UK Gambling Market in the News — Weekly Round-up for March 30, 2018

Responsible Gambling Messages To Be Included For The Length Of All Television Adverts

Industry Group for Responsible Gambling (IGRG) enhances industry code for socially responsible advertising

The Industry Group for Responsible Gambling (IGRG) today announced a further enhancement to the Industry Code for Socially Responsible Advertising, requiring that throughout each television advert a responsible gambling message or a reference to www.begambleaware.org must appear.

The provision will come into force at the end of June 2018.

A statement from the IGRG explains that the Code was originally produced in 2007. It was followed by second and third editions in 2016 and 2017 respectively. Subsequently, as part of the Government’s wider review into gambling advertising, it became apparent that there were concerns that the previously required references to begambleaware.org and responsible gambling messages themselves were frequently not appearing on screen for long enough to be readily assimilated.

In the light of that and in recognition of the importance attached to this type of messaging the fourth edition of the Industry Code published today addresses that issue.

Commenting on the change, the IGRG chairman, John Hagan said:

‘As part of a wider package of measures flowing from the Government’s review, we believe this change to the Industry Code will help to improve the overall tone and content of gambling adverts, especially on television, in a way that will help to raise awareness of the need to gamble safely and responsibly. In addition, we are happy to reiterate our commitment to review the Code on an annual basis in order to consider any emerging issues.’

The Industry Group for Responsible Gambling (IGRG) is currently comprised of the Association of British Bookmakers; BACTA; the Bingo Association; National Casino Forum; and the Remote Gambling Association.

A download of the updated Code is available here:

https://www.rga.eu.com/wp-content/uploads/Gambling-Industry-Code-for-Socially-Responsible-Advertising-4th-Edition-March-2018.pdf

Bad News For Ladbrokes Coral

Online and retail gambling group loses UK Court appeal on GBP 71 million 2008 tax case

Just days after hearing that its acquisition by GVC Holdings plc had been green lighted by the UK Competition and Marketing Authority this week, Ladbrokes Coral received the bad news that its appeal in a GBP 71 million tax avoidance case in 2008 has been rejected.

The UK Court of Appeal rejected the Ladbrokes submission following February’s Tribunal Court ruling which supported the HM Revenue and Customs case against the gambling group.

The failure of the appeal probably brings to a close decade-long litigation between HMRC and Ladbrokes over an accusation that the gambling group, advised by accounting and audit specialists Deloitte, exploited a tax loophole which enabled it to avoid paying higher corporate tax (see previous InfoPowa reports).

The “transacting subsidiaries” loophole was subsequently closed legislatively by the UK government

Whilst acknowledging that it did try to limit its tax liability, the gambling group maintained that its arrangements did not fall within the remit of HMRC’s rules against tax avoidance at the time.

The bookmaker eventually paid the amount of GBP 71 million in taxes but later started litigating to recover the amount.

The tax Tribunal Court finding came down on the HMRC side, observing that Ladbrokes had been well aware that it had exploited a tax loophole to lower its tax obligation.

More Online Gambling Restrictions On The Way

UK Gambling Commission reportedly set to unveil new age-related regulations

The UK newspaper The Telegraph reported over the weekend that the UK Gambling Commission is about to unveil further regulations restricting online gambling.

The newspaper reports that the regulations will force gambling companies to introduce age checks on their websites in a bid to stop children from using them.

Providing free games on gambling websites without first carrying out age checks will be restricted in order to ensure that under-age players are not using these facilities.

Media coverage has long been critical of the use of cartoon and other themes likely to appeal to children on free games such as roulette, poker and slot machines, and there is concern that unrestricted free games may “normalise” gambling for a generation of children.

The Telegraph also reports that plans are underway to outlaw the current 72 hour delay for age verification checks.

BGO Reaches Agreement With CMA

Following investigation into terms of promotions

The UK Government’s Competition and Markets Authority (CMA) has reached agreement with BGO Entertainment Ltd (BGO) following an investigation focused on consumer protection, in collaboration with the UK Gambling Commission (UKGC), into the operator’s terms on bonus promotions.

According to the CMA, BGO has provided formal commitments to change the way it offers bonus promotions to customers in which it will make terms and conditions of its bonus promotions clear and will prominently flag any significant restrictions to players.

In addition, the operator has committed to doing away with terms which:

  • Require players to play multiple times before allowing them to withdraw their own money.
  • Prevent them from withdrawing their full balance by minimum withdrawal limits.
  • Could oblige players to take part in publicity.
  • Could be used to unfairly change promotions after players have opted in.

The announcement follows similar agreements with Ladbrokes, William Hill, and PT Entertainment (see previous InfoPowa reports).

“Gambling firms should not have terms that could be used to catch players out by unfairly changing their promotions after a customer has opted in,” George Lusty, CMA Senior Director for Consumer Protection, said.

“We are therefore pleased that BGO has pledged to make these important changes. Following the CMA’s action, the gambling industry is rightly taking steps to overhaul online terms and conditions that could be misleading or unfair.”

Lusty noted that before entering into these commitments with the CMA, BGO had already made changes to address some of the CMA’s concerns – such as removing restrictions on winnings from cash deposits.

The CMA has produced a ‘60-second summary’ to assist gambling operators in reviewing their practices and ensuring their terms and conditions are in line with consumer protection law.

It has also produced ‘advice for gamblers’ and a short video guide for consumers.

