There have been several high profile cases in the last 12 months in which operators (both remote and non-remote) have been on the wrong end of regulatory sanctions and financial penalties imposed by or agreed with the Gambling Commission.  In October 2018, Paddy Power Betfair reached a regulatory settlement of £2.2 million following breaches of social responsibility code 3.4.1.  In the same month, Mark Jarvis Limited agreed to pay £94,000 for breaches of the same social responsibility code.

In March 2018, Bonne Terre Limited t/a Sky Betting and Gaming were found to have weaknesses in their self-exclusion procedures and to have breached social responsibility code 3.5.3, which led to a divestment of gross gambling yield of £241,894 and £750,000 financial penalty.

Electra Works Limited received a financial penalty of £350,000 for breaches of conditions relating to marketing and advertising.

It is rumoured  that several operators are currently approaching the final weeks of Gambling Commission regulatory action and it is reasonable to expect a similar number of cases being reported for non-compliance of licence conditions and codes of practice in 2019.

On Tuesday 12 February 2019, the Gambling Commission announced further rules for online operators intended to make gambling safer and fairer.  Any new rules place  a further requirement on operators to ensure all that policies and procedures comply with the changes and these new rules increase the  focus on online operators.

The Gambling Commission reported that until now, online gambling businesses had been allowed 72 hours to carry out age verification checks.  Winnings could not be withdrawn until age verification had been completed.

To further guard against the risk of children gambling, the new rules mean that operators must verify customer age before:

  • The customer can deposit funds into an account
  • The customer can gamble with the licensee with either their own money or a free bet or bonus.

This is a significant change and requires verification prior to any gambling taking place.

The Gambling Commission stresses that this also applies to those customers who want to access free to play versions of gambling games on licensees’ website.  Whilst free to play games , with no prizes, are not technical gambling, there is no legitimate reason, say the Gambling Commission, why they should be available to children.

The new rules do set out information as to what is expected of licensees:

  1. Licensees are expected to verify as a minimum, the name, address and date of a birth of a customer before allowing them to gamble.
  2. To ask for any additional verification information promptly.
  3. To inform customers before they can deposit funds of the types of identity documents or other information that might be required, the circumstances in which the information might be required and how it should be supplied to the licensee.
  4. To take steps to ensure that information on their customer’s identity remains accurate.

One of the complaints during the last 12 months has been that operators do not ask for this information until the customer wants to cash out.  The changes mean that operators must ask for the ID as a condition of gambling rather than just cashing out.

Neil McArthur, Chief Executive of the Gambling Commission, was quoted on the website as saying “these changes will protect children and the vulnerable from gambling related harm and reduce the risk of crime linked to gambling.  They will also make gambling fairer by helping customers collect their winnings without unnecessary delay.  Britain’s online gambling market is the largest regulated market in the world and we want to make sure that it is the safest and the fairest”.

Jeremy Wright, Secretary of State for DCSM, agreed and said that this extra layer of protection for children and young people is added so as to protect the vulnerable.

The new rules come into force on 7 May 2019.

After years of lobbying and debate, the Department for Digital, Culture, Media and Sport finally issued its much-anticipated Consultation on society lotteries and their financial limits on 29 June, via Tracey Crouch MP, the Minister for Sport and Civil Society.

The sector has long been campaigning for an increase in the financial limits which apply to society lotteries, which currently stand at annual total proceeds (ticket monies) of £10m, proceeds per draw of £4m and a maximum top prize of £25,000 or, if more, no more thank 10% of the proceeds. This effectively means that, at present no-one can ever win more than £400,000 as a top prize in a society lottery.

Of course, this is all designed to protect the position of the National Lottery as being the only lottery product where one might hope to win a life-changing sum. However the society lottery sector has argued that the current financial limits hamper its ability legitimately to raise money for good causes and the Government is now re-evaluating the position, recognising that society lotteries are “a fundamental part of the giving landscape” and acknowledging the views of many charities who say that money from society lotteries and the National Lottery are “complementary sources of funding that enable us, in different ways, to carry out our vital work.”

The Gambling Commission’s (“GC”) advice to Government is that the recent growth of the society lottery sector has not been to the detriment of National Lottery sales. The pervading view currently seems to be that the two can peacefully co-exist and that, indeed, the society lottery market might even encourage participation in the National Lottery.

