28Apr

White Paper Series: The White Paper, 2 years on

28th April 2025 Jessica Wilson 21

The 27 April 2025 marks two years since the Government published its White Paper. As we reach the two-year anniversary, we take the opportunity to reflect on the last 12 months and consider what is in store for the upcoming year.

Where did we get to?

At the one-year anniversary of the White Paper, we noted in our blog that a lot of work had been done by all parties to advance the implementation of the proposals in the White Paper, particularly through the publication of numerous consultations from the Gambling Commission and Government. Whilst progress had been made, at that stage there was no clear direction of travel (until the Gambling Commission’s response to the Summer Consultation was published, just days after the one-year anniversary). Whilst the Government’s goal of implementing the main White Paper measures by summer 2024 seemed like a tight deadline – particularly for the requirements that required secondary legislation – at that time we understood that the Department for Culture, Media and Sport (“DCMS”) would be publishing responses to the consultations on the statutory levy and land-based measures “in the coming weeks”. The industry was also aware that there would be a General Election in 2024, and whilst delays were anticipated, it was thought that this was unlikely to affect the final outcome of the White Paper proposals.

What happened over the last 12 months?

Momentum continued as we entered the second year since the White Paper was published, and the Gambling Commission published its response to its Summer Consultation on the 1 May 2024. Setting out the planned approach for financial vulnerability checks, remote game design, direct marketing and some land-based changes, the consultation response provided the industry with some certainty and confirmation that tangible progress was being made.

However, all activity was brought to a halt when the General Election was announced on 22 May 2024. Originally anticipated for autumn 2024, the General Election took place on 4 July 2024, resulting in a new Labour government. As the new Government was finding its feet (and was on summer recess), momentum in progressing implementation of the White Paper proposals fizzled, and the proposals that required secondary legislation and parliamentary time were put on hold. The second half of 2024 was quieter while we waited patiently for the Government to make its next move.

The Government’s original target of summer 2024 came and went, and it was not until 27 November 2024 when DCMS published its initial response to its consultation on the statutory levy, and confirmed its approach regarding stake limits for online slots (which were originally anticipated to come into effect in September 2024).

As we entered 2025, activity started to increase. The Gambling Commission launched its January 2025 consultation regarding Gaming Machine Technical Standards and Testing Strategy on 29 January 2025, published responses to the Autumn 2023 consultation on 4 February 2025 and 26 March 2025, and launched a supplementary consultation regarding the Remote Technical Standards on 6 March 2025. Additionally, on 25 February 2025, statutory instruments for online slots stake limits and the statutory levy were signed into law.

One constant over the past year is the notable lack of progress in respect of the voluntary creation of a non-statutory Gambling Ombudsman, one of the cornerstone proposals of the White Paper. The Gambling Ombudsman is intended to be an independent, free to use, non-statutory body that will handle social responsibility complaints from consumers and was due to start taking claims from summer 2024.

Key 2024 – 2025 highlights for White Paper proposals at the time of writing are:

The Gambling Commission’s response to its Summer Consultation on 1 May 2024, which set out requirements for many White Paper proposals relating to financial vulnerability checks, remote game design, direct marketing requirements, land-based age verification, and changes to requirements to hold a personal management licence.

The introduction of financial vulnerability checks on 30 August 2024. As the most controversial White Paper proposal, the introduction of such checks is a milestone for the industry. The light-touch financial vulnerability checks involving the assessment of publicly available data came into force at £500 a month to ease introduction. The trigger was reduced to £150 a month from 28 February 2025.

The passing of a Statutory Instrument on 25 February 2025, introducing the statutory levy under The Gambling Levy Regulations 2025 (“The Levy Regulations”), which came into effect on 6 April 2025. The regulations require licensees to pay a mandated levy to the Gambling Commission, unless the amount of that levy is £10 or less. The Gambling Commission published supplementary guidance on 7 April 2025.

The passing of a Statutory Instrument on 25 February 2025, under The Gambling Act (Operating License Conditions) (Amendments) Regulations 2025. This introduced online slots stake limits at £5 for those aged 25 and over (applicable from 9 April 2025), and £2 for those aged 18-24 years old (applicable from 21 May 2025). The Gambling Commission published supplementary guidance on 30 January 2025.

April 2024 – April 2025 timeline for the White Paper proposals

1 May 2024 – The Gambling Commission published its response to its Summer 2023 Consultation. Its response confirmed (a) the introduction of light-touch financial vulnerability checks for gambling customers with a net deposit of more than £150 a month, (b) the launch of a pilot scheme to test how enhanced financial risk assessments will work in practice, (c) new remote game design requirements to extend the requirements that already apply to slots to other online products, resulting in publication of new remote technical standards, (d) changes to direct marketing requirements obliging online gambling businesses to provide options to opt-in to product types and channels, (e) requirements for all land-based licensees to carry out age verification test-purchasing, (f) changes to the LCCP to confirm that best practice for land-based operators is “Think 25”, and (g) extension of the management roles expected to hold a personal management licence.

1 May 2024 – The Betting and Gaming Council published the Industry Voluntary Code on Customer Checks and Documentation Requests Based on Spend (the “Code”). The Code was developed jointly between members of the Betting and Gaming Council and the Gambling Commission, and is a voluntary interim scheme intended to bring “consistency across the regulated sector for operators who adopt it – until the frictionless financial risk assessments set out in the Government’s White Paper can be developed, tested and implemented”.

15 May 2024 – Progression of the Criminal Justice Bill, setting out new powers for the Gambling Commission to more effectively take action against illegal online gambling, to the report stage.

16 May 2024 – DCMS published its response to its consultation on Measures relating to the land-based gambling sector. The response outlined the proposed implementation of measures to: relax casino rules for 1968 Act casinos, increase gaming machine entitlement ratios in arcades and bingo halls, accept cashless payments on gaming machines, introduce a legal age limit of 18 for Category D slot style machines, and increase local authority fees. The majority of land-based reforms require legislation to be implemented.

1 July 2024 – Quarterly regulatory returns reporting introduced. This change was originally proposed in the Gambling Commission’s Autumn 2023 Consultation, and was confirmed in its consultation response published on 27 March 2024.

4 July 2024 – UK General Election.

25 July 2024 – The Gambling Commission published the new Gambling Survey of Great Britain (the “GSGB”), collecting data from 20,000 respondents each year and set to establish a new baseline for understanding gambling behaviour in Great Britain. The GSGB publication caused widespread concern in the industry about the accuracy and reliability of the data, that it will be misused and that it will give the new Labour government a reason to depart from what was already proposed in the White Paper, and have a longer term adverse impact on gambling policy.

30 August 2024 – Introduction of new social responsibility code provision (“SRCP”) 3.4.4, which sets out requirements for light-touch financial vulnerability checks at an initial threshold of £500 a month. The pilot for financial risk assessments was also launched and is expected to run until April 2025.

