UK: Gambling Commission's First Enforcement Report: A Move Towards More Tangible Guidance For Operators?

Last Updated: 16 August 2018
Article by Nick Nocton and Nicholas McVeigh

The UK Gambling Commission takes a risk-based approach to regulation, focusing its resources on the issues that potentially present the greatest risk to the Commission's licensing objectives. The Commission's objectives-based style of regulation has meant that, to date, it has avoided giving detailed guidance to operators on their obligations. The rationale for this is that overly prescriptive rules would deprive the Commission of the flexibility it needs to regulate effectively. The Commission has however faced some criticism that this lack of detailed guidance has made it more challenging for licensees to interpret the Commission's requirements. 

Against this backdrop, the publication of the new 'Raising Standards for consumers: enforcement report 2017-2018' signals a move towards more tangible guidance being made available for operators on how the Commission expects its licensees to comply with the licensing objectives. Each of the report's chapters focuses on a key enforcement theme in which the Commission has been most actively involved in the last year, including anti-money laundering, customer interaction and self-exclusion.

From a practical perspective, one of the most useful features of report is the list of good practice "healthchecks" for each topic provided at the end of each chapter. These take the form of a series of questions that licensees should be asking themselves in relation to each topic. With respect to anti-money laundering, for example, has the operator allocated sufficient resources to AML compliance? Have clear, up-to-date, and fit-for-purpose AML policies and procedures been made available to all who require guidance?

Lessons to be learned

The customer interaction chapter of the report notes that the Commission has taken regulatory action against a number of licensees which have failed to meet the requirements to identify customers who are or may be at risk of problem gambling. Among the "healthcheck" questions a licensee should be asking itself are whether the licensee is curious about its customers and whether it tracks customers across its different platforms and does enough to spot multiple customer accounts. The self-exclusion chapter's list of healthchecks asks whether the licensee has sufficiently robust systems for self-exclusion and whether the licensee performs "holistic reviews" of its customer base.

The report contains welcome practical guidance on how to avoid common regulatory compliance pitfalls. As the Commission's chief executive, Neil McArthur, says in the report's introduction, "effective regulation requires a balance between deterrence and advice and guidance." He also says that the Commission hopes that operators will learn the lessons outlined in the report and that staff, management and boards will use it as a guide to help decision making and investment priorities.

Our advice to operators is to examine the contents of the report carefully. In particular, they should make sure that they have considered each of the "healthcheck" items for each topic that is relevant to their licensed activities.  This is particularly important because the report warns that failure to adhere to the guidance in the report and in the Commission's public decision notices may result in enforcement action being brought "more swiftly and with greater penalty", if the Commission takes the view that lessons are not being learned.

This article was originally published by EGR Magazine.

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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