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Gambling Commission business plan 2020-2021: regulatory change remains on the agenda

Posted on 9 April 2020

The Gambling Commission's business plan for the year ahead, published on 1 April 2020, acknowledges that the gambling industry begins a new year in "extraordinary circumstances". However, as we forecasted in our recently published "Regulatory Roadmap", further regulatory changes remain firmly on the agenda despite the challenges of COVID-19.

The business plan is essential reading for all senior management and personal management licence holders. It sheds light on which areas of regulation will be the main areas of focus during 2020-2021. It also gives some indication of when the relevant regulatory changes may be implemented. However, the Commission acknowledges that the timelines may need to change to take account of current conditions, and a revised plan may be published at the end of Q1 if appropriate.

The foreword

The Commission states in the foreword that it is already working to take account of the findings of the recent National Audit Office Report into gambling regulation. The NAO report concludes that, within the current regulatory framework, the Commission is unlikely to be fully effective in addressing risks and harms. It references "inflexible funding" (specifically the inability of the Commission to change licence fees) and a "lack of evidence on how developments in the industry affect consumers" as being to blame for this.

These conclusions signal impending changes to the licence fee regime (see 'Improving the way it regulates' below). Licensees should consider the latter concern carefully and ask themselves: is there anything we can do to help measure the impact of regulatory changes on customers and ensure that new and existing regulatory requirements are actually successful in solving the underlying problem?

For example, licensees might consider inviting customers to participate in evaluating the customer journey and seek their feedback, and/or asking active customers to provide responses to Commission consultations to ensure that the voices of those consumers who choose gambling as a recreational activity feature in the conversation.

Strategic priorities

The Commission will deliver its work through the same five strategic priorities: protecting the interests of consumers, preventing gambling harm to consumers and the public, raising standards in the gambling market, optimising returns to good causes from lotteries and improving the way it regulates.

In pushing the industry to create a safer market for consumers, the Commission will support the industry to implement and evaluate the following initiatives: markers of harm, customer interaction, responsible product design, single customer view and the use of advertising technology to minimise the exposure of children and vulnerable people to gambling-related advertising. Progress is already being made across a number of these through the working groups. 

Some of the key regulatory aspects of the five proprieties are:

Protecting the interests of consumers

The business plan confirms that regulatory changes will be made in response to outputs from the working groups established in January 2020. The working groups have been tasked with looking at: game design, safer advertising (the Advertising Technology Challenge) and the use of VIP incentives.

On 1 April 2020, the Commission already announced that it will launch consultations to ensure that the first wave of outputs from the working groups will be incorporated into the regulatory framework. The changes include: a prohibition on the recruitment of under 25s to VIP schemes, tightened controls for other VIP customers, a strengthening of the rules for online advertising to better protect vulnerable groups and a reduction in the intensity of play within games by the removal of certain game features. The working group tasked with responsible game design has also committed to delivering a more detailed work plan around in-game messaging and the creation of a Betting and Gaming Council Testing Lab to look at other game features and publication of a Responsible Game Design Code in 2020.

The Commission will support and advise on the Government's planned review of the Gambling Act. The review is intended to ensure the Gambling Act is "fit for the digital age" and we expect it to tackle areas such as online loot boxes.

Preventing gambling harm to consumers and the public

Unsurprisingly, at a time when many are staying at home for long periods, the Commission continues to focus on reducing gambling related harm. The Commission makes clear that it is willing, if necessary, to use its powers to suspend and revoke operating licences if operators cannot protect customers from harm.

The Commission will launch an Experts by Experience Board by Q2 to ensure the voice of consumers (particularly those who have experienced harm) fully informs decisions of the Commission. Later in the year, it will review its approach to measuring participation and prevalence and publish conclusions.

Raising standards in the gambling market

The Commission highlights improving standards in the remote gambling sector as a particular priority, with delivery being scheduled for throughout the year.

Implementation of the Fifth Money Laundering Regulations is intended to be delivered by Q4. Our January blog post discussed the updates made to the Commission's AML guidance for remote and non-remote casinos. We expect that compliance with the Fifth Money Laundering Regulations and the updated AML guidance is likely to become a point of focus during compliance assessments.

Optimising returns to good causes

The Commission will in Q2 publish an invitation to apply for the fourth National Lottery Licence and publish its conclusions following consultation on society lottery prize limits and transparency measures.

Improving the way it regulates

The Commission will in Q2 establish the case for changes to its fees and provide evidence to the Department for Digital, Culture, Media and Sport (DCMS).

Next steps

Keeping on top of upcoming changes in regulation and compliance while tackling the new challenges presented by the current crisis will be a juggling act for operators. We will be monitoring these developments closely; if you would like to discuss any areas highlighted by the business plan, please contact one of the team or your usual Mishcon contact.

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