guidance for the remote sector (the “Guidance”), the obligation for remote licensees to stop sending marketing to customers that are displaying strong indicators as harm (as defined by their systems and processes, having taken the Guidance into account) is one that can still in our experience, be overlooked.

The requirement in question means that remote operators must ensure that when their customers are, in their view, displaying strong indicators of harm, they must promptly cease sending the customer direct marketing communications. In other words, licensees must ensure that:

(i) they have systems in process in place to identify indicators of harm;
(ii) assess when those indicators of harm are strong – either on their own or when taken together; and
(iii) there are adequate and effective communication channels between a licensee’s responsible gambling and marketing teams, such that marketing is stopped at the appropriate juncture.

Licence Condition (“LC”) 7.1: General Fair and Open Obligations and Related Obligations

Existing regulations like LC 7.1..1 (fair and transparent terms and practices), Ordinary Code Provision (“OCP”) 5.1.1 (rewards and bonuses – SR code), and 5.1.2 (proportionate rewards) of the LCCP stress the need for fairness and transparency in marketing offers.

This means that companies must ensure that significant terms are clearly presented in advertisements; full terms and conditions are easily accessible; and do not contain any unfair provisions. In our experience, this is an area of focus for the Gambling Commission during a compliance assessment, which may therefore expose licensees to enforcement action. We therefore suggest that licensees proactively review their general and offer-specific terms and conditions against the LCCP requirements.

CAP/BCAP Codes and the BGC’s Gambling Industry Code for Socially Responsible Advertising (the “Industry Code”)

The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the “CAP Code”), for those undertaking television marketing, the UK Code of Broadcast Advertising (the “BCAP Code”), and the BGC’s Gambling Advertising Code, are essential reading for marketing teams. These codes outline how and when to target marketing efforts and are entrenched in the LCCP under OCP 7.1.1 (compliance with advertising codes), which states:

1. All marketing of gambling products and services must be undertaken in a socially responsible manner.
2. In particular, Licensees must comply with the advertising codes of practice issued by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) as applicable. For media not explicitly covered, licensees should have regard to the principles included in these codes of practice as if they were explicitly covered.

Common pitfalls, such as inadequate age-gating on third party platforms; use of brand ambassadors that strongly appeal to under 18s and/or not including significant terms and conditions on a promotion, can lead to regulatory action and reputational harm.

SRCP 1.1.2: Responsibility for Third Parties

Although we are confident that most licensees are acutely aware of SRCP 1.1.2 (responsibility for third parties – all licences), which states as follows; in our experience it is one of the requirements of the LCCP that is commonly breached. Sometimes by a third party that is carrying out a regulated activity on behalf of a licensed operator, but also sometimes by the licensee themselves – in cases where they have entered into an agreement that does that not require the third party to conduct themselves as if they were themselves bound by the LCCP and/or that cannot be terminated in accordance with SRCP 1.1.2.

Licensees are responsible for the actions of third parties with whom they contract for the provision of any aspect of the licensee’s business related to the licensed activities.
Licensees must ensure that the terms on which they contract with such third parties:

a. require the third party to conduct themselves in so far as they carry out activities on behalf of the licensee as if they were bound by the same licence conditions and subject to the same codes of practice as the licensee

b. oblige the third party to provide such information to the licensee as they may reasonably require in order to enable the licensee to comply with their information reporting and other obligations to the Commission

c. enable the licensee, subject to compliance with any dispute resolution provisions of such contract, to terminate the third party’s contract promptly if, in the licensee’s reasonable opinion, the third party is in breach of contract (including in particular terms included pursuant to this code provision) or has otherwise acted in a manner which is inconsistent with the licensing objectives, including for affiliates where they have breached a relevant advertising code of practice.

In addition to ensuring that commercial agreements are compliant with the above provision, we also recommend that licensees conduct and refresh due diligence, including PEP (politically exposed person) and sanction checks, on affiliates and other partners.

Establishing detailed brand guidelines, requiring approval for new marketing copy, and conducting regular audits can also help to mitigate the risk of vicarious non-compliance, which could threaten a brand’s integrity.

Our top tips for compliance

While a changing regulatory environment can present challenges, there are strategies that you can put in place to assist your business to stay compliant:

Communication: Fostering strong communication channels between marketing and compliance teams is essential. In larger organisations, it is equally important for brands to collaborate effectively, ensuring that all marketing strategies align with compliance standards across the wider business.
Induction and Refresher Training: Arrange comprehensive induction and refresher training sessions for marketing teams, particularly when regulatory changes are imminent. Harris Hagan can provide tailored training, along with the creation and updating of internal checklists and guides to ensure that staff are well-informed about current and forthcoming requirements.
A/B Test New Methods: Consider A/B testing new consent and marketing methods in anticipation of forthcoming changes to marketing preferences and socially responsible incentives. This proactive approach can help identify effective strategies that comply with upcoming regulations.
Involve Compliance Teams: When devising new campaigns or marketing new products, involve compliance teams early in the process. Having legal experts review marketing copy, especially for innovative or unconventional products, is critical. Keeping thorough records of these reviews can provide additional protection.
Implement Technical Solutions: Ensure that robust technical systems are in place to suppress marketing communications where appropriate, such as in cases of strong indicators of harm have been identified, a customer has self-excluded, or when consent is withdrawn. Regularly test systems to ensure there is no ‘single point of failure’ in marketing controls. This will, in in turn support you to demonstrate that ‘reasonable steps’ have been taken, if there is any subsequent oversight.
Distinguish Between Marketing and Service Communications: It’s important to understand the distinction between marketing communications and service communications. These two types of communication should not be mixed to avoid confusing customers and to maintain regulatory compliance.
Contingency Plans: If a marketing mistake occurs, having policies and procedures in place to limit potential damage is essential. Companies should notify regulators as required and take steps to protect their brand reputation. After addressing the incident, take the time to analyse what went wrong and implement measures to reduce the risk of recurrence.

Conclusion

Striking the right balance between promoting your brand and protecting customers in the gambling industry is not just a matter of compliance; it’s a smart business strategy.

By: (1) embracing socially responsible marketing practices; and (2) taking proactive steps now, gambling companies can ensure their marketing efforts align with both their brand values and the welfare of their customers, creating a win-win scenario for all stakeholders involved.

Please get in touch with us if you have any questions about direct marketing, are interested in receiving our handy gambling advertising guide in Great Britain, would like assistance reviewing your terms and conditions and/or ads for compliance with British gambling regulatory requirements, or are looking to arrange training for marketing staff, compliance teams and/or PML holders in your gambling business.