The UK Gambling Commission
(UKGC) is continuing to push for new standards in the UK regulated gambling
sector, and its latest move sees the Commission focusing on VIP policies.
The rules will require licensees to carry out enhanced
affordability and responsible gambling checks, with the warning that the use of
loyalty schemes may be banned if operators don’t comply.
Under the newly announced rules, operators will have to
establish that spending on the part of any customer is both affordable and
sustainable and will also have to carry out a check on a customer’s source of
funds. Past gambling behaviour will also need to be checked for evidence of
gambling related harm before any customers can be considered a VIP.
This will mean operators having up-to-date evidence of
the player’s identity, their current occupation, and an indication of where the
money used in their gambling comes from. These checks, together with gambling
harm assessments are to be carried out regularly on VIPs.
Speaking about the new rules, the Chief Executive of the Gambling
Commission, Neil McArthur, said that the future of VIP schemes was in the balance
and that if there was no sign of significant improvement in this area, they
would have to take the step of banning such schemes.
The new rules are set to take effect from October 31 and
follow a consultation carried out on the issue of high-value customers.
According to the UKGC, respondents in its consultation generally agreed that
the additional checks were necessary.
Some respondents pointed out that additional funds check
for all VIPs would exceed the Betting and Gaming Council’s (BGC) voluntary
code, as it would require checks on a significant number customers who were below
the anti-money laundering threshold. But the UKGC argued that these checks were
still necessary as customers are likely to be incentivised to spend more when they
The UKGC have also made it clear that each source of
funds check has to be supported by evidence provided by the individual, and
cannot be based on data such as property values or other open-source information.
The rules will also require operators to take what the UKGC describes as ‘significant
steps’ to confirm that a player has not previously self-excluded. The
Commission noted that some had concerns this rule would dissuade some potential
problem gamblers from taking the step of self-exclusion, it emphasised that there
was no outright ban on self-excluders.
In addition, operators will have to ensure greater
oversight of VIP schemes. This includes the maintenance of a full trail of
information, covering all stages of the relationship with the customer, while
one specific individual should be in charge of the scheme’s compliance. The rules
also call for supervising managers to be rotated so that objectivity is
To support staff in managing VIP programs, the UKGC rules
call for VIP managers to be given greater training, both on safer gambling and
anti-money laundering issues, along with job descriptions that reflect the
nature of their compliance duties. In addition, such staff should not be given
Bonuses or remuneration that is based on a customer’s
losses or overall spend. They also emphasise that incentives in any VIP scheme
should not encourage customers to undertake significant risk behaviours, such
as spending excessive time on gambling or chasing losses.
The UKGC rules will be in addition to the existing BGC
voluntary code, which already restrict VIP schemes to those who are aged 25 or
over. In its rules, the Commission said that they recognised that those customers
aged 18 to 24 are more likely than other age groups to be problem gamblers and
so urged operators to take extra care with younger VIP customers.
Addressing the reasons for the new rules, McArthur said
that they came about in response to an awareness of VIP abuses and failures on the
part of industry incumbents:
“Our enforcement work has identified too many cases of
misconduct in the management of VIP schemes and this is the last chance for
operators to show they can operate such schemes appropriately.”
He went on to note that there had been some improvements,
undertaken by companies themselves, and that the number of customers who had
signed up to VIP schemes over the last year had dropped by 70%. But although he
said that this was a positive, the new rules would help to ensure that there is
continuing progress to help vulnerable customers.
A significant number of the new rules came out of a
working group that was set up at the start of the year, led by major gambling firm
GVC, and have already been incorporated into their industry code by the BGC.
That working group was itself a response to pressure on
the industry from politicians and media outlets. VIP schemes have become
controversial after a series of investigations, both by the UKGC and the media,
found that operators were failing in their responsibilities to some VIP
For instance, the House of Lords’ gambling select committee, which looked into regulatory changes, found that data from nine betting companies showed that while only 2% of customers were considered VIPs, they accounted for 83% of all deposits. The All-Party Parliamentary Group on Gambling-Related Harm has also called for these schemes to be banned completely.
As well as pursuing changes to the way that VIP schemes
are administered, UKGC have also called for comments on plans to revamp game
design, which has become another area of concern in recent months. Last week,
the BGC said that its members would limit the spin speed on slot machines to
2.5 seconds per spin, and would ban both turbo play, which allows customers to play
games faster, and multi-slot play, which involve playing on more than one slot
game at a time.
Despite these announcements however, the UKGC have said
that there was more to be done in this area and have proposed the banning of the
Auto Spin feature among other changes.