Better Gambling Protection Rules in UK to Take Effect on October 31stAugust 10, 2018 10:14 am
The United Kingdom Gambling Commission (UKGC) has announced a new set of rules that gaming firms will have to comply with starting October 31st. They are largely geared toward protecting customers from advertising that’s deemed to be deceptive or that targets vulnerable members of the population, with stiff fines awaiting those operators breaching the new rules and misleading consumers.
About the New Restrictions
Under the terms of the new regulations that pertain to licensed gambling firms in the United Kingdom, the UKGC will have additional powers of enforcement, including the ability to levy unlimited fines for breaches of the advertising rules. Additionally, companies will have to resolve customer complaints internally within eight weeks, after which the user would have the right to bring the dispute to a third-party arbitration body. Both of these measures will increase the costs of doing business for those enterprises that operate under a UKGC license.
In a statement on its website, the UKGC outlined some of the other details of the rules, with the regulatory organization stating that it will now be better placed to tackle gambling promotion that targets children, and advertising that “glamourises gambling” in general. In addition, cumbersome withdrawal restrictions, such as those sometimes associated with bonus offers, will trigger regulatory attention more quickly than they currently do, while businesses will also be punished for sending spammy emails and texts. The Chief Executive of the Gambling Commission, Neil McArthur, commented:
“Protecting the interests of consumers is a priority for us and needs to be a priority for gambling operators. These changes will protect consumers from irresponsible advertising and misleading promotions, ensure that they can withdraw their money more easily, and will mean that firms have to deal with complaints more swiftly.”
Sites Responsible for Affiliates
In one of the most controversial sections of the text, “Licensees are responsible for the actions of third party parties, including marketing affiliates” when it comes to advertising. This means that online poker, casino and sportsbook providers can be held to account for content independently produced by websites that drive traffic to their gambling destinations.
It’s not clear exactly how broad the reach of these provisions will be. Not only do major real money gaming enterprises maintain lucrative relationships with high-traffic industry websites, but they also transact with many smaller affiliates as well. For instance, many Twitch.tv streamers encourage their users to sign up with gambling sites using their referral codes. Even refer-a-friend links, which basically allow any user to receive credit for the friends and acquaintances that they direct to a site, might be covered by this language. If this is the case, then it may prove impossible for firms to satisfy the requirements of this section because they would have to supervise the content made by hundreds, if not thousands, of others.
Sky Betting and Gaming, which is in the middle of being acquired by the Stars Group, terminated its U.K. affiliate program in September 2017 amid concerns that it could not properly police what affiliates were doing. Now that the UKGC has committed in writing to the principle of gaming corporations being ultimately responsible for affiliate activities, we could see more businesses shutter their affiliate divisions.
Advertising to Children
The restrictions on marketing gambling services toward underage consumers are notoriously vague. For the past year or so, the Advertising Standards Authority (ASA), which works closely with the UKGC, has found several online casino companies to be in violation of the advertising rules simply for having graphics on their web pages that would tend to appeal to children. For example, in one case involving Coral Interactive, the image of a wizard used to promote a game called “Lucky Wizard” was found to appeal to the under-18 crowd because the wizard was “highly stylized with a large podgy nose.”
Given the subjectivity involved in making such judgment calls, some gambling entities question the wisdom of granting the UKGC the ability to levy fines for these kinds of infractions. The ASA has committed to providing further clarification on this topic later in the year.
The new UKGC guidelines were announced following the conclusion of a consultation that was open for twelve weeks starting in January. Licensed operators, trade associations, consumers and others interested in U.K. gambling were able to submit responses, with the largest group of responses coming from consumers and consumer groups, which sent in 87 of the total 130 responses received by the Commission.
Overall, members of the public have broadly been supportive of the need for stronger customer protections, and feel that the UKGC has been acting appropriately. Meanwhile, dissenting voices have mainly come from within the gambling industry, which believes that some of the restrictions are too burdensome and that many of them were unclear and therefore difficult to comply with.
Challenges in Store for U.K. Gaming Firms
The United Kingdom is widely praised around the world as a model to follow for online gambling licensure. This may be true from the public’s perspective and that of the government, but some gaming professionals think otherwise.
Companies need to follow the stipulations not just of the UKGC but also of the ASA, the Competition & Markets Authority, and the Information Commissioner’s Officer. Such an alphabet soup of oversight bodies means that ordinary businesses are often at a loss to understand what they are and aren’t allowed to do. This tends to reward larger organizations, which have the resources to staff large compliance and legal departments, at the expense of niche operators who may elect to steer clear of the United Kingdom.
Overzealous regulation also incentivizes the “gray market” economy. Some entities will undoubtedly feel that it’s worth the risk to serve the United Kingdom even without proper licensure. This is what happened in Australia, which banned online poker in August 2017 but nevertheless boasts several offshore poker sites that happily welcome its citizens.