This Consultation, then, seeks to enable the society sector to grow in a sustainable manner and in a way that is complementary with the National Lottery. The Government’s “preferred options” are to:

  • increase the per draw sales limit to £5m;
  • increase the annual sales limit to £100m; and
  • increase the per draw prize limit to £500,000.

Whilst the annual limit is perhaps what the sector was after, many will be disappointed with the proposed modest increases for individual draws. The prospect of an increase to a £10m individual draw limit remains on the table, though – but so does cutting it to £2.5m, or leaving it as it is. Government is also looking at leaving the annual proceeds limit in place, or raising it only to £50m rather than £100m.

All of this only applies to large society lotteries, licensed with the GC. For small society lotteries registered with Local Authorities, the Government has no preferred view; instead, the Consultation suggests leaving matters as they stand (ticket sales of £20,000 per draw and £250,000 per year) or raising them to £30,000 or £40,000 and £400,000 or £500,000, respectively.

There is no doubt in my mind that this constitutes a pivotal point for the society lotteries sector and that what emerges as a result of this Consultation will shape its future for many, many years to come.

It is therefore essential that all in the sector and anyone with an interest in using lotteries (or raffles, which are the same thing in law) have their say before this Consultation closes at noon on 7 September. A link enabling you to do so is here:

We will, of course, report on the outcome in a future edition of our Newsletter.

Tracey Crouch’s announcement on 17 May regarding Fixed Odds Betting Terminals (“FOBTs”) will not have escaped your notice.

The Minister for Sport and Civil Society set out the Government’s proposed move to cut the maximum permitted stake on FOBTs (Category B2 machines) from £100 to £2. No definite date for the implementation of the change has been set, but it is expected to take effect within a year. The new limit can be introduced via secondary legislation, thus avoiding the need for the proposal to go through the protracted Parliamentary process which would be associated with amending the Gambling Act 2005 (“the Act”).

This is, without doubt, one of the greatest shake-ups for the gambling industry since the Act came into force in 2007, and it has left bookmakers examining which of their shops might cease to be profitable when stakes on FOBTs are slashed. Some operators estimate that as many as 40% of their shops will become loss-making as a result of the change, with “a proportion” being at risk of closure. There is talk of some 21,000 job losses, and of a reduction in the payments to support British horseracing of £290m, by 2020.

The move has also left the Treasury scratching its head as to how to cover the loss of revenue that will be felt between now and 2020. Machine Games Duty stands at 25% and estimates place the deficit at £1.1bn. The Government has said that it will increase Remote Gaming Duty (which is currently set at 15% of profits) to stop the gap, although the free-market think-tank, the Institute of Economic Affairs, has warned of “unintended consequences” of the reforms and predicted that taxpayers may have to make up the shortfall in Treasury income.

In reaching its decision, the Government pledged that it would “take a stand”. Culture Secretary, Matt Hancock, said: “When faced with the choice of halfway measures or doing everything we can to protect vulnerable people we have chosen to take a stand. These machines are a social blight.”

FOBTs currently enable players to gamble up to £100 every 20 seconds and, with 33,000 machines in betting shops and over 230,000 individual sessions in 2015-16 during which the player lost more than £1,000, they have commonly come to be referred to as the “crack cocaine of gambling”.

The Gambling Commission’s (“GC”) response to this FOBT announcement has been coloured by its formal advice to Government (provided under s26 of the Act), which was published on 19 March. The GC broadly recommended a reduction in maximum stakes (including those for Electronic Roulette) to £30 for games that have the potential for players to lose large amounts of money in a short space of time, with a reduction in slots stakes to £2.

The Government’s proposal therefore appears to go further than the GC’s suggestion. However, the GC also proposed other measures, such as limit-setting and tracked play across all machines. Much of the GC’s input has been accepted by Government, and this led the new GC Chief Executive, Neil McArthur, to say: “We’re pleased Government has supported a comprehensive package of measures to protect consumers, and that this includes a substantial stake cut. Whilst we welcome the reduced stake, that alone will not be enough to address the risks of harm that can come from all forms of gambling.”

