UK Licensed Remote Operators react to fast moving events amid Covid-19 Outbreak

UK licensed remote gambling operators should take legal advice from our
specialist gambling licensing lawyers to seek to protect their businesses during these extraordinary times. Whether you are currently holding a licence or if considering applying for a remote gaming licence or if you have received notice of a compliance assessment, call us for a free consultation today on 0800 170 1538.

Background

Since the Covid-19 virus has taken over daily life in the UK and most of the globe there have been suggestions, including from the Gambling Commission (“Commission”), that customers may have increasingly turned to online gaming companies to fill the long hours in isolation. While this has come at the cost of land based operators, who have been forced to shutter their doors during the pandemic, it has also been suggested that many online remote operators may see an uptick in customers during the days of lockdown. It is important to note, however, that sports betting has reduced owing to the huge reduction in sporting events following the outbreak. For the reasons that are discussed in this article and also reports from some of the largest remote operators there doesn’t appear to be evidence of a significant increase in online gaming.

At the SBC Digital Summit last week Rank Group’s Director of Regulatory Affairs David Williams stressed that the group’s online casino offering had seen slightly reduced online logins and shorter average length of sessions while its Mecca Bingo platform had only seen a marginal increase in average session lengths. At the same conference GVC’s Martin Lycka confirmed that its operations had introduced two new virus linked markers of harm into its algorithm for detecting problem gambling but had seen “no drastic” changes in player behaviour.

A recent internal email at William Hill US which was seen by The Guardian newspaper, told staff “talk to your customers about what other things they can bet on – table tennis and Japanese baseball are proving very popular”. With most major sports events and fixtures cancelled, William Hill US took to its Twitter account and slightly oversold its football offering when it promoted betting on, “international soccer action”. By this, it meant the Belarussian Premier League which is one of the few leagues in the world still playing. Although this demonstrates creative marketing in other jurisdictions, UK operators are required to ensure that their marketing material complies with strict advertising codes, including the requirement to ensure advertising is not misleading.

With such a captive audience operators must be careful not to run the risk of incurring the ire of the Commission and other regulators who have been quick to reinforce operators’ social responsibilities. The UK Parliament stepped in at the start of the lockdown with Members suggesting online betting firms self-impose a daily £50 cap on online betting until the Covid-19 outbreak is over in an attempt to halt a potential rise in problem gaming brought on by increased isolation and boredom. Carolyn Harris, Member of the UK Parliament and chair of its Gambling Related Harm All Party Parliamentary Group, recently tweeted that she has received concerned emails during “lockdown” from people “getting inundated with bookies emails, texts etc.” aimed at “tempting” people to gamble online. It is this sort of behaviour which may push the Commission and/ or the government to act before the industry does.

Since then the government has acted. There has been a whole raft of measures with growing concern from the industry around just how permanent those steps may prove to be.

Gambling Commission

Key among the Commission’s priorities is, as ever, protecting children and vulnerable adults from being harmed by gambling. On the 25 March the Commission’s Chief Executive Neil McArthur set out consumer protection, responsible marketing and ongoing compliance with licence conditions among his main expectations. In order to safeguard these groups the Commission warned that customer protection must be paramount and operators must act responsibly especially around affordability checks and increased social responsibility interactions.

McArthur ordered operators not to, “exploit the current situation for marketing purposes”. Operators are expected to on-board clients in a socially responsible way. He also made clear that licenced operators must ensure that their affiliates are conducting themselves appropriately[1]. This was just the start in what has become fast evolving advertising guidance to the industry.

UK Betting and Gaming Council

As pressure mounted from both Commission and the UK government for the industry to take action, on the 27 March the Betting and Gaming Council (BGC), the single industry association representing betting offices, online gambling businesses and casinos formed in November 2019, published a ten point plan for safer gaming during the pandemic (which can be found in full at the end of this article). Excluding lotteries the BGC represents approximately 90% of the UK betting and gaming industry. It is a condition of membership that all members must adhere to the BGC’s Code of Conduct designed to achieve the highest standards and build public and institutional trust in the industry.

In addition to providing for minimum enhanced standards members have committed to reporting black market operations and rogue or inappropriate advertising to the BGC, who will in turn report it to the Commission. They have also agreed to enforce their affiliates to comply with the ten point plan pledges and apply a strict one strike and you’re out policy. Affiliates must in no way mention or use the words associated with COVID-19 such as ‘’bored’’, ‘’isolation’’, ‘’stay at home’’ amongst others. The BGC is also to develop a Code for Affiliates.

Following the guidance from McArthur and the Commission, the BGC wants its members to review their marketing content and target audiences to aim to ensure that they and their affiliates do not use advertising to portray gambling “as a suitable or desirable response to those experiencing boredom or frustration during self-isolation”. The BGC has committed its members to signpost customers to GamCare advice and the 24 hour free to call National Gambling Helpline and GAMSTOP[2] for self-exclusion in their safer gambling messaging. Particularly where issues around anxiety or isolation are apparent from customer interactions.

