The UK Gambling White Paper explained

By Tom Collister  of Amber Gaming (Isle of Man)

The greatly anticipated publication of the UK Government’s white paper review of the Gambling Act 2005 (the “White Paper”) has been released, outlining how the Government envision the future of gambling regulation to look in order to bring it in line with today’s digital age of the internet and smartphones.

Below, we delve into the key proposals of the White Paper, many of which have been long expected and rumoured in the last two years since this review was first announced, some may come as more of surprise, but all of which have caught the attention of operators, and the industry as a whole.

Affordability

We know first-hand that operators have found past guidance on the hot topic of affordability as vague and inconsistent, which is mostly down to the lack of prescriptive rules. However, in an attempt to rectify this, the Government have proposed a number of ‘financial risk checks’, which include the following:

• Background checks, to check for financial vulnerability indicators such as County Court Judgements, for any player who has net losses of £125 within a month, or £500 within a year.
• Enhanced checks of a player’s financial position when they have experienced net losses of £1,000 within 24 hours, or £2,000 within 90 days.

Perhaps differing from past Gambling Commission expectations, these checks are intended to be frictionless for players and conducted online by credit reference agencies, or through open banking. Further information would only be requested from players as a last resort when completing an assessment.

In addition to the above, to better protect young adults, who according to evidence may be more susceptible to gambling related harm, 18–24 year-olds will have the threshold for which enhanced checks are carried out halved.

Stake Limits

The Government have proposed a stake limit for online slot machines of £2-£15 per spin. Further guidance on these limits is expected to be addressed within an industry wide consultation over the forthcoming months

As with the financial risk checks, it is likely that a lower threshold would apply to young adults, and a consultation will take place on measures that include options of a £2 or £4 stake limit, or an individual risk-based approach.

These statutory stake limits would see online slots brought closer in line with land-based machines in order to limit the risk of harmful play associated with this ‘high risk product’.

Free Bets and Bonuses

Incentivising a player to gamble is a vital ingredient for a successful operator but if done irresponsibly, can be damaging to a player, contributing to risks of harm. To prevent this from occurring, the Government have announced that a review will take place on how incentives and promotions can be offered in a socially responsible way. We have seen other jurisdictions look to introduce blanket bans on the use of free bets, and there has also been a lot of media noise around offering free bets to players, so the industry will be relieved to see these proposed controls, rather than the blanket ban many had been calling for.

The Commission will conduct a consultation in due course on new proposed controls which include; allowing players to opt in for online bonuses and offers, a review of the targeting of free bets and bonuses to ensure there are clear rules, and fair limits on wagering requirements and time limits, so they do not encourage excessive gambling.

Ombudsman

The White Paper highlights concerns about the current inability for players to seek personal redress from operators following social responsibility breaches. This year there have been approximately 2,000 complaints made to Alternative Dispute Resolution (ADR) providers on this basis; however, these are currently out of scope for ADR. Therefore, the Government are proposing that an ombudsman is established who will adjudicate these complaints when an operator has been unable to resolve them. This ombudsman would:

• Address complaints from players.
• Collate information which will allow the Gambling Commission to enact more targeted enforcement activity and help the industry to support vulnerable groups.
• Initially perform voluntarily, however, if the idea of an ombudsman is not well received in the industry, the Government will legislate to prove its necessity.
  
  

Mandatory Levy

Whilst recognising the significant contributions that the industry makes for research, education and treatment (RET) for gambling harms, the Government believes that more can be done and as such will be issuing a consultation on the topic, with a view of introducing a mandatory RET levy. This introduction of such a levy comes as no surprise, as there have been many discussions of this in the past; now all that’s left to determine is the value of these contributions and how that will be fairly determined based on proportionality and product offering; this will form the basis of a further industry consultation in due course.

Data Sharing on High-Risk Customers

The Gambling Commission has always encouraged operators to share knowledge and best practice across the industry, such as previous customer interaction guidance stating operators should, “Embed lessons learned and best practice across the business and collaborate to share across the industry”, however the practicality of how that is achieved has not always been so clear. It looks as though this could now be changing with a proposal to introduce a ‘cross-operator harm prevention system based on data sharing’.

The Government are aware that individual operators can take steps to prevent harm, but those individuals typically have accounts with multiple operators, so this would play a part in preventing these individuals experiencing further harm at other operators.

It will be interesting to see how this develops, as there are certainly multiple challenges from a data protection perspective, however this could be the start of a move towards an industry single customer view.

Our Outlook

Operators have been anticipating industry reform for a number of years, and with the issuance of the White Paper the Gambling Commission remains at the forefront of the sector and serves as a driving force to shaping the industry’s regulatory landscape.

It is evident through the proposed amendments and forthcoming consultations that reforms and new obligations will be fast approaching, with hopes that majority of key changes being adapted throughout 2024.

At Amber Gaming, we believe it is important to embrace the standards of compliance beyond compare and to do this it is critical to keep ahead of the game by keeping abreast of regulatory updates, considering industry changes and how these may impact upon your existing operations to date.

Keep an eye out on our blog over the forthcoming months for further updates and please get in touch should you wish to discuss any of the proposed changes or proposals in further detail.