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Gambling Commission strengthens consumer-related licensee requirements: new LCCP to apply from October 2018

Posted on 10 August 2018 by Nick Nocton and Nicholas McVeigh

Gambling Commission strengthens consumer-related licensee requirements: new LCCP to apply from October 2018

On 1 August 2018 the UK Gambling Commission published details of changes to the Licence Conditions and Codes of Practice (LCCP) designed to strengthen requirements in various key areas, to ensure that gambling is fair and open for consumers.

The changes to the LCCP follow an open consultation launched in January 2018 and relate to (a) marketing and advertising; (b) unfair terms; and (c) the handling of customer complaints and disputes. The more significant changes in each of these areas are highlighted below.

The key changes

Marketing and advertising

  • Compliance with the UK Advertising Codes has been elevated from an ordinary code provision to a new social responsibility code provision. This will mean that licensees who breach any aspect of the codes could be subject to the Gambling Commission's full range of regulatory powers, including financial penalties.
  • A new social responsibility code provision has been introduced to ensure that licensees do not send direct electronic marketing without the specific, informed and withdrawable consent of the recipient.
  • The existing social responsibility code provision on responsibility for third parties, including marketing affiliates, has been strengthened to make clear that licensees are responsible for the actions of third parties with whom they contract for the provision of any aspect of the licensee's business related to its licensed activities.

Unfair terms

  • The licence condition on fair and transparent terms and practices has been amended so that consumer notices relating to gambling activity, and not just the contractual terms on which gambling is offered, must be transparent within the meaning of the Consumer Rights Act 2015 (CRA).
  • The licence condition on fair and transparent terms and practices has also been amended to clarify that the Commission expects licensees to ensure that they comply with the CRA and not just satisfy themselves that they have done so.
  • Amendments have been made so that it is clear that licensees are required not just to ensure that marketing is not misleading within the meaning of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) but also to comply with the CPRs at all stages of their dealings with consumers to ensure they are treated fairly.

Customer complaints and disputes

  • The social responsibility code provision on complaints and disputes has been amended to make it clear that complaints policies and processes must be clear, fair, open, transparent and accessible.
  • An eight-week time limit has been introduced for licensees to complete their complaints procedure.
  • The use of deadlock letters to consumers has been introduced, for licensees to confirm that they have reached the end of their internal complaints process (or the eight-week limit) and the consumer may now escalate the complaint to an ADR provider.
  • The definitions of "complaints" and "disputes" have been removed, and a new guidance note on complaints guidance introduced, providing additional guidance to licensees on compliance with the social responsibility code provision and the Commission's wider expectations on complaints handling.

Expansion of the Gambling Commission's remit?

The increased enforcement powers that these changes to the LCCP will give the Gambling Commission have led some to wonder whether there is a risk of regulatory overlap or "double jeopardy". For example, making breach of the UK Advertising Codes subject to the Commission's regulatory powers arguably strays into the Advertising Standards Authority (ASA)'s territory. Similarly, the new rules on unfair terms interrelate closely with the jurisdiction of the Competition and Markets Authority (CMA). The Commission stresses throughout its consultation response, however, that it has continued to engage with the CMA, the ASA and the Information Commissioner's Office to ensure that they "each strike an appropriate balance between achieving common objectives, having due regard for our respective roles and responsibilities."

Timing and other initiatives

The above changes to the LCCP will take effect on 31 October 2018, and the Gambling Commission's consultation response hints that further guidance will be on its way in various areas covered by the consultation. The Commission also confirms that it intends to implement its proposed new framework of additional standards for ADR providers by the end of the financial year.

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