The latest edition of our "UK regulatory roadmap" identifies key upcoming and ongoing regulatory developments impacting the betting and gaming sector.
UK regulatory roadmap
DHSC-sponsored study on gambling, following the Public Health England evidence review of gambling-related harms in 2021 (Q3)
A study, funded by Public Health England and published in The Lancet, has concluded in 40 recommendations for "universal and targeted" measures the researchers consider would be effective in reducing risk and preventing gambling harm.
The authors of the report consider the findings to offer a 'blueprint' for a public health approach to preventing gambling harms, and span 7 categories: treatment and support, information and education, environment and technology, marketing/promotions and sponsorship, accessibility, availability, and price and taxation. The researchers are of the view that the implementation of the measures in England "could substantially strengthen regulatory controls while providing new resources."
Some of the most notable recommendations include:
- Loot-boxes and related content in video games to be defined as "gambling" for the purposes of the Gambling Act 2005.
- Imposition of a ban on in-play and spread betting on sports events.
- Imposition of a ban on all price and discount promotions on gambling products and services
- Imposition of a universal ban on all gambling marketing, advertising, and promotions.
- Online operators to provide a single customer view.
- Real-time feedback of information to customers on time spent and money lost.
- Limits on hours per day that electronic gaming machines (EGMs) can operate in land-based premises, and on the number of EGMs in land-based premises.
The Gambling Act to include an explicit focus on preventing and reducing harm.
The BGC has referred to the recommendations as 'worrying'.
Regulus Partners published a highly critical article in the Racing Post in August, criticising the evidence base used to form the recommendations. In particular, Regulus pointed out that there are 'methodological flaws' with Public Health England's analysis of the public cost of gambling harms (which it had estimated last year as amounting to £1.27bn a year), and questioned the value of an approach that looks solely at the negative societal impact of gambling, rather than attempting to understand both costs and benefits.
The impact of this study on the Gambling Act Review and the impending White Paper remains to be seen.
House of Lords debates merits of loot box regulation (Q4)
On 13th October 2022, the House of Lords debated the UK's current approach to the regulation of loot boxes in video games following the Government's response to a DCMS consultation earlier this year.
In that response, the Government elected to not regulate loot boxes and instead to rely on industry self-regulation, citing the industry's "creativity, innovation and technical expertise to deliver tangible progress". A technical working group was convened by DCMS to pursue enhanced industry-led measures to reduce the risk of consumer harm. The Government proposes to provide an update on the progress made by the working group in Q1 2023. The Government has not ruled out the possibility of legislative action in the longer term.
The House of Lords debate highlighted several potential regulatory points of view, including that:
- an industry-led approach may give rise to conflicts of interest;
- the suggestion that the Government could ban purchases of loot-boxes by under-18s (having raised the age restriction on the National Lottery to 18 in 2021);
- traditional notions of value such as 'money's worth' may be insufficient to address underlying issues in relation to loot boxes and that value perceived by players should be included within a regulatory framework; and current definitions of gambling are unsatisfactory to address the alleged social harms of loot boxes.
In response, the Government reiterated the objectives set out in its response to the call for evidence in July, and that the review of the Gambling Act 2005 is expected in the coming weeks. Given the Government's response in July 2022, it seems unlikely that amendments will be made pursuant to the Gambling Act Review which would immediately capture loot boxes and similar mechanics.
New remote Customer Interaction requirements and guidance (Q4)
A slightly modified version of the new LCCP requirement for remote customer interaction (SR Code 3.4.3) came into effect on 12 September 2022. Shortly before SR Code 3.4.3 came into effect, the Commission withdrew the accompanying guidance, promising to consult on proposed new guidance, and confirmed that certain related paragraphs of the SR Code provision would also not take effect until after the consultation. The consultation was launched on 22 November and closes on 23 January 2023.
The following requirements were not brought into effect in September:
- The requirement to take timely action where indicators of vulnerability are identified and to take account of the Commission’s approach to vulnerability as set out in the Commission’s guidance (paragraph 3).
- The requirement to prevent marketing and the take-up of new bonus offers where there are strong indicators of harm (paragraph 10). The Commission has said that it intends for this to come into force on 12 February 2023.
The requirement to consider the Commission’s guidance on customer interaction for remote operators (paragraph 2, and the reference to the guidance in paragraph 1).
Twitch bans certain gambling sites (Q3)
Leading livestreaming platform Twitch has announced via Twitter it will ban streaming of certain specified gambling sites that (a) include slots, roulette or dice games, and (b) do not hold a licence in the US or in jurisdictions that provide "sufficient consumer protection". At present only four such gambling sites have been specified as prohibited, but the policy makes clear that others may be added. Twitch's decision raises a number of potential questions on licensing and advertising rules for livestreaming and video platforms.
Advice for Licensees on improving complaints handling (Q3)
The Gambling Commission has published tips on how to improve the handling of consumer complaints. This comes after the Commission reviewed 34 licensee complaints policies, looking at how accessible they were and how easy to use.