So, in addition to the stake cut, Government is heavily engaging with the GC in improving player protection on Category B machines generally and, more importantly, online. This initiative specifically surrounds age verification, terms and conditions, identifying risks to players and customer interaction. In the absence of voluntary action, the Government has declared its intention, in collaboration with the GC, to force through legislation to ensure that operators comply.

Government also intends to crack down on gambling advertising and expects regulators, broadcasters and the industry to be compliant. A package will be rolled out this year, designed at protecting the most vulnerable, and will include a major responsible gambling advertising campaign.

Government has also commissioned a study to be carried out by Public Health England, to improve the available evidence on treatment for problem gambling – and it seems that the GC is likely to “strengthen” the current voluntary contributions system towards research into, education on, and treatment of problem gambling. I would not be surprised to see contributions soon becoming mandatory, and set as a percentage of turnover.

Finally, and this will be of interest to readers operating in the lotteries sector, the Government intends, as part of the next National Lottery competition, to assess whether the age limit for participation should be changed from 16 years old. One can only assume that the intention is to increase this to 18 years old. Whether this change will translate into the society lottery market remains to be seen.

We will, of course, keep a close eye on all developments and keep you informed in future editions of our Newsletter.


The maximum stake on fixed-odds betting terminals (FOBTs) will be reduced to £2 under new rules unveiled by the government this morning. Currently, people can bet up to £100 every 20 seconds on electronic casino games such as roulette. This change is focused on the impact it has on problem gamblers but it will have a dramatic effect on betting companies, and will reduce Government revenue from taxation by a significant amount too. The Gambling Commission recommended a medium ground of reducing the maximum stake to £30 and stated at the Woods Whur Gambling Conference that this was an evidence-based figure. However, the Government have ignored their experts and gone with the headline grabbing change.

Minister Tracey Crouch said reducing the stake to £2 “will reduce harm for the most vulnerable”. We will have to wait and see what impact this will actually have with problem gamblers/gambling and whether online gambling ends up being the winner for multi-platform operators.

High Street bookmakers have warned it could lead to thousands of betting shops closing. William Hill, which generates just over half its retail revenues from FOBTs, described the Government’s decision as “unprecedented” and warned that 900 of its shops could become loss-making, potentially leading to job losses. It said it’s full-year operating profit could fall by between £70million and £100million. Provision for this will have been made as the industry had expected this cut but hoped the Gambling Commission suggestion of £30 stake could save shops and jobs.

Tom Watson, Labour’s deputy leader and Shadow Secretary of State for Digital, Culture, Media and Sport, told the BBC’s Today programme: “The great tragedy of this is [that] for five years now pretty much everyone in Westminster, Whitehall and in the country has known that these machines have had a very detrimental effect in communities up and down the land. The bookmakers have chosen to take a defiant approach, trying to face down Parliament, really, with a very aggressive campaign.”

The Government’s consultation into gambling machines found consistently high rates of problem gamblers among players of FOBTs “and a high proportion of those seeking treatment for gambling addiction identify these machines as their main form of gambling”.

Ms Crouch said FOBTs were “an outlier in the world of high-street gambling because of the speed with which it is possible to lose large amounts of money” .She said the £2 limit would “substantially” reduce harm and protect the most vulnerable players. “Even cutting to £10 would leave problem gamblers, and those most vulnerable, exposed to losses that would cause them and their families significant harm.”

It will be very interesting to see how the betting industry reacts to these changes. FOBTs were originally introduced into betting shops before the Gambling Act 2005 was introduced. They successfully argued that these new machines were not bound by the stakes and prize limits of the time. They persuaded those who opposed them that they were not gaming machines but were a fixed bet due to the status of the determination of winners. A High Court challenge was fended off by a voluntary agreement as to the number allowed in each shop and a maximum stake and prize. This heightened status was preserved when they were categorised as B2 machines under the Gambling Act 2005.

The Betting Industry has proved itself to be innovative and prepared to fight for its position on the High Street. It will be interesting to be involved in the next stages of this story, which doesn’t seem to be over just yet.

To read the full review of gaming machines and social responsibility measures click on the link below.

