Gambling Commission announces changes to Licence Conditions and Codes of Practice

Following a consultation in February 2023, the Gambling Commission (the “Commission”) has confirmed that it will proceed with three key changes to its Licence Conditions and Codes of Practice (the “LCCP”). Two of the requirements will come into force on 1 April 2024, and the other will come into force on 31 January 2024. 

Background

Earlier this year, the Commission consulted on three proposed amendments to the LCCP. The proposals were to:

• change Social Responsibility Code Provision 3.5.5 (“SRPC 3.5.5”) to extend the requirement to participate in the GAMSTOP multi-operator self-exclusion scheme to all gambling licensees that make and accept bets by telephone and email;
• add a requirement to Licence Condition 15.2.2 (“LC 15.2.2”) to require all gambling licensees to inform the Commission when they become aware, or have reasonable cause to suspect, that a person who has gambled with them has died by suicide; and
• amend the text of Licence Condition 5.1.2 (“LC 5.1.2”) to ensure that the condition reflects the current legislative provisions, plus a further amendment to ensure that the condition also reflects any future legislative amendments.

Having considered the 77 written responses received to the consultation, the Commission has decided that it will proceed with all three of the proposed amendments. Although these changes may seem light touch when held against the backdrop of the Gambling Act review, the newly refined wording should help to bring clarity to operators in the three effected areas. We have outlined below what these changes are, when they are due to come into force and the potential impact they may have on license holders operating in the UK market.

1. Extending the multi-operator self-exclusion scheme to additional categories of betting licence

SRPC 3.5.5 currently provides that “Licensees must participate in the national multi-operator self-exclusion scheme” and confirms that it does not apply to: “any remote lottery licence the holder of which does not provide facilities for participation in instant win lotteries, ancillary remote betting, remote general betting (remote platform), remote betting intermediary (trading room only), remote general betting (limited), gaming machine technical, gambling software, host, ancillary remote bingo, and ancillary remote casino licences”.

The amendment to SRPC 3.5.5 will mean that operators who make and accept bets by telephone and email (which includes telephone voice calls, email, SMS text and instant messaging services such as WhatsApp, Telegram, Facebook Messenger and Instagram Direct) will also be required to offer customers a route to self-excluding from gambling via the GAMPSTOP scheme. Specifically, this will cover remote general betting (limited) operating licences and ancillary remote betting licences, when they are relied upon to provide facilities for betting by telephone or email.

In deciding whether to proceed with the changes to SRPC 3.5.5, the Commission has explained that it primarily focussed on “assessing the risk of harm (in particular for consumers who are vulnerable), as well as the benefits to consumers of clarity and uniformity of approach to self-exclusion across all forms of remote gambling”,  weighed against the additional cost that would be faced by gambling businesses from registering with the GAMSTOP scheme.

Whilst the majority of the respondents to the consultation agreed with the proposed changes and suggested that the reach of GAMPSTOP should be extended to capture all telephone and email betting, there were concerns that (i) the costs associated with integrating GAMPSTOP would be disproportionate and unaffordable and (ii) the changes might push some vulnerable customers towards the unlicenced gambling market.

Ultimately, the conclusion reached by the Commission was that it should proceed with the changes as they are “on balance” needed to protect vulnerable customers and meet licencing objectives. The Commission also stated that proceeding with the amendments has the benefits of:

• consistency with the current approach applied to online gambling services;
• simplicity for consumers, gambling businesses, the Commission and GAMSTOP – for example, a single solution is easier to understand, administer and monitor compliance; and
• providing the most comprehensive protection for vulnerable consumers.

The final wording of the amended SRPC 3.5.5. will be:

“3.5.5 - Remote multi-operator SR code

Applies to:

All remote licences except: any remote lottery licence the holder of which does not provide facilities for participation in instant win lotteries, ancillary remote betting when relied upon to provide facilities for betting via a machine (commonly known as self-service betting terminals) on premises where a betting or track premises licence has effect, remote general betting (remote platform), remote betting intermediary (trading room only), gaming machine technical, gambling software, host, ancillary remote bingo, and ancillary remote casino licences.

1. Licensees must participate in the national multi-operator self-exclusion scheme”.

This updated requirement will come into force on 1 April 2024, which the Commission considers to be sufficient time for the impacted gambling businesses to source new software and/or integrate with the GAMSTOP application programming interface.

The most significant impact will likely be the cost of adopting the GAMPSTOP scheme; this will include not only the registration and annual fee payable to GAMSTOP, but also costs incurred in sourcing and integrating any new software required. In response to the consultation in this regard, the Commission acknowledged: “[o]ur analysis indicates that, based on the 2021 data, the associated costs would absorb all or significant proportions of the Gross Gambling Yield (GGY) for the 23 gambling businesses that generate less than £10,000 from telephone or email betting services. We therefore recognise that a small number of gambling businesses may decide to exit the telephone or email betting market but note that their primary non-remote betting offer through premises or at tracks would be unaffected”.

2. Reporting of deaths by suicide to the Commission

LC 15.2.2 currently requires that licensees notify the Commission of certain events. These events include (i) any material change in the arrangements for the protection of customer fund; (ii) any change in the identity of the ADR entity or entities for the handling of customer disputes; (iii) their becoming aware that a group company which is not a Commission licensee is advertising remote gambling facilities to those residing in a jurisdiction in or to which it has not previously advertised, or their becoming aware of a sustained or meaningful generation of 3% or 10% of group Gross Gambling Yield being exceeded by the group in that jurisdiction; and (iv) any actual or potential breaches by the licensee of the requirements imposed by or under Parts 7 or 8 of the Proceeds of Crime Act 2002, or Part III of the Terrorism Act 2000.