Perhaps in response to widespread comments, including those by the All Party Parliamentary Group, the BGC has also included a pledge for operators to ‘actively promote deposit limits’ as part of their Covid-19 strategy. Members operating heightened monitoring shall actively promote deposit limits and send a deposit limit message with a link to the tool to any player exhibiting abnormal patterns of play that are a marker of harm. Both of these pledges go above and beyond the minimum requirements set out in the relevant social responsibility codes in the “Licence Conditions and Codes of Practice (“LCCP”).

For further advice on how your business should comply with the BGC’s 10 point pledges contact one of our
specialist gambling lawyers.

The UK Government

On 20 April UK sports Minister Nigel Huddleston wrote to the BGC as well as some of the industry’s largest online operators urging ‘further proactive steps’ to ensure gambling consumer protections during the national lockdown go well beyond the ten point plan.

One of the minister’s key demands was for ‘comprehensive data sharing’ of player trends and habits with the Commission to better monitor and understand behavioural changes during the lockdown period. The minister also touched on existing pledges by the industry to make better use of advertising technology to target away from vulnerable people as well as asking for an update on commitments to fund research, education and treatment.

While new legislation would be required to compel operators to share such data the BGC CEO Michael Dugher responded on 27 April with a raft of commitments from its members including a promise to share such data with the Commission. Responding to the Minister on advertising, Dugher also reiterated that the Council is taking action to ensure all of its members undertake responsible advertising. It seemed as though the government and the industry had reached an understanding.

An advertising blackout

Suddenly on 27 April, the BGC announced that all of its members will voluntarily remove all TV and radio gaming advertising during the Covid-19 lockdown, subject to existing contractual commitments. Where adverts cannot be removed from broadcast, existing TV and radio advertising slots will be replaced by safer gambling messages. A possible warning sign could have been the Advertising Standards Agency’s (“ASA”) warning on 7 April that the “conduct of the online gambling industry, including the nature and frequency of its advertising, is under particular scrutiny during this period of national emergency”. The ASA described how ‘situationally vulnerable’ people were particularly at risk and introduced an expedited complaints procedure to report any gambling ads during lockdown which refer to the pandemic or even touch on themes of boredom or family problems.

BGC Chief Executive Michael Dugher commented: “From day one of this crisis we have sought to protect customers potentially at risk, including announcing stepping up safer gambling measures as part of our ten pledges for covid-19 in March. This latest move by the regulated industry further underlines our commitment to safer betting and gaming with many people cut off and feeling anxious.”

Dugher also expressed hope that non-BGC members such as the National Lottery and society lotteries will follow their lead and halt advertising. The ban, which will be reviewed once current lockdown measures are relaxed, is due to be implemented ‘no later than Thursday 7th May’. The commitment will remain in force for six weeks until at least 5th June.

Conclusions

In order for the industry to come through this crisis in a sustainable way it is essential for all operators, especially those not members of the BGC, to heed the warnings of Parliamentarians, the regulators and the industry bodies. A short term approach to exploit the crisis will very likely lead to more stringent regulations being imposed as well as a risk of permanent restrictions such as daily limits on customer’s spending following the significant reduction in stakes imposed on Fixed Odds Betting Terminals (Category B2 Gaming Machines) a year ago. Indeed, from 31st March all online operators have been required to participate in the National Multi-Operator Self-Exclusion Scheme (GamStop), as required by Social Responsibility Code 3.5.5[3]. This is a free service which allows customers to self-exclude from multiple gambling sites with one registration. Indeed, two operators had their
operating licence
suspended for failing to implement the code requirement by failing to participate in the scheme before 31 March 2020. These social responsibilities are not going away as a result of this crisis and in fact they are likely to increase if operators that are not members of the BGC fail to take the same action. Similarly, AML requirements, client on-boarding policies and all social responsibility measures in LCCP must continue to be strictly applied and the Commission expect all online operators to step up affordability checks and social responsibility interactions and act in a responsible manner.

A separate article will review two recent high-profile enforcement cases in which significant financial penalties totalling £24.6 Million have been levied on UK licensed operators for social responsibility and AML failings.

UK licensed remote gambling operators should take legal advice from our
specialist gambling licensing lawyers
to seek to protect their businesses during these extraordinary times. Whether you are currently holding a licence or if considering applying for a remote gaming licence or if you have received notice of a compliance assessment, call us for a free consultation today on 0800 170 1538.

Notes

The BGC’s ten point plan to increase consumer protections and responsible marketing from all operators is set out in full:

  1. Increase safer gambling messages across all sites and direct to all customers
  2. Step up interventions if customers increase time and spend beyond normal pre-crisis patterns
  3. Actively promote deposit limits
  4. Action to ensure appropriate and responsible advertising including monitoring volume
  5. Report all illegal, rogue advertising from black market online operators
  6. One-strike-and-you’re-out policy where affiliates breach pledges
  7. Signpost help to GAMCARE and the National Gambling Helpline and GamStop for self-exclusion
  8. Commitment to ensuring funding for Research Education and Treatment (RET)
  9. Welfare checks and well-being help for staff
  10. Supporting the Government’s ‘National Effort’ with volunteers and facilities


[1] https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/covid-19-a-message-from-neil-mcarthur-to-online-gambling-operators

[2] https://www.gamstop.co.uk/

[3] Social responsibility code provision 3.5.5 provides as follows for remote operators: ‘Licensees must participate in the national multi-operator self-exclusion scheme.’

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