30 August 2024 – Introduction of new age-verification requirements, under SRCP 3.2.1, 3.2.3(8), 3.2.5(7) and 3.2.7(9) of the LCCP. The requirements oblige all land-based gambling licensees to conduct test purchasing and change from “Think 21” to “Think 25”.

27 November 2024 – DCMS published its initial response to the Consultation on the structure, distribution and governance of the statutory levy on gambling operators. The initial response committed to having the levy in place by summer 2025, with 50% going to the NHS, 30% to gambling harm prevention, and 20% to develop bespoke research programmes on gambling.

29 November 2024 – New requirements under licence condition 1.2.1(2) of the LCCP introduced. The requirements extend the ‘specified management offices’ to include the Chair of the Board, money laundering compliance officer and money laundering reporting officer, and confirm that the individual responsible for the overall management and direction of the licensee’s business or affairs is likely to be the CEO, Managing Director or equivalent. Holders of specified management offices are required to hold a personal management licence (“PML”).

5 December 2024 – DCMS announced its Gambling Act Review evaluation plan. DCMS expect the evaluation to be reported in 2026.

17 January 2025 – The revised Remote gambling and software technical standards (RTS) came into force extending the requirements that apply to slots to other online products.

29 January 2025 – The Gambling Commission launched its January 2025 consultation which sets out proposed changes to the Gaming Machine Technical Standards, the Gaming Machine Testing Strategy, and the LCCP. The proposals relate to consolidating and updating the existing 12 gaming machine technical standards into a single standard, and introducing five new standards, a licence condition and social responsibility code provision in respect of safe use of gaming machines. The consultation closes on 20 May 2025 and is a serious cause for concern for the land-based industry. We would encourage clients to respond and provide evidence as to: the disproportionate cost of the proposals and the adverse impact upon business relative to any reduction of gambling harm, whether the proposals are even necessary given existing safer gambling measures in their venues, and the huge impact on the enjoyment of gaming machines by the overwhelming majority of consumers.

30 January 2025 – The Gambling Commission published its online slots stake limit guidance on the Statutory Instrument, which clarifies the stake limits and implementation dates, and provides example scenarios.

4 February 2025 – The Gambling Commission published its response to its Autumn 2023 consultation. Its response confirmed (a) new requirements for customer led tools to give consumers more effective ways to manage their gambling by making it easier to set and maintain deposit limits on their online accounts, (b) the requirement that operators whose customer funds are ‘not protected’ in the event of insolvency must actively remind customers once every six months that their funds are not protected, and (c) the removal of the requirement to make annual financial contributions to a list of research, prevention and treatment organisations to pave the way for the new statutory levy by 31 March 2025.

10 February 2025 – The Gambling Commission published an update on the financial risk assessment pilot, which outlined the findings from Stage 1 of the three-stage pilot, identified the issues relating to data quality and implementation, and explained what can be expected with Stages 2 and 3.

25 February 2025 –Statutory Instrument, The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2025, signed into law, adding a new licence condition to all remote casino operating licences which introduces a maximum stake limit for online slots games in Great Britain. The total amount which an individual may stake in relation to any game cycle may not exceed (a) £2, where the individual is less than 25 years old, and (b) £5, where the individual is 25 years old or over.

25 February 2025 –Statutory Instrument, The Levy Regulations, signed into law, requiring all operating licence holders in Great Britain to pay a mandated levy to the Gambling Commission. The Levy Regulations came into force on 6 April 2025.

28 February 2025 – The requirement set out in SRCP 3.4.4(7) of the LCCP for financial vulnerability checks at £500 a month reduced to £150 a month, as set out in SRCP 3.4.4(6).

6 March 2025 – The Gambling Commission launched a supplementary consultation setting out its proposals for clarifying the definition of financial limits in the Remote Gambling and Software Technical Standards, to ensure there is a differentiation between “deposit limits and “loss limits”. The consultation closed on 30 April 2025.

26 March 2025 – The Gambling Commission published a response to its Autumn 2023 consultation. Its response confirmed (a) a ban on operators offering mixed product promotional offers which provide bonuses on the condition the consumer plays different gambling products, such as betting and playing slots, (b) a requirement to cap the wagering requirement of promotional offers to 10, and (c) rewording SRCP 5.1.1 (Rewards and Bonuses) of the LCCP to ensure clarity of the Gambling Commission’s expectations of operators around socially responsible incentives. Requirements to come into force on 19 December 2025.

31 March 2025 – The removal of SRCP 3.1.1(2) of the LCCP requiring licensees to make annual financial contributions to a list of research, prevention and treatment organisations.

6 April 2025 – The Levy Regulations came into force. The first invoices will be issued on 1 September 2025, with payment required on or before 1 October 2025.

7 April 2025 –The Gambling Commission published its statutory levy guidance to accompany the Levy Regulations, including details of who will collect the levy, who must pay the levy, how the levy is calculated, when licensees need to pay, how to pay the levy, and the consequences of not paying the levy.

9 April 2025 – The Statutory Instrument adding a new licence condition to all remote casino operating licences which introduces a maximum stake limit for online slots games in Great Britain came into force.

What can we expect next?

Changes which will be implemented in 2025:

1 May 2025 – New direct marketing requirements come into force.
21 May 2025 – £2 stake limit for online slots for those aged 18-24 years old to come into force.
31 October 2025 – New customer led tools and requirements regarding the protection of customer funds in the event of insolvency, and further updates to RTS in relation to financial limits come into force.
19 December 2025 – New requirements for socially responsible incentives come into force.

Other areas which will likely progress in the next year at varying speeds:

Establishment of the Gambling Ombudsman.
The publication of the Gambling Commission’s response to its December 2023 Consultation, which closed on 15 March 2024, relating to the criteria for imposing a financial penalty and penalty calculation methodology, and changes to financial key event reporting.
Implementation of the new land-based measures as set out in DCMS’s consultation response of 16 May 2024.
Progress with the Criminal Justice Bill in Parliament and extension of the Gambling Commission’s powers to tackle illegal gambling.
DCMS’s consultation on Gambling Commission fees.

The second year of the White Paper saw a number of the proposals “ticked off” with their implementation having now taken place, or lined up to take place soon. The overwhelming list of proposals has shortened, and the gambling industry is now gradually transitioning to the post-White Paper era. We look forward to seeing where things stand by the time of the three-year anniversary.

Please sign up to our blog to receive insight and commentary on the continued journey of the White Paper.

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.

05Feb

White Paper Series: New rules on customer led tools, customer funds and statutory levy

5th February 2025 Harris Hagan 114

On 4 February 2025, the Gambling Commission announced changes aimed at increasing consumer control over deposit limits and greater transparency of customer funds protection by operators. Also, a further change to the Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) will also pave the way for implementation of the Government’s upcoming statutory levy. These changes are part of the consultation response to the Autumn 2023 Consultation and are consistent with the commitments within the White Paper.

What are the changes?

