On 28 March 2018, the Gambling Commission (the “Commission”) announced that it had entered into a regulatory settlement with Bonne Terre Limited t/a Sky Betting and Gaming (“SkyBet”).

SkyBet was found to be in breach of three social responsibility code provisions of the Commission’s Licence Conditions and Codes of Practice (the “LCCP”), all of which stipulate requirements for self-exclusion mechanisms. Specifically:

  1. in breach of the obligation to prevent self-excluded customers from participating in gambling (social responsibility code provision 3.5.3(1)), 736 self-excluded customers were able to open and use duplicate accounts to gamble;
  2. in breach of the obligation to prevent marking material being sent to self-excluded customers (social responsibility code provision 3.5.3(2)), approximately 50,000 self-excluded customers received marketing material by email, mobile text or push notification; and
  3. in breach of the obligation to return funds held in the accounts of self-excluded customers (social responsibility code provision 3.5.3(5)), 36,748 self-excluded customers did not have their account balance funds returned to them on account closure.

Owing to the above breaches (which spanned a period of three years), SkyBet must pay a penalty package of £1m, comprising of a payment of £750k to charities for social responsible purposes in lieu of a financial penalty. Richard Watson, Programme Director at the Commission, emphasised that “the £1m payment package should serve as a warning to all gambling businesses”.

Whilst timely reporting, cooperation and proactive investigation were regarded as significant factors in determining the level of financial penalty, it is evident that a failure to properly engage with social responsibility under the LCCP will, in any event, have huge financial repercussions. Such engagement may however be inherently difficult given the subjective nature of the principle of fairness underpinning the LCCP and the reasonableness standard governing the application of many of its obligations (including two of the social responsibility code provisions breached by SkyBet).

In the usual manner, the Commission’s public statement provides some “good practice” guidance (which largely reiterates guidance already available). Operators must:

(a) ensure that online registration systems and procedures are robust to prevent the creation of duplicate accounts;

(b) use all information available, including complaints from customers, to identify potential procedural weaknesses;

(c) promptly remove all self-excluded customers from marketing databases, including those held by affiliates;

(d) ring-fence the data of self-excluded customers to restrict access for marketing purposes;

(e) promptly return funds held in the accounts of self-excluded customers; and

(f) comply with requirements to self-report the occurrence of such events to the Commission.

Addressing only social responsibility breaches and resulting in such a large penalty package, this regulatory settlement is a reminder to operators that social responsibility obligations are important in their own right. Incidentally and further to recent advice on FOBTs and guidance on customer interaction, the Commission on 26 March 2018 issued a report detailing new plans to make online gambling safer. The report informs operators of the intention to enhance the regulatory framework for online gambling to better protect young persons, reduce the risks to vulnerable customers and ensure effective customer interaction and intervention. With regard to self-exclusion, the report emphasises that the Commission will “strongly enforce” participation with the national self-exclusion scheme, GAMSTOP, which will allow problem gamblers to block themselves from multiple operators. It is apparent that protecting customers from gambling related harm is a priority.

Given this renewed focus on social responsibility and in particular in connection with the issue of self-exclusion, it would be advisable for operators to review the Commission’s current social responsibility guidance alongside their policies and procedures to ensure compliance and devote additional resource to staying abreast of developments in the social responsibility sphere.