In February, the Commission launched an 8 week consultation on the technical standards it intends to apply to remote gambling operations. It describes the consultation document as “of interest to those who wish to be licensed as remote gambling operators, remote gambling software suppliers or software providers”, and invites industry feedback on the technical issues faced by operators in this field. The consultation closes on 30 March.

This consultation follows the general consultation on licences and codes of practice and so deals primarily with three issues – the establishment of fair and open technical standards, standards required to establish “responsible gambling” and security issues.

Remote gambling

Section 4 of the Gambling Act 2005 (GA 2005) defines remote gambling as gambling conducted by means of any form of remote communication. Remote gambling will only fall within the Act’s jurisdiction where it is provided from Great Britain. Offshore operators, of course, remain outside the scope of the 2005 Act, the Gambling Commission’s regulatory powers and the technical standards considered in the course of this consultation exercise.

The Commission have made it clear that they consider it appropriate to create standards, rather than regulations, in respect of this area of industry practice. The Commission has therefore adopted the approach of prescribing the necessary end result to be achieved, rather than to detail the steps they require operators to take in order to reach that end.

Compliance

Compliance with technical standards will become an automatic condition for grant of any remote gambling operating licence and the Commission’s requirements will be incorporated by reference as licence conditions.

Fair and open technical standards

The “fair and open” standards deal with the transparency of the gambling. As proposed, customers must be given full information about their transactions, including the way in which any virtual event is conducted, the way a bet is taken, the odds of winning or losing in various circumstances and any changes made by the operator to the rules or the odds that apply to the gambling in question. Where it is not practical to provide this information (for example, where players are participating by telephone or using a restricted display screen), operators are to be obliged to provide information by post, fax or email.

The operator must also provide reliable information as to the likely effect of chance or skill in the promotion and also as to the participants’ chance of winning and the prizes on offer. The Commission also hopes to ensure that calculation of the return to player percentage is consistent between operators.

Customers' money

The Commission also wants to ensure that customers understand what they are spending. The consultation suggests that a customer’s account balance should be displayed on all pages that allow him to pay in, withdraw, or move money between products, or should be provided by the operator if telephone gambling is taking place. The balance must be given in an appropriate currency, rather than in tokens or credits and an aggregate balance must be provided where it is possible to move money between products.

The customer should also be able to review his most recent transactions. The Commission proposes that the appropriate cut-off point may be to detail the most recent 25 transactions or those occurring in the last 30 days. It is proposed that monthly statements should be provided by post, fax or email where this is impractical, unless the customer declines the service.

It is also proposed to prohibit “teasers” in as the Commission considers them to misrepresent the likelihood of winning. If an operator offers a free to play game, it must carry the same odds and rules as an equivalent paid-for game offered by the same operator. The same is proposed for games that imitate physical devices. For example, the probabilities in respect of a virtual deck of cards should be identical to a physical one.

Customer choices

If the customer has opted to use third-party software to create a bespoke user interface, the Commission acknowledge that the operator has limited control as to the information he may have chosen to block from view. The technical difficulties of asking operators to police or circumvent such software are so considerable that the Commission has taken the view that the customer accepts when activating the interface that he may be side-stepping measures established by the operator for his protection.

Similarly, the Commission does not require operators to check for compatibility of the customers’ own operating software, beyond statements such as “this game requires the latest version of Macromedia Flash”. It also acknowledges that the operator has minimal control over the end-user device performance or network speed, even in time-critical events such as bingo, where the speed with which the operator and the remote customer can communicate (for example, to “call” a win) may play a part in the participant’s success. It does ask the operator to devise and notify its customers of the rules which apply if two calls are received simultaneously.

Other delays

To ensure that in-running betting is fair and open, the Commission proposes to ask operators to provide information as to the length of the delay inherent in any broadcast, by means of warnings on home pages and further detail where required. Customers should be made aware that other participants could have an advantage in terms of the speed at which they are each receiving “live” information.