New customer led tools

The new rules will give consumers more effective ways to manage their gambling by making it easier to set and maintain deposit limits on their online accounts, in ways that work best for them. These rules will take good practice already offered by some operators and expand that so customers can expect the same standards across the industry.

From 31 October 2025, all gambling operators must prompt their customers to set a financial limit before they make their first deposit and make it easy to review and alter this limit at any point after.

Gambling operators will also be required to remind customers every six months to review their account and transaction information. The Gambling Commission believes this will help customers consider if they want to change existing, or set new, deposit limits.

The announcement confirms that the Gambling Commission’s work revealed recent changes by some operators on how deposit limits are offered, which could cause confusion for consumers. As a result, a short supplementary consultation will be launched on proposals to improve consistency and transparency for consumers on how financial limits work.

2. Transparency of protection of customer funds

Operators who hold customer funds must already set out in the terms and conditions whether these are protected in the event of insolvency, the level of such protection and the method by which this is achieved. They must also make this information available at the point at which a customer first deposits money.

The level of protection must be described as either ‘not protected – no segregation’, ‘not protected – segregation of customer funds’, ‘medium protection’ or ‘high protection’.

From 31 October 2025, operators whose customer funds are ‘not protected’ in the event of insolvency must actively remind customers once every six months that their funds are not protected.

Whilst there is no legal duty on gambling operators to protect customers funds in the event of insolvency, many of them do so voluntarily. The Gambling Commission believes the changes will help consumers understand which operators protect their funds and which do not – information which will support them in making choices about who they gamble with.

3. Changes connected with the new statutory levy

The LCCP currently requires operators to make annual financial contributions to a list of research, prevention and treatment organisations.

This requirement will be removed close to the introduction of the Government’s statutory levy (expected to come into force on 6 April 2025) as it will become obsolete. The Gambling Commission will notify licensees of the date of implementation as soon as the Parliamentary process is complete.

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

“These changes illustrate our commitment to ensuring gambling is fair and open by improving consumer empowerment and choice.

“These changes will help consumers decide on deposit limits, enable them to keep track of their spending and ensure they are fully aware of what happens to their funds should an operator become insolvent.

“We will now continue our work to deliver our remaining White Paper commitments, including our programme of evaluation.”

Next steps

The new statutory levy requirement is expected to come into force on 6 April 2025. 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 have any questions about these upcoming changes.

04Feb

White Paper Series: Gambling Commission launches January 2025 consultation

4th February 2025 Harris Hagan 105

On 29 January 2025, the Gambling Commission launched its January 2025 consultation (the “January 2025 Consultation”). It is the Gambling Commission’s third consultation addressing its commitments within the White Paper, following the Summer 2024 consultation and Autumn 2023 consultation.

What does the January 2025 Consultation propose?

The January 2025 Consultation sets out proposed changes to the Gaming Machine Technical Standards (“GMTS”), the Gaming Machine Testing Strategy (“Testing Strategy”), and the Licence Conditions and Codes of Practice (“LCCP”), several of which were foreshadowed in the Gambling Commission’s Advice to Government in April 2023.

These include:

introducing five new standards, a licence condition and a social responsibility code provision designed to support and empower consumers to use gaming machines safely at every stage of the customer journey – this includes proposals on time and monetary limit setting functionality and information provision, such as safer gambling messaging and the display of net position and session time;
amending three existing standards having considered industry proposals to improve customer enjoyment and gameplay;
consolidating the existing 12 gaming machine technical standards into a single standard, whilst amending the format to be more consistent with the Remote gambling and software technical standards for greater clarity; and
updating the gaming machine technical standards and the related testing strategy to remove obsolete material.

1. Consolidation of the GMTS

The Gambling Commission proposes to consolidate the 12 existing GMTS into a single standard and amend the format to be more consistent with the Remote gambling and software technical standards. The proposed consolidated version of the GMTS will be structured into 8 main standards and apply to all the main categories of gaming machines, with a further 6 standards for specific technical requirements. Although the text is proposed to be re-structured, these are essentially unchanged from the existing GMTS and cover areas such as legacy gaming machines, wireless network requirements and linked progressive requirements.

Given the now identical maximum charges for use (and maximum payouts) on Category B2 and B3 gaming machines is £2 per game (reduced from £100 per game in 2019), the Gambling Commission propose amending the GMTS for Category B2 gaming machines. Proposals are in relation to the game speed of play, that each game cycle must last at least 2.5 seconds (GMTS 5.7), and use of compensators and/or regulators, now permissible subject to compliance with the requirements and implementation guidance (GMTS 5.8).

2. Amendments to the GMTS

The proposals include amendments to the existing GMTS following the Gambling Commission’s consideration of industry proposals to improve consumer enjoyment and gameplay. These include:

changes to game links (meaning an element, feature or outcome from one game is either held over or made reference to (recreated) in the next game (for example, reel band holds)) by (i) adjusting the value and the number of repeats permissible on Category C gaming machines (GMTS 5.14b) and (ii) removing the need for a 50/50 chance following a losing game on Category B gaming machines (GMTS 5.14a); and
changes to live jackpots by allowing a player to gamble a live jackpot win on all categories of gaming machine (GMTS 5.9) – allowing live jackpots to be gambled, in the same manner that other prizes can be. This would not require consumers to gamble but rather choose to gamble or collect the live jackpot win in full at their own discretion.

It is noted in the January 2025 Consultation that several other proposals were discounted for a variety of reasons. These reasons included, for example, risk to the licensing objectives and the need for primary legislation which sits outside of the Gambling Commission’s remit.

3. New technical standards of the GMTS

The Gambling Commission seeks to support and empower consumers to use gaming machines safely at every stage of the customer journey.

Notably, the January 2025 Consultation proposes to introduce five new technical standards of the GMTS. These new standards focus on:

time and monetary limit setting (GMTS 15.1) including:
- requiring operators to ensure machines offer a default option of no more than a 20-minute session and £150 in deposits;
- requiring customers to set their own limits, but these must not be more than 60 minutes or £450 deposited – setting no limits will not be an option; and
- requiring players to take a mandatory break in play of at least 30 seconds when they hit their assigned limits; in addition, an alert will be sent to staff in the venue to inform them that a gambler has reached their pre-set threshold;
safe gambling messaging during breaks in play when a customer set limit or default limit is reached or modified prior to being reached. The provision of information other than safer gambling messaging – such as a marketing of games or new promotional offers – in this scenario, will be prohibited (GMTS 15.2);
display of net position and elapsed time (GMTS 15.3);
awards less than or equal to the last total stake gambled must not be celebrated (GMTS 15.4); and
prohibiting features that permit a customer to reduce the time until the result is known (GMTS 15.5).

Regular readers will note the similarities between some of the new technical standards and the changes to the remote games design requirements that came into force on 17 January 2025. For further information, please see our blog: Reminder: Changes to remote games design requirements come into force on 17 January 2025.

