New Rules by the UK Gambling Commission and Their Impact

The UK Gambling Commission announced new gambling rules earlier this year to make gambling safer and fairer. Since online operators are required to follow these new rules, it has sparked an interesting debate since gambling platforms are to verify the age and identity of customers before they can gamble.

The gambling business is growing at a staggering pace. According to the Gambling Commission, 

“Statistics show that industry profits (1) from the sector have grown 10% to 4.7bn in the last year, and public participation has increased from 15.5% in 2014 to 18.3% in 2017. It is estimated that nine million people across Britain gamble online.”  

Safety for Children

Previously, the customers did not have to verify their age at the time of gambling. They could verify within 72 hours, making it possible for underage participants to enter a game. The operator, however, was not allowed to release the winning unless the person verified their age. And if found underage, they would be denied the winnings.

Under the new rules, the player cannot enter the tournament unless they verify their age. They can’t even deposit funds in their account or use free bets or even play with someone else’s money unless they prove their age.

The rules are much stricter now as it applies to free-to-play games as well. Technically these games do not constitute gambling since there is no real prize money involved, however, legally the underage participants still cannot participate.

Fairer Gambling Environment

There have been incidents where gambling platforms have asked for additional ID information when a winner tries to withdraw. Almost 15% of the complaints were about incidents where people were unfairly prevented from claiming their winnings. 

Under the new rules, all the required information such as name, address, and date of birth, is collected before the customer funds his account. Remote licensees are required to verify these things at the very beginning. If there is a need, they should promptly ask for additional information. 

They are also required to inform the participants about the identity documents and other information they might be required and take any necessary steps to maintain that information. These changes will help prevent fraud or criminal activities. Now the operators won’t be able to come up with excuses of asking for additional information while withdrawing funds.

In general, when the operators have such information, they can prevent harm and detect any illegal activity. 

Another impact of the new rules is that the person will be identified if they have been self-excluded. Verification by operators will mean that unless the customer verifies their details or provides the required info, they won’t be allowed to gamble. The operator can check these details against their own database as well as the one that Gamstop is holding.

How are these changes helping the population?

First, children and minors will be protected from the harmful impact of gambling. Second, people will also be shielded from fraud and other gambling-related crimes. And third, upon withdrawing their winnings the customers will receive those without unnecessary delays.   

Britain is the largest regulated gambling market in the world. It is imperative that it should be held up to the highest standards of regulations. The new rules were proposed after an official review of online gambling. 

In a nutshell, the changes intend to achieve the following;

• Protect children and ban operators from providing free-to-play games unless the customers’ age is verified
• The new process should increase the speed and accuracy of age verification
• Improving the effectiveness of age verification processes
• Operators can limit the spending of players based on their affordability
• Ensure that unacceptable marketing and promotions are minimized as much as possible
• Handling disputes and complaints swiftly and efficaciously
• Helping customers with better interaction who might be experiencing (or on the verge of facing) gambling-related problems.

Of course, the reviews and improvements will not stop. We can expect more changes and going forward. For example, the gambling commission will likely suggest improvements in gambling-related products.   

Other suggested improvements for the future, mentioned in the UK’s gambling commission website are;

• Reviewing requirements on the protection of customer funds. This also entails evaluating the current protection measures and checking dormant accounts
• Examining the limits of gambling credit
• Analyzing changes to make sure that consumers can easily withdraw funds

Why the Need for Changes in Rules?

Simply put, the old rules had loopholes that were not in the customers’ best interests. For instance, three companies (Daub Alderney, Casumo and Videoslots) were fined a total of £14m for failing to implement effective measures that prevented money laundering and protected customers from gambling-related harm.  

As an extreme example, the gambling license of CZ Holdings was revoked after their license review. The company is now banned from providing gambling services in Britain. 

The crackdown is not unjust since the old form of rules was simply being followed in letter but not in spirit. Neil McArthur, the Commission CEO, is taking a strict stance on the rules. He mentioned that it is not enough to simply put policies in place, the participants need to understand the rules and should take responsibility for following and implementing them.

