There has been a lot of attention this year on eGaming from the government, the Gambling Commission, the CMA and the ASA. Problem gambling and unfair online promotions and advertising have been the focus for regulators.

Guidance

CMA guidance

In February, we reported on the CMA's guidance for online gambling operators to help stop unfair online promotions which 'trap' player money. Around the same time, the ASA published new standards on gambling advertising which focus on problem gambling. The new standards come into force on 2 April 2018 and:

• restrict ads which create an inappropriate sense of urgency (like 'Bet now' offers during live events) - in December, eGaming firms agreed on a 'whistle to whistle' TV sport advertising ban;
• curb trivialisation of gambling, for example, encouraging repeat play;
• prevent approaches which give an irresponsible perception of the risk or control such as "Risk Free Deposit Bonus";
• provide greater detail on problem gambling behaviours and associated behaviours which should not be portrayed, either directly or indirectly;
• provide more detail on vulnerable groups like problem gamblers that marketers need to work to protect.

Ads must not play on individuals' susceptibilities such as financial concerns or self-esteem and should not contain anything which might exploit vulnerable groups.

Reports

Government report on online gambling

The government published a report on gaming machines and social responsibility which makes a number of recommendations including:

• The FOBT (B2) slots stakes should be limited to £2 – legislation has since been passed to enact this;
• The stake limit for FOBT (B2) non-slot games (which includes roulette) should be set at or below £30 if it is to have a significant effect on the potential for players to lose large amounts of money in a short space of time;
• Banning the facility for machines to allow different categories of games to be played in a single session;
• There is a strong case to make tracked play mandatory across machines categories (B1, B2, B3);
• Extending to category B1 and B3 machines the kinds of protections, such as player limits, that are in place on FOBT (B2 machines);
• Working with the industry and others on steps to make limit-setting more effective – this could include ending sessions when consumers reach time and money limits.

Gambling Commission review of online gambling

The Gambling Commission published a review of online gambling in Britain and announced proposals to make online gambling safer and fairer for consumers.

Key proposed changes are:

• Enhancing protection for children by banning operators from providing free-to-play demo games before determining the consumer's age.
• Improving the speed and effectiveness of age verification procedures.
• Ensuring operators set limits on consumers' spending until the affordability checks have been concluded.
• Tackling unacceptable marketing and advertising and unfair terms, and improving complaints and disputes procedures.
• Strengthening requirements to interact with consumers who may be experiencing or at risk of developing gambling problems.

The Commission will undertake further work in the following areas:

• Assessing the effectiveness of currently available tools to help consumers manage their gambling.
• Reviewing gambling product characteristics to identify whether particular features pose greater risk of harm than others.
• Reviewing existing requirements concerning the protection of customer funds and considering whether there are sufficient protections around dormant accounts.
• Considering whether to make changes to enable consumers to withdraw funds more easily.

Enforcement

CMA action against online gambling firms

In March, the CMA launched enforcement action against a number of online gambling firms as part of its investigation into fairness of terms. The action focused on unfair obstacles which prevent customers withdrawing their money (whether or not as part of a promotion). The CMA is particularly concerned about:

• Daily, weekly or monthly limits on withdrawing funds which appear unreasonably low.
• Potentially arbitrary short deadlines on times customers have to verify their identity before withdrawing funds, especially where funds are forfeited if the deadline is missed.
• Dormancy terms which allow confiscation of funds or which impose excessive charges after a period of inactivity.

As a result, the CMA published detailed undertakings from Ladbrokes, William Hill and PT Entertainment, regarding their terms and conditions, in particular around withdrawal of deposits and advertising promotions. The CMA urged that these changes be adopted across the industry and published a set of 'dos and don'ts' for gambling promotions.

The firms involved have also agreed to be more upfront and clear in the terms and conditions of their bonus promotions. In particular, the changes mean:

• players won’t be required to play multiple times before they can withdraw their own money;
• gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to confiscate players’ money; and
• gambling firms must not oblige players to take part in publicity.

The promotions under particular scrutiny are those designed to attract players onto casino-like gaming websites by offering bonus funds when players put in their own money.

Gambling Commission report on enforcement

In June, the Gambling Commission published its report on enforcement action it has taken over the last year which sets out issues and practices it is concerned about and guidance operators should follow. The Commission warned operators that they are likely to face tough penalties if they ignore the guidance but lesser penalties if they report issues promptly and cooperate with investigation and rectification measures. Money laundering, problem gambling, unfair contract terms and practices, and breach of rules on gambling adverts, were cited as high priority concerns by the regulator.

Fines

There have been a number of high profile fines this year. The UK Gambling Commission fined BGO Entertainment Ltd (BGO) £300,000 for misleading advertising on its own and affiliate websites. The Commission found that BGO had not taken timely and effective action to address misleading advertisements and that it falsely provided assurances that issues raised by the Commission in July 2015, had been addressed. BGO was in breach of social responsibility obligations under the licence codes and the conditions of practice relating to free bet, bonus or similar offers. This was the first time the Commission has fined a gambling operator over advertising failings.

LeoVegas was fined £600,000 in May and will have to surrender any income received as a result of failings. The UK Gambling Commission concluded that the company:

• Was responsible for 41 misleading adverts.
• Failed to return funds to 11,205 customers when they chose to self-exclude and close their account.
• Sent marketing material to 1,894 people who had previously self-excluded.
• Allowed 413 previously self-excluded customers to gamble without speaking to those customers first or applying a 24-hour cooling off period before allowing them to gamble.

At the end of November, the Gambling Commission announced "widespread regulatory action" taken against online casinos and senior management. £14m in financial penalties were issued to three companies for failure to put in place effective safeguards to prevent money laundering and to keep consumers safe from gambling-related harm. Action was also taken against individuals responsible for failings. The Commission issued a list of common failings by remote gambling operators which include:

• Failure to conduct an appropriate assessment of ongoing and emerging risks of money laundering and terrorist financing, and to put in place and implement appropriate policies controls and procedures.
• Failure to introduce measures for customer due diligence, ongoing monitoring of customers and enhanced customer due diligence, both external risk-focused and internal controls and monitoring systems.
• Failure to keep adequate records of customer interactions and engagement.
• Failure to provide appropriate training for stuff on identifying and dealing with issues related to money laundering or terrorist financing.
• Failure to put into effect policies and procedures which make specific provision for the use of all relevant sources of information where there are concerns that a customer's behaviour may indicate problem gambling.