A copy of the proposed new GMTS is available here.

f. Update to a social responsibility code provision of the LCCP

It is also proposed that a social responsibility code provision (SR C P 3.3.3) of the LCCP should be amended to require licensees to ensure that any gaming machines comply with GMTS 15.1 in relation to time and monetary limit setting, and ensure that staff alerts for limit setting are acted upon appropriately and in a timely manner.

g. Update to the Testing Strategy

The Gambling Commission wants to update the Testing Strategy to remove obsolete material in the strategy. Proposals include removal of the initial transitional arrangements and implementation dates.

In addition, the Gambling Commission proposes to align the testing requirements for Category B2 gaming machines with those applicable to Category B3 gaming machines, due to the identical maximum charges for use (and maximum payouts) on Category B2 and B3 gaming machines.

A copy of the proposed new Testing Strategy is available here.

h. New licence condition of the LCCP

The January 2025 Consultation proposes to introduce a new licence condition of the LCCP, under the powers conferred by section 86(2) of the Gambling Act 2005, which will allow the Gambling Commission to effectively address instances whereby a gaming machine has been illegally manufactured, supplied, installed, adapted, maintained or repaired, or does not comply with the GMTS. Making a specified machine available for use after the Gambling Commission has notified the licensee in writing that the manufacture, supply, installation, adaption, maintenance or repair of the machine will now be a breach of a licence condition if it (a) was not carried out in reliance on a gaming machine technical operating licence, or (b) did not comply with the Commission’s gaming machine technical standards, which could give rise to enforcement action by the Gambling Commission .

Will this be the last White Paper consultation by the Gambling Commission?

While this is the Gambling Commission’s third consultation implementing proposals in the White Paper, it is unlikely to be the last. A further Gambling Commission consultation for the land-based sector may be required in due course if the Government decides to remove the prohibition on the direct use of debit cards on gaming machines. The Gambling Commission is also considering undertaking a further consultation to consider the effects of legislative change following the Gambling Act Review.

Next steps

The January 2025 Consultation will be open for 16 weeks, closing on 20 May 2025. Responses can be submitted online, or by post to the Gambling Commission’s Policy Team.

We strongly encourage all licensees and stakeholders to review and respond to the January 2025 Consultation. Please get in touch with us if you would like to discuss this matter further or require our assistance preparing responses.

29Jan

Unlicensed gambling – Part 3: The warning, the webinar and the method(ology) to the madness

29th January 2025 Gemma Boore 118

In this Part 3 of our recent blogs on unlicensed gambling, we discuss recent statements made by the Gambling Commission regarding the steps that it is taking to identify, quantify and disrupt illegal online gambling in Great Britain (“GB”).

If you would like to read more on this subject please see: Unlicensed gambling – Part 1: Growing threat or exaggerated myth? and Unlicensed gambling – Part 2: Is the Gambling Commission winning the “whack-a-mole” game?

The Warning

On 20 January 2025, the Gambling Commission posted a warning notice to the gambling industry on its website in which it explained it had become aware of casino games supplied by licensed operators appearing on unlicensed websites available to GB consumers illegally, and called on its B2B licensees to help it to tackle the illegal, unlicensed market.

The Gambling Commission noted that in some instances, third party resellers (who are also commonly known in the industry as aggregators) are distributing games supplied by its licensees to the illegal market, often in breach of contractual obligations. In the Gambling Commission’s view, licensees may have been negligent in permitting this and warned that that this practice might place a Gambling Commission issued operating licence at risk.

To mitigate this regulatory risk, the Gambling Commission advised its B2B licensees:

to actively monitor their business relationships to ensure their partners are not participating in offering illegal gambling facilities to the GB market;
to terminate relationships where non-compliance has occurred; and
to actively engage with the Gambling Commission where such activities are identified, setting out the preventative measures adopted to ensure such activity ceases immediately, making clear that:

“Actively notifying the Commission and setting out a clear plan to mitigate the issue at pace is a minimum requirement.” 

The Webinar

The previous week, Harris Hagan’s Managing Partner, John Hagan hosted the International Association of Gaming Advisors (IAGA) Best Practices Webinar on 15 January 2025, titled “Setting the UK Gambling Agenda for 2025: a less political year?”. During the webinar, Andrew Rhodes (Chief Executive of the Gambling Commission) and Grainne Hurst (Chief Executive of the Betting & Gaming Council (“BGC”)) shared their thoughts on various topics, including unlicensed gambling.

Rhodes confirmed that the Gambling Commission has invested in disrupting the illegal, online gambling market during recent years, with some success. However:

“Everyone should accept there has always been an illegal market present and much as different people want to debate the size and value of it, the reality is we need to understand the flow into it and why that happens, as well as preventing its ability to operate at scale.”

Rhodes emphasised that “legitimate” licensees are expected to undertake their own due-diligence on their suppliers and partners to ensure they are not engaged in unlicensed activity facing into GB – expressing concern at why anyone in the licensed industry would want to be in business with a company that is supporting illegal competition.

Rhodes went on to confirm that in 2025, the Gambling Commission will continue to use new capabilities around covert test purchasing and other investigative tools to identify those who are assisting illegal operators, as well as targeting those illegal operators directly – concluding by making clear that where the Gambling Commission feels it is necessary to suspend or revoke the licence of any operator or supplier, they will do.

Meanwhile, Hurst confirmed that disrupting the unlicensed market is a top priority for the BGC, alongside delivering the outstanding elements of the White Paper and making sure that a sensible tax harmonisation is put in place when the new regime is announced later this year. While they are still in the process of formalising next steps, action is being taken following the Gambling Commission’s challenge to the industry last year, and B2B BGC members will soon be required to commit not to provide content to unlicensed operators serving the GB market.

The Method(ology) to the Madness

The recent flurry of warnings by the Gambling Commission regarding unlicensed gambling follow its release last year of a statistics and research paper, Unlicensed gambling – Using data to identify unlicensed operators and estimate the scale of this market – October 2024 (the “Methodology Paper”). The Methodology Paper was a first step for the Gambling Commission in sharing its work in developing its capacity to identify unlicensed operators in GB, in which it explains how it is using an evidence-led approach to disrupt unlicensed gambling.

Focus

Although the Gambling Commission acknowledges in the Methodology Paper that unlicensed gambling can also take place in land-based premises, the paper is focused on the online market ‘where data has the greatest potential to help us make an impact’. The Gambling Commission explains in the Methodology Paper that it has undertaken several stages of work to formulate its approach which include:

Understanding the motivations for consumers to enter the online unlicensed market, and the channels through which they do so

The Gambling Commission is focusing on specific areas of consumer motivation: people who have experienced gambling harms – especially those who are self-excluded; and consumers looking to avoid identity verification.

