Gambling Commission announces updates to guidance on fair terms and practices

United KingdomScotland

On the 16 February 2022, the Gambling Commission announced updates to its guidance to licensees on fair and transparent terms and practices. The updates come in the wake of the Commission having discovered recent instances of licensees using potentially unfair terms. Such terms are not only unenforceable under the Consumer Rights Act 2015 (CRA), but also put licensees in breach of their obligations under licence condition 7.1 of the Licence Conditions and Codes of Practice (LCCP), which obliges licensees to ensure their terms and practices comply with consumer law. All licensees would, therefore, be wise to ensure they understand and implement the updated guidance properly.

In this article we summarise the Commission’s concerns and the key aspects of its guidance, and underlying law, relating to these.

Unfair terms and practices guidance

Much of the Commission’s guidance reflects the undertakings that the Competition and Markets Authority (CMA) entered into with various licensees, following its investigation into the remote gambling sector back in 2017. After the investigation, the Commission made it clear that it expected all licensees to comply with the CMA undertakings, not just those party to them.

The guidance also elaborates on the requirements of the CRA, which provides that unfair terms are unenforceable against a consumer and requires consumer terms to be transparent.

Areas of non-compliance

In its public statement in respect of the updated guidance, the Commission flagged that it had found various instances of non-compliance, each of which is detailed below, which it deemed to fail to meet the licence requirements:

  • “Terms that allow licensees to confiscate customers’ un-staked deposits”
  • “Terms regarding treatment of customers’ funds where a licensee believes there has been illegal, irregular or fraudulent play”
  • “Promotions for online games that have terms entitling a licensee to void real money winnings if a customer inadvertently breaks staking rules”
  • “Terms that unfairly permit licensees to reduce potential winnings on open bets”
  • “Terms and conditions that are difficult to understand”
  • “Welcome bonus offers and wagering requirements which may encourage excessive play”
  1. neither the receipt nor the value / amount of the benefit is dependent on the customer gambling for a pre-determined length of time or with a pre-determined frequency (or altered / increased if the qualifying activity / spend is reached within a shorter time than the whole period over which the benefit is offered); and
  2. if the value of the benefit increases with the amount the customer spends it does so at a rate no greater than that at which the amount spent increases.

Whilst the Commission does not elaborate on this point in its public statement, it appears that offers encouraging “excessive play” would be those in breach of such requirements.

Co-authored by Jake Sargent Trainee Solicitor at CMS.