Posted by Woods Whur | Licensing Law

The Gambling Commission (“GC”) has just released its “Raising Standards for Consumers” Enforcement Report 2017 – 2018, which includes a clear message from the new Chief Executive, Neil McArthur, as well as a number of exposes of anti-money laundering (“AML”) cases which have been brought by the GC.

I made it clear at our conference at the Hippodrome on 8 May 2018 that poor practice would not be tolerated and that the industry as a whole needed fully to ensure that its AML policies and procedures were fit for purpose.  There have been a number of review cases brought by GC between 2016 and 2018 and there is no doubt at all that there will be further cases brought by the GC, if the industry does not keep pace with AML requirements.

A failure to comply with the AML Regulations could in all likelihood lead to a licence review, significant penalties and potentially revocation of the operating licence.

The GC document includes sections on AML, customer interaction, self-exclusion, unfair terms and practices, marketing and advertising, together with its final section on illegal gambling.

Neil McArthur introduces the document and confirms that the aim of any enforcement work is to “raise standards” in the industry.  The fact that standards need to be raised should set a clear message for all to understand.  The GC is still finding many examples of leading operators who do not have the requisite AML policies and procedures in place and, even when the requisite policies and procedures are in place, they are often not implemented by staff.  In my experience, this is one of the key issues that the industry is now having to deal with.  It may be that an operating company has very good policies and procedures and it may be that technically those procedures have been written to comply with the AML Regulations.  However, if staff dealing with customers do not fully understand these policies and procedures and do not implement them, then the policies and procedures are not worth the paper they are written on.

Neil McArthur continues by confirming that the GC will seek to raise standards through targeted action (that drives a culture where operators act in a way that:

  • minimises the risk to the licensing objectives and reduces gambling-related harm;
  • puts the interests of consumers first by treating them fairly and communicating with them in a clear way that allows them to make properly informed decisions; and
  • is open and co-operative with the GC as the regulator.

The industry is urged to look at this document, to learn lessons from the examples set out in it and to collaborate to achieve best practice.

This is the first time that the GC has published a review of its enforcement work over the past year and the document focuses on enforcement work under the Gambling Act 2005 and does not cover the Gambling Commission Regulation of the National Lottery.

The message is very clear.  Licensees are on notice that a failure to adhere to the guidance in both this document and within the GC’s public decision notices may see the regulator bringing enforcement action more swiftly and with higher penalties, if the GC is of the view that lessons are not being learned or if the issue in question has been uncovered by the GC or another authority.

Similarly, operators can expect lesser penalties if they report the matter to the GC promptly, co-operate during the investigation and proactively look to rectify matters.

I would urge the industry to read this document and pay careful attention to it.