We would like to pass on our thanks to Simon Thomas for letting us use the auditorium in the Hippodrome Casino and also to our external speakers, Philip Kolvin QC, Ben Haden from the Gambling Commission and Kerry Simpkin from Westminster Council.

We had a fantastic mixed audience from all parts of the gambling industry – online, traditional land based betting and casino operators, bingo operators, the Lotteries sector – a broad spectrum of clients and also representatives of a number of licensing authorities.

Philip Kolvin opened up our conference and gave a fantastic presentation on risk.  A significant number of delegates commented during the break how thought-provoking this was. Philip was followed by Andy who dealt with review of recent cases and issues. There are some significant cases of note in Gambling Law as the Regulator has definitely sharpened its focus of dealing with problem operators.

James Thompson, the Head of our Regulatory team then looked at the significant issues of the sentencing guidelines changing on prosecutions for regulatory breaches, and also some very topical issues in relation to data protection and the changes in legislation. Big thanks to James who had to leave home in Newcastle at 3.30 in the morning so as to get to London to deliver his presentation.

Anna Mathias gave the audience her lotteries update which came with perfect timing, as she has just been appointed to the Board of the Lotteries Commission for Great Britain.  The lotteries operators in the audience found her update particularly interesting and pertinent to their sector.  We are very proud that she now sits on the Board of such an important and worthwhile organisation.

In the second half of the conference we had Ben Haden from the Gambling Commission who gave a very interesting insight into the national policy being promoted by the Gambling Commission in 2018. Some interesting changes of focus can be seen in his presentation as the direction of travel for the GC starts to change.

After Ben gave us the national picture, Kerry Simpkin highlighted the Gambling perspective from Westminster Council, explaining what their Licensing Authority expects to see in terms of risk assessment and how their new statement of licensing policy is going from 60 to 353 pages.

Andy and Anna brought the conference to a close with a compliance, regulation and challenges presentation.  This gave the audience a good understanding of some of the regulatory impacts that are challenging  and will further challenge the gambling sector.

We thoroughly enjoyed the day and in particular, the questions and issues raised by delegates in my wrap up session.

If you would like a copy of any of the materials used at the conference, please email, who will be happy to assist.

If there are any questions from those who attended the seminar or those who unfortunately could not attend, then Andy, Anna, James and myself would be delighted to deal with those direct enquiries.

Paddy Whur

Anna has been retained as standing adviser to the Board and its membership for around a decade and we believe that this appointment will, amongst other things, facilitate the free-flow of on-the-spot advice on regulatory matters at Board meetings.

Anna is pleased to accept this appointment and is keen to support the Council in any way she can.

This is a pivotal time for the society lotteries sector. We are seeing the amendments to financial limits on proceeds, profits and “good causes” percentage being considered by Government, dealing with the latest Licence Conditions and Codes of Practice changes focusing on society lotteries, digesting the latest Audit Report on the National Lottery and anticipating the next National Lottery bid competition.

At the same time, the sector is going from strength to strength, with over £255m being raised for good causes last year, based on Gambling Commission figures – a rise of over £43m on the previous year. The contribution to the “good cause” out of ticket sales also rose from an already impressive 43% to 43.6%. During the same period, the Lotteries Council also saw its biggest ever increase in membership – up by 12% year-on-year, with a particular increase among Local Authorities who run lotteries – their membership swelled from 5 to 22.

The Lotteries Council is an influential and powerful body when it comes to lobbying for changes in the society lotteries sector, to maximise the amounts raised for good causes whilst, at the same time, promoting social responsibility.

Anna Mathias has been working with Walker Morris to advise Football League clubs on gambling advertising on their kit, after the Magpies were fined by the FA for displaying an advertisement for a betting company on its youth team shirts

Anna Mathias has collaborated with Walker Morris LLP in issuing urgent advice to Clubs in the Football League regarding the display of gambling advertisements on kit. This is in the wake of Newcastle United receiving a £7,500 fine from the Football Association after admitting a breach of its Rules by allowing the logo for its main sponsor, China-based betting firm Fun88, to appear on its youth team shirts. The advice is attached.

The Gambling Commission (“GC”), in its latest E-Bulletin, has reminded operators that they must ensure that their licence sits within the correct fee category.

