What's the issue?
The COVID-19 crisis represents a potential opportunity for the games and eGaming businesses as people are stuck at home, often with not much to do. However, businesses need to act responsibly and in accordance with regulation and guidance. In fact, the crisis has, in some ways, focused renewed attention on the eGaming industry with MPs urging online gambling firms to impose a temporary betting cap of £50 per day during the pandemic as fears grow that punters are being pushed to riskier wagers in virtual sports and online casino games during the absence of live sport.
What's the development?
In response to the crisis, the Gambling Commission has:
- published advice to consumers on how gambling companies should keep them safe while betting online. It covers regulatory requirements
- written to gambling operators reminding them to act responsibly during the crisis, in particular with regard to consumer protection, marketing and compliance with licence conditions and codes of practice. It reminds operators that people may be particularly vulnerable at this time and that companies are expected to step in if customers are showing signs of experiencing or being at risk of harm. The Commission says it will step in immediately if it sees irresponsible behaviour by companies.
It has also Published a list of FAQs about licence applications during the crisis.
The focus on safety is, however, very much an ongoing one, as underlined in the Commission's recently published Business Plan 2020/21, and the Commission has announced the progress of its initiative across three industry working groups, to improve gambling safety:
- VIP incentives will not be available to under-25s. Suitability checks and an audit trail will be required for all new VIP members. The Commission will consult on the proposals and then amend its licensing conditions to reflect these changes, allowing a three month implementation period.
- Online advertising rules will be strengthened to protect vulnerable groups including by:
- Using a common list of negative search terms and suppression websites.
- Using customer data to ensure paid-for ads do not target vulnerable groups on social media sites.
- Implementing an approach whereby advertising is only targeted at over-25s in social media and 'pay per click' advertising where platform facilities permit.
- Age-gating YouTube channels and content.
- Adopting and rolling out to all affiliates a code of conduct which will be regularly amended and updated.
These measures will be adopted as soon as possible and included in the IGRG's Gambling Industry Code for Socially Responsible Advertising and compliance will be required from July 2020. The working group will continue to develop adtech solutions and work to inform and protect consumers.
- The industry is working on a code to ensure responsible product and game design. This will include removal of game features which might encourage intensive play such as slam stops and turbo buttons and removal of split-screen slots which have been associated with potential loss of control. This is set to be published in September 2020, following consultation.
The Commission has been taking tough action against those not complying with the rules. In March, it fined Betway £11.6m and implemented a package of measures after finding a series of social responsibility and money laundering failings connected to seven of its high spending customers. In particular, as a result of lack of consideration of individual customers' affordability and source of funds checks, the operator allowed £5.8m to flow through the business which has been found or could reasonably have been suspected to be proceeds of crime. The operator also failed to conduct source of funds checks on a customer who deposited £8m and lost £4m over four year period.
In early April, the Commission fined land-based gambling business Caesars Entertainment UK Ltd £13m for social responsibility, money laundering and customer interaction failures featuring VIPs. It also removed the licences from two online operators for failure to integrate with the self-exclusion scheme GAMSTOP. One of the suspensions has since been lifted but investigations continue.
The UK Advertising Standards Authority (ASA) has also issued advice on gambling advertising during lockdown and warned the industry that its behaviour is "under particular scrutiny during this period of national emergency".
What does this mean for you?
Another bout of expansion may be triggered by the Covid-19 emergency. In a countercyclical way the closure of sports betting because of the virus could lead to an expansion in other forms of betting available online and potentially usher in another big growth spate in the industry. With the Gambling Commission clearly taking its usual tough line on anyone flouting the rules, it is the businesses which act responsibly, who will emerge from the crisis in the strongest position.
