Posted by Woods Whur | Uncategorised

On 3 December, the Gambling Commission (“GC”) launched its consultation on proposed changes to its Testing Strategy for compliance with its Remote Gambling and Software Technical Standards. The paper proposes significant and wide-ranging reform which many in the remote gambling sector will welcome. This follows hard on the heels of the GC’s announcement that it has signed up to an international pilot to streamline testing standards.

Both of these developments highlight the need for change. The number of operators who have to comply with the Technical Standards has increased significantly of late, with the requirement from 1 November last year for all operators transacting with, or advertising to, customers in Great Britain to have a licence issued by the GC. This has caught an additional 150 operators, bringing the total number of licensed operators in the remote sector to almost 700. Furthermore, 31 March this year saw the coming into force of Licence Condition 2.2.1, which means that operators licensed by the GC must only use software supplied by a provider that is itself licensed by the GC.

Licence condition 2.3 of the GC’s Licence Conditions and Codes of Practice (“LCCP”) requires compliance with the Remote Gambling and Software Technical Standards, and the Testing Strategy sets out the timing and processes that provide operators with the means to comply. The aim is to promote the licensing objective of ensuring that gambling is conducted in a fair and open manner and the proposed changes seek to simplify and streamline the testing requirements, while at the same time enhancing consumer protection and ensuring that the Strategy is clear, transparent and efficient and that it represents an effective regulatory tool that is fit for purpose.

The first proposal is to simplify the existing “traffic light” system, which classifies the various testing requirements and associated risks linked to various elements of game development as red, amber or green, each of which corresponds to a different level of required scrutiny. The GC is suggesting abolishing the amber category, which will provide greater clarity – those aspects that require independent external testing, and those that can be tested in-house.

Secondly, and in a move that I am sure will be broadly welcomed by the industry, the GC proposes bringing in definitions, and worked-through examples, of software amendments that will be classified as “major” and “minor”. Currently, any amendment to a previously-tested product that affects game fairness, critical files or digital signatures must be re-tested externally. However, it is possible for there to be a modification to critical files or digital signatures, such as, for example, a change to the sound functionality of a game that has no effect on the game’s logic or mathematics, which has no bearing whatsoever on the game’s fairness. The GC proposes classifying such changes as “minor” and these will not need to be externally tested. The only changes to previously-tested games that will need independent external testing are those that do affect the fairness of the game.

It should be noted that this change will not remove the requirement for the pre-release testing of new games. However the GC proposes to simplify the process of submitting the test results for these, and for amendments affecting game fairness, by allowing it to be done via an eService system.

Another proposed change is to cases where a modification to the gambling platform or random number generator (“RNG”) affects multiple games. Currently each and every game would need to be externally tested. The GC is proposing replacing this requirement with one to test a representative sample of the games affected – and it suggests leaving it up to the operator to determine what an appropriate sample is.

In contrast, where a game is rolled out across multiple channels, such as where, for example, a game originally released as a flashgame is redeveloped as HTML 5, the GC is continuing to insist that each channel is separately tested. This is because some bugs are often limited to a particular channel, with resulting impacts on customer fairness.

Currently, there is of course a requirement on operators to ensure that gambling is conducted in a fair and open way. However the GC is not convinced that operators are sufficiently monitoring, recording and reporting their return to player, or RTP, ratio in such a way that both overpayments and underpayments to customers are picked up. It proposes introducing a specific requirement that operators must monitor the ongoing performance of games and that the RTP for each channel for a game must be independently scrutinised.

Because many of the proposed changes envisage leaving more responsibility for testing, monitoring and compliance in the hands of the individual operator, the GC is suggesting introducing a requirement that operators undergo an annual audit by one of its approved test houses, in order to reassure the GC that games are being appropriately tested and deployed in the live environment.

The GC proposes that these changes will not come into force before July 2016, which means that the first annual audits, covering the period from September 2015 to August 2016, would be due in September 2016.

You can have your say on the issues raised by the consultation until 11 February 2016, by email to consultation@gamblingcommission.gov.uk. In the meantime, the GC has announced that it has signed up, together with the regulators in Alderney, the Isle of Man and Denmark, to a pilot looking into instigating a multi-jurisdictional testing framework (“MJTF”). The MJTF would mean that operators licensed across multiple jurisdictions could use one set of testing for all. Although the pilot is currently limited to these 4 jurisdictions and for now is confined to fairness testing for RNGs used in remote gambling, the GC hopes that its scope will be widened in further phases to include game fairness testing, field product certification and information security.