On Monday, the Gambling Commission published its advice to the Government (see here) in connection with the latter’s review of gaming machines and social responsibility measures (about which we wrote here). This prompted a spate of media coverage about the vexed issue of FOBTs and, in particular, the amount to which the Government should reduce the maximum stake. In fact, much of the coverage misrepresented the Gambling Commission’s advice and did not do justice to what was a thoughtful and considered report.

However, the FOBT issue will (eventually) be resolved and what I find more interesting and what will potentially have a longer lasting impact are the views expressed by the Commission in Section 5 of its report regarding online gambling.

The Commission’s Corporate Business Plan included a commitment to:

Examine data, market trends (both current and future), consumer participation and action by operators on social responsibility and crime in the remote market.”

Having completed that review, the report sets out the Commission’s provisional conclusions on which it is intending to consult. Their review of the online sector has resulted in four areas where the Commission considers it necessary to enhance the regulatory framework for online gambling and five other areas where the Commission will carry out further work.


1. Age verification

Whereas operators currently have 72 hours to complete age verification, the Commission’s view is that, given the greater availability of effective age verification tools, verification should be completed on all consumers before they can deposit and gamble.

In addition, the Commission’s view is that play-for-free games should only be available after age verification has been completed.

2. Customer identification

In a number of recent cases, the Commission has found that operators have conducted insufficient customer due diligence, which means that they have not been able to identify problem gamblers or criminals who have gambled significant sums in excess of the amounts that their profile would have suggested they could afford. A related issue, from a consumer law perspective, is the practice of some operators to only require additional due diligence when a customer has requested a withdrawal. (This is something that the Competition and Markets Authority’s (CMA) ongoing investigation into the remote sector is currently focusing on also.)

The Commission therefore intends to introduce a customer due diligence requirement such that operators will have more information about their customers at an earlier stage and which would require players to be verified before they are allowed to gamble. In addition, the Commission considers that operators should be required to set limits on players’ spending, which could only be increased once they had further due diligence information which would support such higher spending limits.

3. Unclear and/or unfair terms and conditions

As part of the CMA investigation, undertakings have been accepted by various operators (see our note here) and the Commission has made it clear that they expect all operators to review their terms and conditions and practices to make sure they are consistent with these undertakings. The Commission says that it will be conducting compliance activity to ensure that the same standards are indeed applied across the industry and also that it intends to publish guidance for operators on unfair terms and provide more information to consumers about the treatment they should expect to receive from operators. In addition, the Commission is already consulting on amendments to the LCCP (see here) linked to advertising and marketing, unfair terms and complaints and disputes.

4. Ineffective customer interaction

The Commission makes the point that there are no restrictions in online gambling on stakes and prizes or speed of play and that this allows much greater commercial freedom to online as compared with land-based operators. The Commission goes on to point out, however, that online operators have the ability to collect significant amounts of data on their consumers and that the Commission would expect online operators to use this data to identify and minimise gambling-related harm. The Commission also acknowledges:

Overall, progress by the online industry to minimise harm has been significantly slower than we expected and required. One of the main focuses of our ongoing work has been to get the industry to improve its ability to identify and engage those consumers exhibiting signs of problematic behaviour.”

The Commission has recently published guidance (see here) to operators in order to raise standards in customer interaction and states that it intends to consult on amending the LCCP customer interaction requirement.

5. Areas of further work

The five areas of further work identified by the Commission are as follows:

(i) Assessing the effectiveness of current consumer protections

The Commission intends to review the effectiveness of current gambling management tools and will then decide whether there is a need to strengthen and expand the range of tools operators are required to provide to offer better options for consumers to maintain control of their gambling.

(ii) Review game and product characteristics to identify whether particular features pose greater risk of harm than others

The Commission intends to conduct further research into the relationship between in-game features and the potential to encourage negative gambling behaviour.

(iii) Review requirements on the protection of customer funds and consider whether there are sufficient protections around dormant accounts

The Commission’s corporate strategy seeks to establish a market in which consumers are able to differentiate between operators on factors other than price alone. The Commission states that the requirement for operators to identify their level of protection of customer funds does not seem to be a significant factor in consumers’ choice and it will therefore conduct some more research into consumer behaviour.

In addition, once the CMA has reached a conclusion on its investigation into dormant account fees, the Commission will review whether any changes are required in relation to its relevant LCCP requirements.

(iv) Gambling on credit

The Commission will conduct further work on gambling using credit and will then decide whether any changes are necessary.

(v) Consider whether changes need to be made to the LCCP to ensure that consumers can withdraw funds more easily.

This is another area which the CMA has looked into and raised concerns about some of the practices associated with restricting customers from withdrawing funds. The Commission will look further into this and include in its consideration the issue of “reverse withdrawals” whereby a player can cancel his request to withdraw funds.

Finally, the Commission makes clear that the above actions are not the limit of their work and ends with what could be perceived as a warning when they say:

We currently have a significant amount of work in progress intended to raise standards across the online gambling industry. We will be raising awareness amongst operators of common failings in their compliance. We will take robust regulatory action where we identify significant non-compliance.”