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

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

Additional obligations

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

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

We discuss this new licence condition in a separate blog.

Licence condition 15.2.2 (other reportable events)

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

We discuss this new licence condition in a separate blog.

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

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

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

We discuss this new licence condition in a separate blog.

Removed obligations

Licence conditions 13.1.1 and 13.1.2 (pool betting)

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

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

Licence condition 15.2.1 (reporting key events)

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

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

Licence condition 15.2.2 (other reportable events)

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

Other proposed amendments

Licence conditions 15.1.1 and 15.1.2 (reporting suspicion of offences)

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

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

Licence condition 15.2.1 (reporting key events)

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

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

Submission of key events

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

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

Ordinary code provision 8.1.1

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

Licence condition 15.3.1

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

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

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

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

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

Social responsibility code provision 6.1.1 (complaints and disputes)

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

Changes to personal licence conditions

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

The changes come into force on 31 October 2020.

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