The amendment to LC 15.2.2 will impose an additional obligation on gambling business to notify the Commission if they become aware that a person who has gambled with them has died by suicide. The Commission has clarified that operators will be required to report on suicides that they themselves are aware of, but also where the operator “has reasonable cause to suspect” that a customer who has gambled with them has died by suicide. The notification will need to include the individual’s name, date of birth and a summary of their gambling activity.

The Commission has confirmed that the requirement will not be retrospective but it has nevertheless encouraged operators to report historic cases if aware of them. It also confirmed that it was not appropriate to apply a time limit to the reporting of this information.

Although this requirement is now being formalised, the Commission has emphasised its expectation has always been that it be notified when gambling businesses become aware that a person who has gambled with them has died by suicide, and that this expectation is derived from Section 4 of the Commission’s Statement of principles for licensing and regulation and Ordinary Code 1.1.1 - Cooperation with the Commission. These requirements provide that operators should disclose to the Commission anything that it would reasonably expect to know or need to be aware of in exercising its regulatory functions and work with the Commission in an open and transparent manner. It notes though that it is “aware that notifications have not been made consistently due to [its] own casework and engagement”.

Once in force, the expanded LC 15.2.2 will mean that the Commission will have power to commence regulatory action against operators which fail to report customer suicides that they were aware of or had reasonable cause to suspect. This may cause some concern, especially given the somewhat subjective test that may be applied by the Commission to determine whether a breach has occurred, given that it will need to decide whether an operator had “reasonable cause” to suspect that a person who has gambled with it has died by suicide. Some respondents to the consultation noted that the requirement was too broad and too open to interpretation. That said, the test is similar to the threshold for reporting suspicious activity in the context money laundering and so operators will be familiar with the point at which they should consider reporting and in light of the potential repercussions, would be advised to adopt a cautious approach to reporting.

Whilst the UK General Data Protection Regulation and the Data Protection Act 2018 do not apply to deceased individuals, the Commission has confirmed that it will not ordinarily publish any information about specific individuals and that it will ensure that data is handled sensitively. The Commission has confirmed that in exceptional circumstances, it might put some of the information into the public domain, and if it does so, it will seek to suitably anonymise and or aggregate information.

The Commission has confirmed that the reporting statistics will not be used to measure suicides associated with gambling or act as a proxy for this figure, because it recognises that the figures may not be complete (due to gambling businesses being unaware of such suicides). This response was given, in part, to alleviate concerns raised by respondents to the consultation around the reliability of this data for measuring suicide deaths caused by gambling and the risk that the data could create an “unfair causal link between gambling and suicide”. 

It is ultimately unclear how exactly the Commission will use the data on customer suicides. The consultation response simply reiterates that the Commission intends to use the information to inform its compliance and enforcement work and policy development. In this regard, we note that the Commission has confirmed that after reporting a suicide, it will assess whether or not there is a “potential risk of regulatory failings which could further impact customers” and whether there should be further investigation into the operator’s compliance with its regulatory requirements.

The final wording of the amended 15.2.2 will be:

“15.2.2 - Other reportable events

Applies to:

All operating licences.

2. The licensee must notify the Commission, as soon as reasonably practicable, if it knows or has reasonable cause to suspect that a person who has gambled with it has died by suicide, whether or not such suicide is known or suspected to be associated with gambling. Such notification must include the person's name and date of birth, and a summary of their gambling activity, if that information is available to the licensee”.

This updated requirement will come into force on 1 April 2024.

3. Payment services – updating references to regulations

Perhaps the least contentious of the proposed changes, the Commission plans to make small amendments to LC 5.1.2 which currently sets out that payment from a customer should only be accepted when made by a method defined in Schedule 1 Part 1 of the Payment Services Regulations 2009. The changes update the requirement in LC 5.1.2 to refer to Regulation 2 of the Payment Services Regulations 2017 instead. The updates also ensure  that the condition is “suitably future proofed” by making it clear that the reference to the Payment Services Regulations should be read as any equivalent UK Statutory Instrument which amends or supersedes them.

No major concerns were raised by respondents to this part of the consultation. The were a small minority of responses which called for caution when implementing future facing obligations into the LCCP, although the Commission did not see this as a strong enough reason to not proceed with the changes.

The final wording of the amended LC 5.1.2 will be:

“5.1.2 - Payment methods and services

Applies to:

All remote casino, bingo and betting operating licences, except ancillary, host and remote betting intermediary (trading room only) licences.

1. Licensees must only accept payment from customers using their gambling facilities in Great Britain by a method which involves the provision of payment services as defined in Schedule 1 Part 1 of the Payment Services Regulations 2017 (SI 2017 No 752) if the provider of those services is a ‘payment service provider’ within the definition of that term in regulation 2 of those Regulations (or the equivalent requirements of any UK Statutory Instrument by which those regulations are amended or superseded)”.

This updated requirement will come into force on 31 January 2024.

For further information please email the authors or your usual CMS contact.

This article was prepared with the assistance of Henry Davine, Trainee, CMS London.