UKGC Confirms More Online Gambling Restrictions On The Way (Update)

Strong focus on child protections and problem gambling highlighted in new amendments

The UK Gambling Commission has published additional proposals geared at a “safer and fairer” environment for consumers.

Proposed changes include:

  • Wider reaching child protections with operators banned from providing free-to-play demo games until a consumer’s age has been determined.
  • Improving the speed and effectiveness of age verification processes.
  • Operators will be required to set limits on consumers’ spending until affordability checks have been conducted.
  • Further action on tackling unacceptable marketing and advertising and unfair terms, while improving complaints and disputes procedures.
  • Strengthening requirements to interact with consumers who may be experiencing, or are at risk of developing, problems with their gambling.

Neil McArthur, Gambling Commission Chief Executive, said: “Britain has the largest regulated online gambling market in the world and we are continually looking for ways to make it even fairer and safer for consumers.

“The proposals we have announced today are intended to protect children better, reduce the risks to vulnerable consumers and build on the measures we already impose on operators to know their customers and intervene at an earlier stage before consumers experience harm.”

In addition, five areas in which the Commission will undertake further work during the year have been identified:

  • Assessing the effectiveness of the current tools available to consumers to manage their gambling.
  • Reviewing gambling product characteristics to identify whether particular features pose greater risk of harm than others.
  • Reviewing requirements on the protection of customer funds and consider whether there are sufficient protections around dormant accounts.
  • Considering whether gambling on credit should continue to be permitted.
  • Considering whether there is a need to make amendments that will enable consumers to withdraw funds more easily.

Tracey Crouch Minister for Sport and Civil Society said: “We are committed to ensuring the gambling industry is safe and sustainable. These proposals for additional regulations will strengthen the controls already in place and further safeguard children and vulnerable people from the risks of online gambling.”

The Commission reminded operators of the coming into force of amended remote gambling and software technical standards on April 1, 2018, while also inviting stakeholders to register their interest in attending the next remote sector meeting scheduled for May 18, 2018.

Request to attend or additional information requests should be directed to remote@gamblingcommission.gov.uk.

Guardian Newspaper Columnist Proposes Nationalising The Gambling Industry In The UK

Sam Wolfson says there’s a solution to Britain’s alleged gambling problem… nationalise the industry

The generally anti-gambling newspaper The Guardian published an op-ed article by columnist Sam Wolfson this week suggesting that the solution to Britain’s gambling problem would be to nationalise the industry.

Wolfson acknowledges that he is a recreational gambler, and opines that gambling is now so embedded in British society that it is impossible to ban… but nationalisation would provide more closely regulated and less profit-driven activity, making it possible like the lottery to channel money into grass root sports, community projects and charity.

“There is absolutely no reason, however, why betting shops and online sites should not be nationalised, in the same way the lottery is. You don’t have to be a radical socialist to think that private bookmakers shouldn’t be given a licence to print money. Private companies would be able to bid to run betting shops, as Camelot runs the national lottery, making 0.5% profit on each ticket. But the vast majority of profits could go back into grassroots sport, community projects and taxes,” he wrote.

“With a single government owner it would be infinitely easier to stop problem gamblers moving between bookies and stamp out dangerous money laundering.”

Wolfson goes on to say that the idea was first floated in 1976 when the Tote suggested that all bookmakers should be nationalised.

“If it had happened we’d have had billions in government revenue and a controlled gambling environment. Instead we got high streets overrun with bleak betting shops, apps that pass British earnings into the accounts of faceless foreign casinos.”

https://www.theguardian.com/commentisfree/2018/mar/27/britain-gambling-problem-nationalise-industry-betting-terminals

Skybetting And Gaming Latest To Be Fined For Social Responsibility Failures

SBG accepts UKGC investigation findings

The UK Gambling Commission (UKGC) has sanctioned Bonne Terre Limited t/a SkyBetting and Gaming (SBG) with a GBP 1,008,600 penalty package for social responsibility failures.

Citing “serious” weaknesses in self-exclusion facilities, the investigation found:

  • 736 self-excluded customers were able to open and use duplicate accounts to gamble.
  • Around 50,000 self-excluded customers received marketing material by email, mobile text or a push notification within a mobile app.
  • 36,748 self-excluded customers did not have their account balance funds returned to them on account closure.

Richard Watson, Programme Director, said: “This was a serious failure affecting thousands of potentially vulnerable customers and the £1m penalty package should serve as a warning to all gambling businesses.

“Protecting consumers from gambling-related harm is a priority for us and where we see operators failing in their responsibility to keep their customers safe we will take tough action.

The penalty package :

1. Distributes GBP 241,894 to charity contributions as follows:

  • GBP 24,588 – the amount contained in the accounts of self-excluded customers which could not be returned to those customers. This is in addition to the sum already returned directly to affected customers.
  • GBP 217,306 – the Gross Gambling Yield (profit) from customers who opened and used accounts whilst self-excluded, between November 2014 and November 2017.

2. A further payment of GBP 750,000 to charities for socially responsible purposes in lieu of a financial penalty which the Commission would otherwise impose for breach of a licence condition.

This portion of the penalty comprises:

  • GBP 450,000 for the participation in gambling breach.
  • GBP 250,000 for the marketing material breach.
  • GBP 50,000 for the return of funds breach.

3. Payment of GBP 16,700 towards the Commission’s investigative costs.

Watson noted that “Skybet reported the issues to us quickly, cooperated with us and has taken this investigation seriously.”