Identifying unlicensed operators and estimating the scale of usage by GB customers

Web traffic data and gambling behaviour data will be used to estimate the gross gambling yield (“GGY”) of the online unlicensed market, although the Gambling Commission concedes that making an accurate estimate will be challenging, as much activity is deliberately obscured by virtual private networks (“VPNs”).

Methodology

The Gambling Commission will use the following methods to identify and measure the scale of the online unlicensed market:

Google search results to list of search terms

Results to search terms will be monitored on a monthly basis. The search terms will be devised from a combination of industry engagement and consumer research, advice from the Gambling Commission’s intelligence and enforcement teams, and additional desktop research on to identify terms used on affiliate pages such as “not on GAMSTOP” that are used to target particular groups of consumers.

Identify affiliate pages or articles listing unlicensed sites

The Gambling Commission will identify affiliate sites and/or articles that recommend gambling websites targeting specific consumer groups, for instance, “best UK casinos not on GAMSTOP”, by checking for key words on web pages and identifying the presence of outgoing affiliate links.

Extract links to unlicensed gambling sites and obtain web traffic data

Unlicensed sites that are linked from affiliate pages and/or articles will be reviewed to determine whether they are blocked to GB customers. Under the current methodology, the Gambling Commission is able to flag sites that are blocked immediately upon opening but not sites that are blocked upon account registration. Web traffic and average visit duration data is obtained for each of the unlicensed sites using Similarweb, which is a digital intelligence platform that allows access to estimated web traffic data.

Combine web traffic data with research data to estimate spend on the identified sites

To estimate the GGY associated with identified sites, web traffic data will be combined with an estimate of average consumer spending behaviour, the latter of which will be based on data from the Gambling Commission’s Patterns of Play research.

The intended output of the above work will be twofold: (a) a dashboard of unlicensed operators ranked according to current usage by GB consumers, which can be used by enforcement teams to prioritise and target disruption activity; and (b) to allow the Gambling Commission to estimate the likely scale of the unlicensed market for GB consumers.

Limitations

The Gambling Commission acknowledges within the Methodology Paper, that its methodology cannot capture the whole online unlicensed market. For instance, GB traffic from consumers using a VPN.

Other assumptions and limitations include:

The assumption that gambling behaviour on unlicensed sites is the same as on licensed sites;
GGY estimates are based on online slots play only, as it is assumed that a significant proportion of unlicensed gambling activity is slots;
Unlicensed sites are included in the GGY estimate regardless of the average visit duration, including very short average visit durations which could indicate visits where no money is spent or very long durations which could indicate periods of inactivity; and
Not all consumer motivations are currently included in the core search terms.

Next steps

The Gambling Commission has called on the industry to report suspicious activity to the Gambling Commission’s intelligence team at [email protected] or, alternatively, through the following confidential portal: Tell us something in confidence.

Please get in touch with us if you have any questions regarding unlicensed gambling in GB, your due diligence obligations and how to actively monitor your business relationships, or if you would like assistance reporting a suspicion to, or responding to an information request from, the Gambling Commission.

29Nov

White Paper Series: Initial Consultation Response on Statutory Levy and Update on Online Slot Stake Limits

29th November 2024 John Hagan 118

The Department for Digital, Culture, Media and Sport (“DCMS”) announced on 27 November 2024 that the Government will bring forward the statutory levy on gambling operators to generate £100 million for the research, prevention and treatment of gambling harms. The Government has also confirmed online slot stake limits of £5 for adults aged 25 and over and £2 for young adults aged 18 to 24.

Statutory Levy

Gambling Minister Baroness Twycross indicated in her Ministerial Statement that the update is only an initial response to the consultation on the structure, distribution and governance of the statutory levy on gambling operators launched on 17 October 2023 (see our previous blog on the consultation), and that its aim is to publish a further response document in the coming months. The Government maintains its commitment to having the levy in place by the summer of 2025.

The Government has confirmed that the mandated levy will be charged to all licensed operators at varying levels depending on the sector, at a set rate for all holders of a given Gambling Commission licence, with rates accounting for the difference in operating costs and the levels of harmful gambling associated with different gambling activities. “In recognition of the higher rates of problem gambling associated with products online compared to most land-based products, as well as the higher operating costs in the land-based sector, the levy will see online operators pay more towards research, prevention and treatment.”

The Government believes that a mandated levy “will guarantee increased, ringfenced and consistent funding to prevent and tackle gambling harm” and “ensure all operators contribute a fair share”, stating that “under the current voluntary system not all gambling companies contribute equally, with some operators paying as little as £1 a year towards research, prevention and treatment”.

The levy will be introduced via secondary legislation. It will be collected by the Gambling Commission and overseen by a Gambling Levy Programme Board that will have central oversight, and which will in turn be assisted by a Gambling Levy Advisory Group that will provide expert advice on funding priorities and other emerging issues.

Levy funding will be split as follows:

50% will be directed to NHS England and appropriate bodies in Scotland and Wales to develop a comprehensive support and treatment system. This will include referrals and triage, through to recovery and aftercare. So “half of funding to directly benefit NHS-led gambling treatment system”.
30% will go towards investment in gambling harm prevention, which could include measures such as national public health campaigns and training for frontline staff. A lead commissioning body in this crucial and novel area has not yet been appointed, with the Government taking the time to get the important decision on the future of prevention right.
20% will be directed to UK Research and Innovation (UKRI) and the Gambling Commission to develop bespoke Research Programmes on Gambling, undertaking vital research to inform future policy and regulation.

“The current funding system for research, prevention and treatment of gambling-related harms reliant on voluntary donations from industry is no longer fit for purpose. While the industry’s significant uplift in the level of donations in recent years is welcome, we recognise that the quantum of funding is not the only requirement for an effective and equitable system.”

Baroness Twycross, Gambling Minister

The Government emphasises in its initial response that with distribution of funding to the NHS, UKRI and the Gambling Commission, “the gambling industry will have no say over how money for research, prevention and treatment is spent”.

A formal review of the levy system will be conducted within five years, where the structure and health of the levy system will be assessed, and adjustments can be made to ensure that the Government is achieving its aims.

Online slot stake limits

As widely anticipated, stake limits will be set at £5 per spin for adults aged 25 and over and £2 per spin for young adults aged 18 to 24, “bringing online slot games in line with existing restrictions on slot machines in casinos”. DCMS’ press release cites Evidence from the Office for Health Improvement and Disparities and the Gambling Survey for Great Britain which shows that young adults can be particularly vulnerable to gambling related harm with under 25s having one of the highest proportion of respondents scoring eight or more on the Problem Gambling Severity Index of any age group. It also reiterates that online slots are “a higher-risk gambling product associated with large losses, long sessions, and binge play”.

Next steps

Operators are required to maintain voluntary financial contributions to research, prevention and treatment until the levy comes into force, with Baroness Twycross adding that its initial response “should provide sufficient notice to licensees of our approach”.

