UK: CMA Findings Following Investigation Into The Gambling Sector And Gambling Commission's Latest LCCP Consultation

Last Updated: 14 February 2018
Article by Chloe Hamilton, Nick Nocton and Niki Stephens
Most Read Contributor in UK, July 2018

Yesterday, the Competition and Markets Authority (CMA) published the results of its investigation into marketing practices in the gambling sector. In conjunction with its findings, it has published a 60-second summary for online gambling operators about using fair terms and practices. The undertakings entered into by Ladbrokes, William Hill and PT Entertainment also make for interesting reading (and are, in fact, the source of great detail).

The Gambling Commission has also recently published a consultation paper titled, 'Proposed changes to licence conditions and codes of practice linked to the fair and open licensing objective'

We recommend that operators licensed by the Gambling Commission arrange for each of their PML holders to review this information carefully. In particular, we suggest that PML holders responsible for marketing, and any other businesses involved in marketing for the gambling sector, discuss the information internally to determine whether any changes or improvements can be made to policies and procedures. If there is anything you would like to discuss with us, please feel free to get in touch.

Consultation summary - by way of a summary in relation to the Gambling Commission's consultation paper, the GC is proposing changes to three main areas of the LCCP:

  1. Marketing and advertising:

    • Elevating compliance with the UK Advertising Codes from an ordinary code provision to a social responsibility code provision, meaning that marketing communications must be socially responsible and that operators must comply with the Codes. In future, any breach of the Codes could be subject to the full range of the GC's regulatory powers, including financial penalties;
    • Adding a requirement for promotional marketing material to include any conditions that are likely to affect a consumer's understanding of the promotion, and therefore might impact their decision of whether or not to participate;
    • Introducing a new social responsibility code requiring operators to obtain specific, informed and withdrawable consent from customers before sending any marketing e-communications (including email and text messages); and
    • Clarifying that operators are responsible for the actions and behaviours of third parties (including affiliates). 
  2. Unfair Terms:

    • Changes to clarify that licensees must adhere to relevant consumer protection legislation at all stages of dealing with consumers;
    • Requiring licensees to ensure that their terms, including any consumer notices, are not unfair within the meaning of the Consumer Rights Act 2015 (CRA). Consumer notices include any notices, announcements or communications that relate to the rights or obligations between the licensee and a consumer;
    • Requiring licensees to comply with the CRA (as opposed to satisfying themselves that their terms are not unfair under the CRA, as is the current position); and
    • Making it easier for the Gambling Commission to take action (and apply a broader range of sanctions) if it thinks a licensee is not following the relevant rules in relation to unfair terms.
  3. Complaints and disputes:

    • Requiring complaints policies and processes to be clear, fair, open, transparent and accessible. Appendix 1 of the consultation includes proposed advice setting out the minimum standards expected from licence holders regarding effective handling of customer complaints, providing advice regarding implementation and summarising the related reporting requirements; and
    • Requiring licensees to complete their internal complaints procedure in full (either by resolution or agreement that a deadlock has been reached) within eight weeks of receiving the complaint.

Although the consultation is at an early stage, it would be sensible to review the paper in some detail in order to understand the proposed changes, which the Gambling Commission expects to implement following the consultation process. The Gambling Commission has reiterated that it "raises standards by setting minimum standards" (our emphasis added) and so it is worthwhile reviewing your policies and procedures in light of these proposed changes now, so that you are in a stronger position if and when the changes are formally introduced.

The GC is inviting responses to the consultation by 5pm on Sunday 22 April 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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