Bots

The Commission wants players to know when they might be at a disadvantage because another participant in the same remote gambling event is using software (a “robot” or “bot”) to play against them. This provision could cut both ways, as skilful players are sometimes able to exploit a bot’s conservative play. Nevertheless, the Commission proposes that players will at least make an informed choice about the participants with which they are prepared to play. Where operators use bots, they should state this openly and investigate customer complaints if the use of bots is prohibited on a site but the play suggests that one may be in use. Of course, there can be no protection for bots which are independent of the operator themselves – and which are being operated by third parties.

Random number generation (“RNG”) and autoplay

The Commission proposes to adopt a definition and formalised criteria to ensure the randomness of RNG outputs and game results, along the lines of those enacted in Malta and the Isle of Man. If any change to game rules, probabilities or payouts is made, then the virtual events affected should be taken offline for at least 10 minutes to ensure that the customer can assume that these factors will remain constant while he is gambling.

If the customer wishes to use autoplay functionality to gamble, the Commission proposes to make it obligatory for him to set a fixed time and a fixed stake on this activity and for the operator to make the results of the individual gambles obvious, so that the customer may cancel the autoplay if he wishes.

Adaptive behaviour

The Commission does not consider adaptive behaviour to be a necessary component in the creation of remote events, and makes reference to the fact that it is currently prohibited in both Alderney and the Northern Territory of Australia. This is possibly the element of the consultation about which the Commission is least certain, and it expresses concern at the potential effect of adaptive behaviour on remote gamblers. It lists a number of the standards it might set if it chose to allow adaptive behaviour and asks contributors to comment further on these suggestions.

Interruptions and failures

Operators will be required to have policies in place to deal with disruptions and back-up systems to retain data in the event of severe system failure. The consultation paper suggests that different approaches will be appropriate depending on the nature of the play. In peer to peer betting, it may be appropriate to suspend only those markets where significant events have altered the betting market during the interruption. If gaming, it may be preferable to allow some gambles to stand (such as those interrupted between the result of the gamble being determined and the final outcome being communicated to the customer), whereas others may be voided (those where a bet request is received but not acted on as a consequence of the interruption) and the customer refunded accordingly.

Collusion

The consultation paper does not attempt to deal with the problem of money laundering but does cover deals with situations where two or more participants act together to cheat other participants. Operators will be required to take steps to deter, prevent and detect cheating (though how this is to work in practice is unclear).

Responsible gambling

The Commission favours an approach whereby customers are afforded easily accessible means of imposing financial limits on their own play, but does not propose making such financial limits mandatory for customers. It does encourage operators to impose time-based or session-based limits, based either on the customer’s deposit, or on his combined loss and spend. Under the second of these approaches, the customer may spend those monies he deposits up to the limit, but also any winnings he receives from the operator during this time. Cooling-off periods and restrictions on game cycle speeds and the number of game cycles that may be played simultaneously are considered but not recommended.

Operators are likely to be obliged to display clocks showing the time of day (rather than time logged in or other information) to provide customers with a “reality check” as to the time they spend in remote gambling. Operators must not encourage a customer to chase his losses, increase his stake or the amount he has chosen to gamble, or to continue to gamble when he has chosen to stop.

Security standards

The Commission are keen to ensure the operators protect their customers from unnecessary security risks, by keeping sensitive data confidential, making customer accounts available when required and assuring the integrity of gambling and account transactions and game outcomes. No industry-specific standards are likely to be implemented – the consultation paper discusses this possibility but concludes that the remote gambling industry is not unique in its exposure to security risks.

Conclusion

This consultation paper shows real intent on the part of the Gambling Commission to ensure that it creates a clear road map for the future regulation of remote gambling. The approach it has taken is reasonably liberal, giving even-handed consideration even to those elements of remote gambling prohibited in other jurisdictions, such as adaptive behaviour