Tougher Licence Conditions for UK Brands

If times become harsh, the rules of the game turn equally harder; and 2020 got the gaming world by surprise.

21:37 29 January 2021

What could be a great year in terms of revenues caused by the spike in online activities influenced by the COVID-19 pandemics, ended with a series of tougher conditions that UK gambling operators never expect to face.

 

From credit card ban and GamStop requirement to changing the mechanics of the games, the whole industry is now getting reviewed from its legal roots to make sure that the wellbeing of all customers is the first and only priority for every licensee.

 

The Need to Harden the Industry’s Condition

 

In early 2020 the UK gambling presented at the Lords Chamber a year-long investigation regarding the changes needed to balance the impact of the gaming industry on the health and economy of the British people. The main issue was the disjunctive presented by the UKGC Executive chief Neil McArthur. On one side is the right to gamble of more than 24 million Brits. But in the other, are the lives and health of approximately 340,000 problem gamblers and more than a million at-risk to become one.

 

The main issue was the disjunctive presented by the UKGC Executive chief Neil McArthur. On one side is the right to gamble of more than 24 million Brits. But in the other, are the lives and health of approximately 340,000 problem gamblers and more than a million at-risk to become one.

 

Until recently, problem gambling wasn’t even considered a health hazard. But after its notorious change of status from compulsive behaviour to an addictive syndrome no different from alcoholism and substance abuse, the amount of responsibility of operators over the issue has been increased.

 

Although the tone from Crazy Star operator and other gambling companies in their top-level representatives has been one intended to minimise the harms from problem gambling, little has been evidenced to back those claims. Especially when the UKGC accuse them of repeatedly breaching the same conditions.

 

Common Breaches by Operators

 

Two of the main conditions that any UK gambling licensee must comply are the Anti-Money Laundering (AML) and the Know Your Customer (KYC) practices. The first requires operators knowing the source of funding used by their online patrons; while the second demands the complete identity verification of users, with special priority on preventing underage and vulnerable persons (such as self-excluded users) to access any gambling service or venue.

 

However, those were the most common license condition breechings. This has led to hefty financial penalties, like the £2.8 million fine to Boylesports Enterprise for failing AML rules in October 2020 and the license revocation of Silverbond Enterprises Ltd for the same issue. Regarding KYC, the penalties were mostly addressed to license revocations towards operators showing a severe disregard on their customer’s wellbeing.

 

For operators, the dramatic reduction of benefits in their VIP programme for High Volume Customers, -its most profitable strategy- was a hard blow. The reason behind was the unethical persistence from the programme staff to reach and make self-excluded customers, keep gambling. A complete violation of any social responsibility rule and practice.

 

Over the last 3 years, 36 operators have been facing severe penalties including getting their licenses revoked for the breaches we previously stated. However, there has been a continuous failure in the license condition while revenues keep growing, meaning that the current approach is not hard enough to make them reconsider a breach.

 

The UKGC Strategy

 

Currently, the UKGC has been advocated to enforce and penalize the activities of gambling operators. What many considered a series of desperate measures, were all previously considered but the hazard of COVID-19 and lockdowns only accelerated its imposition. However, the UKGC is taking another approach. This time directly on the key staff behind such lamented results.

 

Instead of fining or even revoking gambling firms licenses, all key members who failed to prevent the licensing breaches would be the ones facing the penalties. The measure might seem dramatic but appears to be more effective than a fine over the operators since they could recover it again, thanks to problem gamblers. Still, the UKGC’ main intention is to see operators actively collaborating to minimize the hazards of their services, and providing adequate help for those who by other circumstances are heading into an addiction path.

 

But to see that change, regulation should be adopted to the current needs and the 2005 act review is the necessary step that will make operators walk the line.

 

The Long-Time Expected Act Review

 

In 2005, the UK government created an online gambling Act. The Act provides a regulatory regime, where the presence of online gambling operations in the UK is legitimized; under the supervision of the Gambling Commission. But the impact and changes that the industry has faced like the widen internet accessibility, smartphones and social media, has increased by extent the presence of gambling companies, rendering the Act as an anachronism.

 

Since its creation, several amendments have been required. One of the most important was the 2014 amendment requiring all offshore operators to register a license to keep addressing their services in the UK. But as the conditions of the industry evolved and a full review of the Act still was needed. The request finally saw a light in December 8th 2020 when the review was approved with a deadline dated to march 2021.

 

For the UKGC, its powers will broaden to ensure for the preservation of all operators customers, and community 'wellbeing, with operators, compelled to act or otherwise face greater penalties than a license revocation.

 

The respect for the customers has to be mandatory in any industry. Not only in the courtesy and quality of the attention provided but also for the most fundamental regard of any human life. The actual conditions that operators face are consequences of an irresponsible approach were billionaire revenues seem to have more value than life. But once they convinced themselves to align with the values that the UKGC looks after such as transparency, fairness and social responsibility, gambling will finally become the safe and joyful leisure we all want.