Posted on

Gambling Consultations following the White Paper

As promised in the long-awaited White Paper; the consultations have begun. These have marked the start of the process of implementing some much needed changes across the Gambling sector, and they show no signs of slowing down.

 

Current Gambling Commission Consultations

At the moment there is only one Gambling Commission consultations still open, relating to proposed changes to financial penalties and financial key event reporting. These are relatively straightforward; potential changes to criteria and methodology for the calculation of financial penalties and proposals to help larger companies handle share fluctuations by allowing some licensees to report ownerships over a more appropriate level (for example 5% ownership rather than 3%).

On the face of it; sensible suggestions. In reality; an 86 page consultation document.

The proposed methodology for the financial penalties looks remarkably like sentencing guidelines, and overall would give the GC more power to determine the level of fine it deems appropriate – plus a potential disgorgement element allowing them to raise the fine even further.

During the two-year period between August 2021 to July 2023 £38 million was paid by way of financial penalties, and £44 million was paid  as part of regulatory settlement processes. It doesn’t look like we can expect these figures to decrease over the coming years.

This consultation closes on 15 March – 2023 Consultation on proposed changes related to financial penalties and financial key event reporting – The Gambling Commission – Citizen Space

 

Recently Concluded GC Consultations

A separate consultation closed on 21 February and included proposals to limit incentives, more customer tools to limit gambling, making operators ‘remind’ customers that their funds are not protected and a request that all regulatory returns are submitted quarterly. And removing the soon to be obsolete Research, Education and Treatment contributions.

A similar consultation closed in 2023, relating to yet more changes to the LCCP and RTS. This one contained proposals for suicide notifications, opt-in marketing preferences, remote game design, strengthening age verification procedures, changes to regulatory panels and extending PML requirements.

All in all, a lot of proposals. Some very straightforward, arguably superfluous. Some with some interesting quirks….

Lotteries in particular have been watching these consultations with growing frustration. From the requirement to report suicides leading to potential double counting (with ELMs and society lotteries sharing customers), the statutory levy being 0.1% when they donate 20% to charity (and again… double counting of ELMs and society lotteries) and finally the opt-in marketing proposals which are likely to severely limit how lotteries have always marketed their fundraising efforts.

 

Personal Management Licence Holders

The proposed extensions to PML holders is particularly interesting, demonstrating the GC’s ever increasing need to keep control of the industry. More PML holders means more personal accountability. Some of the new roles which will require PMLs include the CEO (as overall controller), the Chairman of the Board, the MLRO, the Nominated Officer and potentially even directors of a parent company. It looks likely that most companies will no longer have a single PML holder in each key management role.

PMLs have an application fee (£370), maintenance required every 5 years and come with personal accountability including criminal consequences. They are also in-depth applications, with financial, personal and criminal information being declared about an individual.

 

Regulatory Panels – more or less independent?

The proposed changes to the regulatory panels have caused some controversy. The changes propose that the panel be comprised of a legally qualified Adjudicator (as chair), one Commissioner and one member of senior Commission staff, rather than two or three Commissioners with the Chair of the Commission presiding over all panels. The second proposal is that decisions by the Panel be paper-based as the default.

There has always been some confusion about the role of regulatory panels, with many questioning how they can be independent, or the appropriate place for an ‘appeal’, when they are effectively still part of the Gambling Commission. The Commission have always tried to make it clear that their regulatory panels are not an appeal process, that appeals go to the First Tier Tribunal, and that their regulatory panels are simply an internal escalation process.

Unfortunately these proposal seem to have made matters worse. The adjudicator role has yet to be defined in terms of sector experience, questions are being asked as to the impartiality (or influence being exerted on) members of the commission sitting on the panel, and the true nature of these panels has not been definitively defined.

 

The DCMS and their Consultations

The DCMS haven’t missed out on the action either, with several major consultations released since the white paper.

The first proposed a stake limit of between £2 and £15 per spin and slot-specific measures to give greater protections for 18 to 24-year-olds. The second related to a series of interesting measures to be introduced for the land based sector. Between a relaxation of casino rules and a potential change to the 80/20 rule for gaming machines, this could be a game changer for the land based operators.

These consultations closed back in October and we’re all waiting with baited breath to see what the responses will be… Some sources are suggesting the response on the proposed stake limit might even be released this week.

The final consultation, applying to all operators, concerns the statutory levy. This looks to be implemented towards the end of this year and generally requires between 0.1-1% from all operators. Funds will go towards research, prevention and treatment – not dissimilar to the previous system which oddly enough is the subject of a separate GC consultation proposing its revocation.

 

Overall these consultations tell us a lot about the general direction the Commission is moving in, with a lot of focus on the protection of customers from gambling harms and a tightening on all general regulatory powers. Until we start to see more responses coming in we won’t know just how much of these will be implemented, but we can expect there to be an awful lot of changes to come for both the land based and online sectors in the coming months.

It is advisable for all operators to start to review their internal procedures over the coming months to ensure they are ready to handle these changes, particularly any social responsibility and customer interaction procedures and internal management structures.

For further information on any of the ongoing or closed consultations contact amanda@woodswhur.co.uk or your usual Woods Whur contact.