As stated above, the Government aims to publish its full response to the statutory levy consultation in the coming months, which will also include further detail on the 30% investment of levy funds in gambling harm prevention. The Government notes that the statutory instrument is silent on the distribution of levy funding, including in relation to prevention, and it is pressing on with its initial response and progressing the legislative process to meet its commitment to have the levy in place by the summer of 2025.

In respect of online slot stake limits, these will be subject to an implementation period. This means that, following debates in Parliament, operators will have six weeks from the day the statutory instrument is made to implement the £5 limit and a further six weeks thereafter to implement the £2 limit.

We will provide you with updates in due course but please do not hesitate to get in touch if you have any questions.

Our preliminary thoughts on the initial response

At the heart of the White Paper is a balance between consumer freedoms and choice on one hand, and protection from harm on the other. The White Paper was broadly well received when it was delivered in Parliament, within all sectors of industry, by the NHS, in the third sector and at the Gambling Commission, because the (Conservative) Government had achieved a healthy balance in its reforms; crudely put, there was something in it for everyone. As we said in our inaugural blog on the White Paper in May 2023, however, “it is imperative that the process remains balanced and that all the key stakeholders see comparable progress in relation to their interests”.

The announcement of the bringing forward of the statutory levy by the Labour Government is undoubtedly a momentous day for certain stakeholders and a cause for their celebration, and perhaps unsurprisingly the language is emotive and provocative, with for example the NHS saying problem gambling has “skyrocketed” and resolving to do all it can “to protect gamblers from this billion-pound industry”, and the All Party Group for Gambling related Harm saying that “for the first time the gambling industry will be mandated to pay for the harm they cause”. Even the Government itself in its press release makes more of the £1 some operators have been paying than the £50 million in voluntary contributions by Betting and Gaming Council members this year alone.

That said, we believe that it was always inevitable that the Government (whether Labour or Conservative) would lead with the statutory levy before introducing any measures relating to consumer freedom or choice, such as the long overdue land-based casino modernisation. The new Labour Government had to establish its credentials as being tougher on the gambling industry than the previous government and deliver on its manifesto promise commitment to reduce gambling harm. And we would suggest it was also sadly inevitable that the rhetoric would be critical of industry, even unfair and misleading, particularly at a time when fundamental gambling statistics such as the percentage of problem gamblers in the population are so keenly contested.

But the statutory levy itself was a fundamental plank of the White Paper, so it does not come as a surprise, even if as rumoured the rates transpire to be slightly higher than proposed, again Labour being tougher than the Conservatives. Indeed, industry has been supportive of a statutory levy in principle for some years now. Nor are the online slot stake limits a surprise, with the previous government making a similar announcement before disastrously calling an early General Election. Further, the financial implications of both the statutory levy and online slots stake limits should already be baked into industry projections and should not have a punitive impact, at least in the near future, the risk of course being that the levy rates will again, inevitably, increase in the years ahead.

For all the above reasons, we are not for the moment overly concerned that the Government is heading in a new direction when it comes to gambling reform. This is not a policy area where the new Government might argue that it was left a “black hole”, quite the reverse, it was left a fully-fledged policy developed over many years and wrapped in White Paper, which it would be well advised to adopt and move on with other legislative priorities free from gambling distractions. Nothing has happened this week which was not expected and we remain optimistic that the delicate balance of the White Paper will be delivered by the Government and the Gambling Commission in the year ahead. We will of course continue to monitor for any departure from that course in future blogs.

With thanks to Ting Fung for her invaluable co-authorship.

31Oct

Gambling Commission Annual Report 2023-2024

31st October 2024 Ting Fung 117

The Gambling Commission’s latest Annual report and accounts (the “Annual Report”) for the reporting period 1 April 2023 to 31 March 2024 (the “Period”) was published on 17 October 2024. Key focuses during the Period include the implementation of the Gambling Act Review and the Gambling Commission’s award of the Fourth National Lottery Licence, which led to the first ever change of licensee in the history of the National Lottery.

Performance report

The Annual Report contains a performance report in which the Gambling Commission provides a detailed overview of its delivery during the Period against the five strategic objectives from its 2021-2024 Corporate Strategy. We have summarised some key information from this performance report below, along with other highlights from the Annual Report.

Protecting children and vulnerable people from being harmed or exploited by gambling

Following the publication of the Gambling Act Review White Paper, there were a number of consultations in the Period in relation to proposed changes to the Licence Conditions and Codes of Practice (“LCCP”) and the Remote gambling and software technical standards. Proposals included: (a) improving consumer choice on direct marketing; (b) strengthening age verification on premises; and (c) reviewing socially responsible incentives to ensure incentives such as free bets and bonuses do not encourage excessive or harmful gambling. The issue that proved most controversial related to financial risk checks, with the Gambling Commission reiterating in the Annual Report that this a complex area as it aims to “protect vulnerable people from harm whilst respecting the freedom of others to gamble freely”. Therefore “ committed to a step-by-step approach to implementation and a pilot on the enhanced financial risk assessments to test the process and impacts on consumers.”

The Gambling Commission sets out the several changes it made to the LCCP during the Period including by: (a) setting out its approach to ‘vulnerability’; (b) extending the requirement to participate in GAMSTOP to all gambling licensees that make or accept bets by telephone and email; and (c) adding an additional reportable event that requires all gambling licensees to inform it when they become aware that a person who has gambled with them has died by suicide.

Gambling Commission publications in the Period aimed at improving the breadth and quality of data included:

The Gambling Survey for Great Britain: Statistics on gambling participation – Annual report Year 1 (2023): Official statistics (See Other highlights below for further detail);
Evidence Gaps and Priorities 2023-2026 (July 2023); and
Young People and Gambling Report (November 2023).

2. A fairer market and more informed consumers

The Gambling Commission points out that it has reviewed its approach to tackling non–compliant terms and practices, including the processing of customer withdrawals. Delays to the withdrawal of funds from accounts, (more than 2,400 complaints during 2023) remained the primary consumer complaint during the Period. The Gambling Commission has previously worked with the Competition and Markets Authority and updated the LCCP to clarify licensees’ responsibilities, including the requirement that licensees do not seek to verify information at the point of withdrawal that they had the opportunity to do earlier in the process. In the Annual Report the Gambling Commission reiterates that “Where such practices are identified, we will continue to hold licensees to account.” Please see our blog Account withdrawals: The mask operators cannot hide behind for more information.

In addition to initial outputs from the Consumer Voice research programme, the Gambling Commission has completed 58 website reviews, with 51 websites found to be either complaint or to have minor issues relating to things such as promotional bonus offer terms. The remaining websites reviewed raised more significant issues requiring further investigation and/or escalation.

Keeping crime out of gambling

The Gambling Commission explains that it has continued to work with partners to undertake intelligence-led disruption and enforcement initiatives to contribute to a reduction in crime associated with gambling, stating that “our collection, analysis and sharing of intelligence with other regulators and agencies remains a cornerstone of our work.” It has held discussions with search engine providers to discuss referrals and further action on search results and talks are ongoing to improve its ability to disrupt unlicensed operators.