The Commission's good practice tips for licensees are:
- include a link to your complaints procedure on your homepage
- use plain English and avoid jargon or legalese
- have a short and clear process for complaints
- tell people what information you need to investigate their complaint
- include details of the 8-week time limit for resolving complaints or issuing a final response
- be clear when you have given a final decision or reached ‘deadlock’
- include clickable links and check that they work
- utilise technology, such as webforms and decision-trees, to help guide people through the complaints process but always have alternative methods of contact available
- be accessible for all, including vulnerable people, and make adjustments where required (in our view this relates to the means by which consumers can contact the operators and the operator contacts the consumer and the method by which the policy is deployed with a view to ensuring that vulnerable customers can use the policy without difficulty)
- keep a virtual paper-trail (i.e. keep records of all relevant correspondence including communications other than by email)
- utilise Resolver and other consumer support tools provide clear signposting to ADR providers.
Licensees should review their complaints policies and processes and make updates where necessary to improve their handling of complaints/implement these good practice tips (and keep track of any improvements using version control on all internal and external policies). The advice is supplemental to (and not intended to replace) the Commission's existing requirements around complaints handling under social responsibility code 6 of the Licence conditions and codes of practice or its complaints and disputes guidance, which includes both legal obligations (denoted by the word "must") and recommendations of good practice (denoted by the word "should").
Andrew Rhodes - speech at IAGR Conference 2022 - Gambling Commission (Q4)
Andrew Rhodes, the chief executive of the Commission, spoke on 18 October at the 2022 IAGR Conference in Melbourne. There was no update on when the Gambling White Paper might be published, but he talked about the development of the "Single Customer View" and a trial which was due to begin in the coming months. He also spoke about the "Path to Play" research and said it was an "essential step" for regulators to work more closely together across borders and jurisdictions.
Institute of Licensing Conference – Sarah Gardner key note speech - Gambling Commission and Ian Angus speech at Bacta Annual Convention 2022 - Gambling Commission (Q4)
In the Keynote Speech at the Institute of Licencing Conference on 17 November 2022, Sarah Gardner, Deputy Chief Executive Officer of the Gambling Commission, called on Local Authorities for their assistance in identifying non-compliance by operators of gaming machines. This call to action in light of non-compliance already identified by the Gambling Commission, signifies an increased risk of enforcement action against operators who are found to violate gaming machine rules.
Section 172 of the Gambling Act 2005 (the Act) states that adult gaming centres and bingo premises must restrict the number of "high stake - high prize" Category B gaming machines to 20% of the total gaming machines available to play. Ms Gardner drew particular attention to the use of "in-fill" machines that are placed between existing machines and can realistically only be played by one person but are counted by the operator as two or more machines. Ms Gardner also raised concerns that operators were selectively powering their machines due to increasing energy prices, and in doing so were at risk of violating the 80/20 rule.
The same concerns were also raised by Ian Angus, Director of Policy at the Gambling Commission, in his speech at the Bacta Annual Convention on 24 November 2022, where he confirmed that the Gambling Commission would not be amending its 'available for use' guidance and said "adherence [to the rules] … is essential. If we see compliance failings … we will act".
Ms Gardner called for feedback from Local Authorities following inspections to ensure that children are being prevented from playing Category C gaming machines in pubs.
We have written about this here.
These speeches indicate that gaming machine operators can expect to see increased scrutiny by licensing authorities during inspections, reporting of issues by licensing authorities to the operator and the Gambling Commission, and enforcement action in the event of any breaches. We therefore recommend that:
- AGCs and bingo premises review their operations to ensure that "in-fill" machines are being allocated correctly and energy saving plans and other cost saving measures are executed in line with the Act and applicable guidance; and
- Pubs review their age-verification policies and procedures (taking into account the Social Responsibility Charter for Gaming Machines in Pubs issued by the British Beer and Pub Association in September 2019) and ensure that sufficient staff training is in place to enable those policies to be implemented successfully.
Andrew Rhodes speech at the CEO Briefing 2022 - Gambling Commission (Q4)
Andrew Rhodes spoke at the CEO Briefing 2022 on 25 November 2022. In his speech, he spoke about his vision for how the Gambling Commission will be carrying out its role in the years to come. This included, rethinking licensing to account for complex ownership structures, spending more time looking at offers, terms and practices that can disadvantage consumers, relying more heavily on evidence, data and research, being more transparent, intervening earlier with operators where they see problems and moving to consultation windows. He also mentioned a one-day Conference they are organising on 9th March in 2023.
2022 Young People and Gambling Report - Gambling Commission
On 10 November 2022, the Gambling Commission published its Young People and Gambling Report, an annual study which helps to understand children’s and young people’s exposure to, and involvement in, all types of gambling. The report stated that:
- 31% of children have stated they had spent their own money on gambling in the last 12 months.
- The vast majority indicated their gambling was legal or did not feature age restricted products. Examples of this include playing arcade gaming machines.
Overall, the 2022 study shows that 0.9% of 11-16 year-olds are classed as problem gamblers in Great Britain.