The most difficult year for the UK gambling industry is probably behind us. However, according to experts, representatives of the sector need to unite to cope with the new challenges of 2019.
What happened to the UK gaming industry in 2018?
Restrictions on FOBT
Representatives of the gambling community hope that the tightening of regulation that enveloped the UK gambling industry in 2018, this year should weaken. At the same time, statistics on the number of people dependent on online gambling are expected to decline after FOBT fixed-rate terminals have almost gone into oblivion. In addition, it may be possible to see the reverse side of the protest aimed at the level and content of gaming advertising due to growing concern about the increased impact of gambling on children.
Sanctions against gambling operators
Then there was an increase in already tough measures against the operators. The Gambling Commission (UKGC) imposed fines and financial penalties totalling £28 million last year. The Office of Competition and Markets has dealt with alleged violations of the Consumer Protection Act relating to bonus promotions and cash withdrawal restrictions. The UK Office of the Information Commissioner was also closely monitored by the industry, and the GDPR posed a threat of massive fines and data leaks, including spam letters and messages sent by marketing affiliations. Finally, CAP advertising standards became stricter for the gambling sector after October 31. In addition, there was a demand for stricter compliance from the UK Gambling Commission due to shortcomings in marketing for both operators and their partners.
Stronger control over online casino operations
However, it would be wrong to assume that there will be no further consequences from the letter sent by the Gambling Commission to online casino operators in early 2018. Recall that it was said to take urgent measures to combat money-laundering and comply with social responsibility measures. Even more serious in this regard, the Commission has focused its efforts not only on working licenses, but also on licenses for personal asset management. This should not come as a surprise to anyone, as, in fact, it is a logical continuation of the Commission’s motto of many years: senior management must take responsibility for regulatory risk.
In June 2018, the commission promised to further increase penalties until the expected standards are met. This promise was followed by the first enforcement report, in which they listed top 5 regulatory concerns such as anti-money laundering, customer interactions, self exclusion, unfair conditions and practices, and marketing and advertising. Operators who have been forced to take enforcement action for violations committed since the report’s publication will have the difficult task of explaining why they have not paid sufficient attention to clear good practice recommendations that are clearly spelled out in the report.
The commission’s view is also focused on those online licensees who operate from other countries. As evidence of this, last November Daub (Alderny) Limited was fined £7.1 million and Casumo Service Limited £5.85 million. Both operators were found to have committed global regulatory violations. As a consequence, UKGC was told that the non-compliance raised serious concerns about good governance and risk mitigation for licensing purposes in the remote casino sector.
Adhering to a strong position
Last year’s changes led to the assumption that the UK Gambling Commission has become one of the most formidable regulators. But the rigidity of regulatory repression should not have come as a surprise. After all, one of the main arguments of the British government in the difficulty of revising the 2014 lawsuit against the new regulatory regime and licensing of remote gambling, the Gambling and Betting Association of Gibraltar, was that the Gambling Commission would provide a higher level of client protection than other jurisdictions could.
MacArthur replaced Sarah Harrison: what followed?
With this in mind, the regulatory enforcement measures have been significantly tightened with respect to both anti-money laundering and social responsibility since November 2014 (when the UK regulatory regime came into force). This was particularly evident between October 2015 and February 2018, when Sarah Harrison was executive director of the commission, but showed little likelihood of weakening since Neil McArthur replaced her a year ago.
McArthur made it clear at the annual November conference about raising standards that he wants British clients to enjoy the fairest and safest gaming in the world.
“To achieve these goals, I can’t do without your support. It is essential that we work together to ensure the best safe and fair gambling conditions in the world,” McArthur told delegates.
Tax increase in 2019
With such a program, the cost of a claim security guarantee is likely to continue to increase throughout the year. Operators should take into account the increase in the tax on remote gambling from 15 to 21% from April 1, 2019, as well as constantly increase the focus on protecting players, pointing to additional types of control and restrictions for online gambling, including a ban on the use of credit cards. In the second quarter of 2019, a significant shift in concerns about the level of online gambling advertising seen by children and their vulnerabilities is likely to be noted in a study by the charity GambleAware.
Additional financial contributions from operators
In addition, there is the potential to introduce a mandatory system of funding for research on harm from gembling, education and treatment, set at a much higher level than the existing voluntary contribution programme. It looks like the coming year will be an extremely challenging one for the UK gaming industry.
What do we expect from Braxit?
This is the most likely scenario if Labour comes to power as a result of Braxit’s current fiasco. The party’s proposals for a radical overhaul of gambling regulation and advertising, announced in September last year, include the introduction of a new gambling law that will increase the focus on public health and harm prevention.
The experts recommend joining forces to create the targeted cooperation called for by the UK Gambling Commission. In their view, there is a need to focus on pressure measures such as better data management in identifying problematic gambling, identifying best practices in client interaction and supporting initiatives such as new debit card tools that can be used to block gambling.
If this happens, managers will have a strong reason to side with the industry and be proud to proclaim that the client is indeed the most important value in every respect.