Key figures in the Period in this area include:

384 cease and desist and disruption notices were issued to unlicensed operators resulting in 136 website restrictions through suspension or IP blocking; and
122 compliance assessments of online and land-based operators, 77 website reviews and 182 security audits were conducted.

In addition, from April 2023, the Gambling Commission also assumed responsibility for collecting the Economic Crime Levy from licensed casino operators.

Optimising returns to good causes from the National Lottery

Returns to good causes which were derived from a combination of the Third and Fourth Licence period totalled £1.7 billion at the end of the financial year. The Period saw the transition of the National Lottery licence from Camelot to Allwyn, who were formally granted the Fourth Licence to operate the National Lottery on 1 February 2024. Subject to the resolution of the legal challenges this licence will run for 10 years.

Key changes to the Fourth Licence include:

A new ‘Incentive Mechanism’ so that all National Lottery products will now make returns to good causes at the same level (meaning Allwyn will only see profits rise if returns to good causes increase); and
A move to an outcomes-based approach that will give Allwyn greater responsibility to fulfil its obligations, while retaining the Gambling Commission’s powers to intervene if they fail to do so.

Improving gambling regulation

The Gambling Commission recognises the need for an upgrade to existing systems in order to “serve the needs of the business more efficiently” and expects this to be completed during 2024 to 2025. Its requirement that licensees send returns quarterly is intended to ensure the information it receives is relevant and timely, and enables it to identify issues arising as early as possible.

Further information on the Gambling Commission’s plans for gambling regulation are set out in its Corporate Strategy 2024 to 2027 published on 8 April 2024, with commitments to be detailed in annual business plans and outcomes published in future annual reports.

Other highlights

Gambling Commission research

In respect of other datasets referred to in the Annual Report, the Gambling Commission’s Cost of Living (2023) research found that:

“1 in 5 gamblers who reported changes in their gambling behaviour (either increased or decreased) said this was entirely due to increased cost of living. In addition, 8.5 per cent of gamblers reported using gambling to supplement their income on a regular basis.”

The Gambling Commission therefore continues to stress the need for operator vigilance during these times of heightened consumer vulnerability.

Gambling Survey for Great Britain

In respect of the Gambling Survey for Great Britain (“GSGB”), which focuses on the types of gambling activities that people take part in and the reasons why people gamble, the Annual Report emphasises that because the GSGB is a new survey, it does mean that it cannot compare GSGB data to data from previous alternative surveys and that, with time, the data collected will grow and enable it to look at trends and comparisons across this data source.

Enforcement?

The Annual Report notes that in 2023 – 2024, enforcement action led to the suspension of one operating licence and £13.4 million in fines or regulatory settlements: a reduction on the previous year. The Gambling Commission acknowledges that it has seen a significant increase in compliance from larger operators at the point of their assessment, with the rate of operators achieving compliant first-time outcomes doubling and the rate for the largest operators almost trebling in the past two years.

In terms of other operational activities, 133 operator licenses were processed and 122 compliance assessments were conducted for online and land-based operators in the Period.

Industry figures and statistics

Gross Gambling Yield (“GGY”) for the British gambling industry in 2022-2023 was £15.1 billion (a 6.8% increase when compared to April 2021 – March 2022) and GGY for the British remote and/or online sector was £6.5 billion in 2022 – 2023 (a 2.8% increase when compared to April 2021 to March 2022).

For the Period, the Gambling Commission’s fee income comprised:

£1.21 million from operator applications (down from £2.05 million in 2022-2023)
£0.75 million from personal licence fees (down from £0.76 million in 2022-2023)
£23.86 million from operator annual licence fees (up from £22.89 million in 2022-2023)
£0.36 million from miscellaneous sources (down from £0.39 million in 2022-2023)

In terms of expenditure, gambling regulation costs in the Period totalled £21.07 million (up from £19.33 million in 2022-2023), and National Lottery functions accounted for £19.34 million (down from £21.58 million in 2022-2023), of which £17.03 million was spent on the National Lottery Fourth Licence competition. Overall, the Gambling Commission’s table of year-on-year expenditure for gambling and National Lottery regulation shows an increase in operational costs since 2019-2020.

What’s next?

In the Foreword of the Annual Report, Gambling Commission Chair, Marcus Boyle and its Chief Executive Officer, Andrew Rhodes, both agree that:

“The next few years provide a once-in-a-generation opportunity to make gambling safer, fairer and crime free.”

The Gambling Commission’s next steps are set out in its Corporate Strategy 2024 to 2027. For further details on the Corporate Strategy 2024 to 2027, see the previous blog from Gemma Boore.

17Oct

Harris Hagan retains top tier rankings in 2025 Chambers and Partners and The Legal 500

17th October 2024 Harris Hagan 109

We are delighted to announce that Harris Hagan has again been ranked in the top tier in both Chambers and Partners and The Legal 500 for 2025.

Chambers and Partners

Harris Hagan has been ranked in Band 1 for Gaming for the 21^st consecutive year.

“The team is first-rate and has extensive experience in the sector. We have full confidence in the ability of the Harris Hagan team to provide us with first-class service.”

Partners John Hagan and Bahar Alaeddini continue to be recognised in Band 1 and Partner David Whyte has been recognised in Band 3. Consultant Hilary Stewart-Jones is ranked as a Senior Statesperson and Senior Associate Gemma Boore together with Associate Francesca Burnett-Hall, continue to be recognised as Associates to Watch.

Together our lawyers constitute 6 of the 25 gaming lawyers recognised in the directory, befitting our status as a leading specialist gambling law firm. We were also invited by Chambers to write the introduction to the practice area.

We received many positive testimonials, including:

“Every lawyer I have dealt with at the firm is excellent; they know exactly what is going on in the market. This means they are able to provide thorough but also commercial and pragmatic advice.”

“John Hagan is first-class. He is one of the most experienced and impressive gaming lawyers.”

“Bahar has deep relationships in the industry and an ability to solve complex gaming issues in a client-friendly way. She is second to none in that regard.”

“David is extremely knowledgeable of the gambling industry. He is able to provide very thorough advice, whilst also being very direct, pragmatic and to the point.”

“Hilary’s experience of the market is invaluable.”

“Gemma has done excellent work and we would welcome any opportunity to continue working with Gemma in the future.”

“Francesca is very capable, always available and very prompt with every task.”

The Legal 500

Harris Hagan continues to be ranked as Tier 1 for Gaming and Betting in the UK.

“Harris Hagan is, by some margin, the leading specialist firm in the U.K. gaming industry. Their team has unrivalled expertise in gaming regulation and licensing.”

Managing Partner John Hagan, alongside Consultant Hilary Stewart-Jones continue to be listed in The Legal 500’s Hall of Fame, Partner Bahar Alaeddini is listed as a Leading Partner, and Partner David Whyte is listed as a Next Generation Partner. Senior Associate Jessica Wilson is also recognised as a Leading Associate.