Due to the timing of the coming into force of the Gambling Act 2005 and its associated transitional period, July every year sees the issuing of the bulk of annual fee demands. Your annual fee must be paid on or before the anniversary of the issuing of your operating licence.

Gambling operators are required to provide three years’ financial projections when they apply for an operating licence, and the application and annual fee are dictated by gross gambling yield (“GGY”). GGY is, broadly speaking, defined as the total amount received in stakes minus prizes paid out and estimating this, particularly in the case of a start-up, can be an art rather than a science – expectations may be exceeded, or not be met.

This means that your operating licence may be sitting in the wrong fee band and that you may be paying too much, or too little for your annual fee. I often am asked by clients as to what they should do, or would have to do, if this proves to be the case and I know that it does cause some anxiety.

The simple answer is that you must apply for an operating licence variation to either go up, or drop down, a fee category (or more).

There is some good news: the GC’s advice is that the variation process should be completed “as soon as possible” – this suggests to me that it will not penalise operators who have already inadvertently slipped into a higher fee category than originally envisaged, for example. Of course, those who may be aware that they are in the wrong category and have failed to disclose it to the GC, or who are deliberately under-declaring their GGY, are in breach of their duty under the Licence Conditions and Codes of Practice to co-operate with the GC in an open and transparent manner and face a real prospect of enforcement action.

The other piece of good news is that the GC fee for altering your GGY band – whether up or down – is a fixed fee of only £25.

The application may be made via the eServices link on the GC website. Please contact me at, should you require any assistance.

In this article, Andy Woods looks at the new version of the Licence Conditions and Codes of Practice (“LCCP”) and, in particular, highlights some of the key changes.

In many ways the LCCP should be the heartbeat of any gambling business and should form the basis of policies and procedures implemented by all gambling operators.  The Gambling Commission (“GC”) defines the LCCP as setting out “the requirements you must meet in order to hold your operating licence and your personal licence.  It is a very important part of running your business…”

It is a general requirement of the LCCP that all operators keep themselves up to date with any changes to legislation and to the LCCP and it is extremely important that operators understand that the LCCP is a changing document and updates and that amendments are made regularly, to take into account developments and innovations in the industry and to set out the most effective way of promoting the licensing objectives, in particular, promoting social responsible gambling.

The LCCP is not a “one size fits all” document, as there are sector specific sections and, if at all possible, the GC will make it clear what it expects operators to achieve in certain policies and procedures but allows them to write their own policies and procedures to deal with its requirements.  What is relevant to a Mayfair Casino dealing with high stake customers may not be relevant to an operator who only trades one betting shop.  However, the general principles that both will have to abide by remain the same.

The latest LCCP came into effect on 4 April 2018 and there are particular changes relating to Society Lotteries and the regulatory data that is to be provided to the Gambling Commission.  These were the two matters that the Gambling Commission consulted on in 2017.  There have also been minor changes to the social responsibility code provisions 3.5.3 and 3.5.4 and an update to the reference for the online portal for information at 15.3.1.

  1. The requirement to report the number of Suspicious Activity Reports (“SARs”) on regulatory returns has been removed and the information on discounted relationships will be collected through the key events reporting mechanism (via the eService Portal on the GC website). This change to the LCCP requires discounted relationships to be reported alongside information on SARs as key events.
  2. Information about game faults which result in over- or under-payment to customers needs to be reported as a key event.
  3. The existing requirement to report group advertising to a new jurisdiction has been widened to include a new requirement to report where there has been sustained/meaningful generation of the 3%/10% threshold being passed for the wider group.
  4. The definition of “low frequency lottery” has been updated to include those lotteries offered by local authorities.
  5. A new social responsibility code provision has been added to require operators to publish the proportion of lottery proceeds returned to the purposes of the society or local authority.

I am sure that some of the above points will come up at our seminar at The Hippodrome Casino on 8 May 2018.  There are still a few places available and if you would like to come please contact

If you have any questions in the meantime on the above, please do not hesitate to contact me.

The Gambling Act requires the Gambling Commission (“GC”) to provide advice to the Government on all matters gambling, including its effects on the public. On Monday, it provided its “formal advice” to the Department for Digital, Culture, Media and Sport on the review of gaming machines and social responsibility – which, as we all know, has focussed primarily on B2 machines, or Fixed Odds Betting Terminals (“FOBTs”).

