The UK Gambling Commission has published its second annual enforcement report: "Raising standards for consumers: enforcement report 2018/19".
While the Commission acknowledges the progress that has been made in some areas during 2018-19, it stresses that more needs to be done, highlighting that in total it carried out more than 160 regulatory and criminal investigations last year.
Following the approach of the Commission's first enforcement report, published last year, each of this year's chapters focuses on a key enforcement theme. We encourage operators to read the report's contents carefully and in particular make sure that each of the "healthcheck" items at the end of each chapter has been considered.
While this year's report covers similar ground to last year's, there are some important differences in content and emphasis. We have highlighted below some examples of the key areas in which the lists of operator healthchecks have been expanded and refined.
The "safer gambling" chapter of the report has been rebranded from "customer interaction" in last year's version. Most of the existing healthcheck items have remained the same, including for example policies and procedures to identify customers who may be at risk of developing gambling problems, being curious about customers and monitoring customer activity. This year's report includes a new healthcheck item: "Have you considered how you will meet the revised LCCP requirements for customer interaction? Have you reviewed your own processes against the guidance, and considered changes you need to make to meet the requirements from October 2019?"
A longer list of AML healthchecks has been included in this year's report. In particular, operators are asked whether their money laundering and terrorist financing risk assessment is appropriate to their businesses and whether they have taken into account the Commission's Money Laundering and Terrorist Financing Risk Assessment, and the high-risk factors detailed in the Commission's guidance. Operators are also asked whether their customer risk profiles are informed by their money laundering and terrorist financing risk assessment, or whether operators are placing an over-reliance on monetary thresholds as risk triggers and ignoring other risk factors.
Marketing and advertising
The Commission notes that while enforcement on this topic has resulted in standards improving, operators still need to do more to ensure their marketing communications are transparent and socially responsible. A new healthcheck item has been included: "Do you keep up to date with CAP and BCAP guidance, published on the ASA website, on the standards that you have to meet to ensure [your marketing and advertising materials] comply with the rules?"
A new chapter on compliance has been included this year. The healthcheck items in this area have been grouped into three categories: staff, customers and third parties. In relation to staff, for example, operators are asked whether key personnel have sufficient knowledge, understanding and oversight of the regulatory framework and compliance requirements. Have operators considered linking performance and elements of pay to compliance? In the customers category, items to check include whether targeted customer interactions and interventions are used. As for third parties, the questions operators are asked are: "How are you managing and auditing your relationship with 3rd party affiliates? Could you satisfy us that you are in control of these relationships?"
Self-exclusion and unfair terms
Chapters on self-exclusion and unfair terms have not been included in this year's report, but importantly the report contains a note that last year's guidance on these topics remains applicable.
If you have any questions on the enforcement report or would like to discuss its contents, please do not hesitate to contact Nick Nocton or Niki Stephens.