We received many positive testimonials, including:

“They have seen it all, and are able to bring their deep experience and deep industry knowledge and connection to bear to provide high quality, pragmatic advice.”

“Their ability to understand our industry in-depth makes them stand out from the rest. They are so invested in understanding all aspects that it enhances the knowledge and guidance they provide.”

“John Hagan is the most prominent U.K. gaming lawyer and is a widely known and respected figure in our industry.”

“‘Friendly, approachable, advice and guidance is not always done in legal jargon, they have a great way of describing a situation in layman’s terms. David Whyte covers all these areas with excellence.”

We would like to thank all of our clients to whom we are incredibly grateful for your continuing instructions and for helping us achieve these impressive rankings.

26Jul

Account withdrawals: The mask operators cannot hide behind

26th July 2024 Jessica Wilson 125

On 18 July 2024, the Gambling Commission published a blog by Chief Executive, Andrew Rhodes, on its expectations on account withdrawals, which comes a year after it published its concerns regarding delays customers were experiencing when attempting to withdraw funds.

Whilst the Gambling Commission has seen a reduction in customer complaints regarding withdrawals, they remain the number one subject of complaints the Gambling Commission receives across all operator sizes. As stated in its previous blog, the Gambling Commission reminds operators that it is not acceptable to introduce friction when a customer tries to withdraw from their account, rather than when they deposit into the account, nor should they place their commercial interests over those of their consumers. The Gambling Commission’s blog details several issues it has encountered as part of its compliance work.

Issue 1: Explaining the reason for requesting additional information from the customer or the reason for not paying out

The Gambling Commission has seen operators requesting additional information from customers, as part of the withdrawal process without explaining to the customer the reason for requiring such information.

Under licence condition (“LC”) 17.1.1, operators must obtain and verify a customer’s identity before the customer is permitted to gamble. A customer request to withdraw funds must not result in a requirement for additional information to be supplied as a condition of withdrawal, if the operator could have reasonably requested that information earlier.

The Gambling Commission has reminded operators that it wants transparency for consumers on withdrawals, meaning operators “should make proper efforts to explain to customers what the checks and restrictions are” and that “customers should be informed of the reasons why their withdrawal has been delayed”.

The Gambling Commission has issued a warning that “where we find evidence that an operator has deliberately misled a customer in its communications with them, we will consider the need for regulatory action”.

However, the Gambling Commission does acknowledge that, where there is a knowledge or suspicion of money laundering offences being committed, operators must ensure customers are not tipped-off, which could result in committing an offence under the Proceeds of Crime Act 2002 (“POCA”).

Issue 2: Timing of requests for additional information

The Gambling Commission has seen cases where operators have asked a customer to provide source of funding information after a withdrawal request has been made, with the operator withholding the account balance until the source of funding requests have been satisfied.

Operators are expected to monitor customers’ accounts on an on-going and risk-sensitive basis. The lack of source of funding evidence, in this case, did not prevent the customer from being allowed to make deposits and gamble their funds.

The Gambling Commission has reminded operators that that if they do not have any regulatory concerns about a customer (such as suspicions of money laundering), then there is no valid reason to delay the payout of the withdrawal. Operators “should not…continue to accept deposits indefinitely and then seek to rely on their anti-money laundering procedure to frustrate a withdrawal request”.

Issue 3: Third-party payment methods

The Gambling Commission is aware of instances where an operator has suspected customers funding their accounts through third party payment methods, but only verifying that payment method after a withdrawal request has been made.

The use of third-party payment methods is classified as high risk in the Gambling Commission’s money laundering and terrorist financing risk assessment for the British gambling industry. It is therefore usual for operators to have terms and conditions in place to prevent customers using such payment methods. Where there is suspicion that an account may be funded by a third party, operators should ensure that any investigation is conducted promptly. The Gambling Commission considers it unfair to customers if operators accept deposits from third-party payment methods, but only makes enquiries when a withdrawal request is made.

Issue 4: Confiscation of customer deposits

The Gambling Commission has been made aware that operators sometimes seek to confiscate a customer’s deposit balance, either due to money laundering suspicions or because of a suspected breach of terms and conditions.

The Gambling Commission reminds operators of the offences and statutory requirements under POCA and the Terrorism Act 2000, and that confiscating or returning account funds where there is knowledge or suspicion of money laundering or terrorist financing could result in committing an offence, unless a defence has been sought.

The Gambling Commission further reminds operators of LC 7, which requires operators to ensure that the terms on which gambling is offered are not unfair. The Competitions and Markets Authority has published guidance on unfair terms, with one principle being that consumers should be allowed to withdraw their deposit balance at any time without restriction (except to comply with general regulatory obligations, including anti-money laundering and fraud prevention).

Other reminders

The Gambling Commission’s blog ends with some other useful reminders for operators:

Operators should not have terms that give them undue discretion as to when and how those terms are applied, as such terms could be unfair, as set out in the Gambling Commission’s guidance. For example, they should not have terms that say the operator “may” or “reserves the right” to void or withhold winnings in situations.
Operators must comply with consumer protection laws and treat customers in a fair, open and transparent way.
There may be reasons for an operator to seek further information from a customer for safer gambling purposes as part of a customer interaction, but operators should be transparent with their customers that the reason for requesting more information is for safer gambling purposes. However, the Gambling Commission confirms that it would not be “fair, transparent or necessary to delay or prevent withdrawals purely for customer interaction purposes”.

The Gambling Commission lastly states, “it is imperative that operators review their terms and practices on withdrawals on an ongoing basis, to ensure they are acting compliantly and are treating their customers fairly.”

The Gambling Commission’s blog makes it clear that a delay in processing a customer withdrawal could unmask other areas of non-compliance, including failing to conduct customer due diligence correctly, allowing a customer to gamble without sufficient identity or source of funding checks taking place or failing to verify third-party payment methods before being allowed to gamble

Attempting to correct these mistakes at the point a customer withdraws funds is a mask operators cannot hide behind, as the Gambling Commission has shown that it can see through these actions. Operators should review the Gambling Commission’s guidance in its blog and review their practices to ensure they do not make similar errors. The Gambling Commission’s confirmation that it is not afraid to take regulatory action is a clear warning to operators.

However, operators should not lose sight of their anti-money laundering responsibilities and obligations under POCA, the Terrorism Act 2000, the Licence Conditions and Codes of Practice, the Gambling Commission’s anti-money laundering guidance for casino businesses and for non-casino businesses, and the Money Laundering and Counter-Terrorist Financing (Information on the Payer) Regulations 2017.

If you have any questions or concerns regarding account withdrawals, your policies and processes, your terms and conditions, or your anti-money laundering and counter-terrorism financing responsibilities and obligations, please do reach out to your usual Harris Hagan contact, or get in touch with us here.

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UK Gambling Law