The advice was not circulated by the GC as an update or in a newsletter, which I find surprising- I heard about it on the news on Radio 4 (some of you will know that this is my station of choice) – although it is available on the GC website, here:–-formal-advice.pdf

It’s fair to say that the GC’s advice has caused some consternation among those campaigning for a reduction in the maximum stake for FOBTs to £2. This is because the GC has opted for a stake limit “at or below £30”.

Some might think that this represents the GC sitting on the fence – after all, “at or below £30” could mean anything between £0 and £30 – but the GC is at pains to point out that the final decision is one for Ministers to make.

The GC’s advice centres around the need to reduce the risk of harm to consumers – who are the focus of its present strategy – particularly the vulnerable. It believes that action needs to be taken, not just by government, but also by operators and the GC itself. The conclusion in the formal advice is that “the case has been made for action to be taken on B2 machines to reduce the risk of harm, and that this should include a stake cut.”

So, why has the GC not fallen in with the £2 maximum stake being campaigned for so strenuously by campaigners? The answer it gives is that it has identified four criteria to take into account in setting any maximum gaming machine stake. These are:

  • Impacts on gambling harm – the GC is concerned that merely reducing the stake might encourage players to adopt riskier strategies, play for longer or switch to other gambling products, particularly online;
  • Categorisation of gambling premises and a concern that any proposed change might mean that a “harder” form of gambling product is available in arcades, bingo halls and pubs, which are less tightly regulated than the betting and casino premises in which FOBTs are currently allowed;
  • The need to preserve consumer choice and to avoid eliminating the very popular game of roulette from betting shops; and
  • The need to take everyone’s views into account, being those of stakeholders such as Parliamentarians, Local Authorities, operators, faith groups and local residents.

It is between these competing considerations that the GC says it is for Ministers to decide. However, its advice does seek to draw a distinction between B2 slot-type machines (for which it believes that there is a case for limiting stakes to £2) and those that offer roulette, for example – the most popular game played on B2 machines – (for which its view is that the maximum stake should be £30 or less).

The GC also believes that limiting stakes is not enough to deal with gambling-related harm, and its prevention: it favours a comprehensive approach, and believes that there is a “strong case” for making tracked play mandatory across all B1, B2 and B3 machines, giving consumers access to information that will help them keep track of their play and make informed decisions about whether to continue gaming.

We’ll be monitoring this proposal carefully, as it will affect a large number of operators. The GC’s formal advice presents various matrices relating to the costs and benefits of introducing tracked play on this scale, but admits that, so far, the GC has “only limited information on the costs”, so we will have to wait to see if and how this proposal develops.

The GC’s advice has been met with a great deal of disquiet from campaigners pushing for the maximum stake on FOBTs to be reduced to £2. Tom Watson, Labour’s Deputy Leader, called the advice “deeply disappointing”, and accused the GC of having “caved in to industry pressure”. Carolyn Harris, the Labour MP who chairs the all-party Parliamentary group investigating FOBTs, said that she was confident that “Government will see past this and do the right thing, as the moral argument has been made so overwhelmingly for £2 [stake]”. John White, Chief Executive of the anti-FOBT amusement machine industry trade organisation BACTA, also weighed in, saying that “whilst a stake reduction is a step in the right direction, merely reducing this to £30 is still dangerously high…With a 20 second play duration on FOBTs, the proposed £30 stake will generate a loss of £90 within one minute. Within 10 minutes it is £900… [this] does not do enough to protect the consumers who are vulnerable.”

The GC says that it has drawn on a “a broad evidence base”, including on data from the Responsible Gambling Strategy Board and 20 billion plays on B2 machines. BACTA have rejected this as being “drawn from a narrow interpretation of a limited range of evidence and [focussed] on the theoretical rather than the reality.

Matt Hancock, the Culture Secretary, is rumoured still to favour limiting the maximum FOBT stake to £2, but he is apparently under pressure from the Treasury, who get £700m in machine gaming duty every year, a large proportion of which is represented by revenue from FOBTs.

A decision by Government is expected in the next couple of weeks and we will, of course, update you in future editions of our Newsletter.