The following is a snippet of the changes in the rules, and compares them with the old ones;

Change	Previous	New
Age Verification	Online operators have been allowed 72 hrs to carry out age verification checks, which gives a slot to underage participants to gamble	Operators are obligated to verify the age of participants before they can deposit money in their account
Identity Verification	Gambling operators were not required to check for KYC (know your customer) before depositing money in the account, only after the participants have gambled	Operators are obligated to verify the name, address and date of birth of the player before they allow them to gamble
Eligible Games	Not mandatory	Underage participants are not allowed to play free gambling games (even though no money is involved)

When KYC is in check, it gives the operators more leverage to protect participants from harm. These checks also protect the participants from manipulative operators who try to put hurdles when withdrawing. Since the ID and related info is already submitted, it means that the operators cannot demand it when someone wins the bet.

Under the new rules, the shady online operators who demand unnecessary identity checks only when the customer tries to withdraw winnings cannot exploit the system. Just because of the new rules 15% of complaints regarding this particular issue can now be resolved. 

What this means is that the operators need to check someone’s age before they gamble and not after. This deterrence prevents children and underage individuals from gambling online, and hence, inhibits gambling-related harm.

The UK Gambling Commission has not prescribed exactly how the procedure should be carried out. But then this discretion should not give them freehand, as they have to comply and implement the rules to the best of their abilities.    

A Short Intro to the UK Gambling Laws

The new legislation aims to protect children and illegal gambling. It also assists gamblers to make safer bets and protects them from gambling-related fraud. Moreover, it protects children and people under self-exclusion options to help them overcome gambling addiction.

According to the definition of Gambling Act of 2005, it is “betting, gaming or participating in a lottery.”

Then there are six main types of gambling;

1. Arcade: Adult and family games 
2. Casinos: Both online and live casinos
3. Lotteries: This includes tombolas, sweepstakes, and raffles.
4. Betting: Online or bookmakers
5. Bingo: Online and bingo halls
6. Gaming machines: Examples include betting and fruit machines.

With the exception of arcades all gambling portals are regulated. Arcades are partially regulated. AGCs (gaming for adults) and FECs (gaming open to families) require gambling licenses from the Gambling Commission. UFECs (arcades that are open to families but do not serve alcohol) only require a local permit.

The latest risk rating by the UK Gambling Commission is as follows;

Gambling Sector	Current Overall Risk Rating
Remote (casinos, bingo, and betting)	High
Lotteries (remote and non-remote)	Low
Gaming machines, technical gambling software (remote and nonremote)	Medium
Casinos (nonremote)	High
Bingo (nonremote)	Medium
Betting (nonremote) On-course	Low
Betting (nonremote) Off-course	High
Family entertainment centers	Low
Arcades (nonremote)	Medium

This classification helps in understanding the new rules and their needs. It also helps to see the areas where the Commission is focused on. 

In this risk-based supervision and risk management, digital identity services will be promoted. The entity responsible for risk management is the Gambling Commission among others. The due date is set for October 2019. Also, enhancing overseas capabilities on an ongoing basis is on their agenda. 

Her Majesty’s Treasury (HMT) will be working with the New Digital Identity Unit along with private and public partners to promote digital identity services.    

What is the minimum age to legally gamble in the UK?

One needs to be at least 18 years old to legally gamble, be it online or live. Gambling operators, sportsbooks and online casinos are legally required to confirm that the participant is at least 18 years old. They usually confirm the age through ID and other supporting documents, if the need be.

An exception here is that 16-year-olds can participate in lotteries, football pools, and scratch cards. 

What will happen if an operator does not verify the age? 

The UK takes gambling violations very seriously. The players will not be given their winnings if they get caught. It means that the players must take it seriously that when they read “you must be 18 years old to access this website.”

Here is a short table that compares the legal age for gambling in different countries. 

Country	Legal Age for Gambling
Germany	18 or 21 depending on the state
Greece	21
France	18
United States	21

The Rules regarding Lottery are a little Different

The UK’s National Lottery follows stricter rules. The lottery has been running since 1993 and includes different games like Lotto and Thunderball. Gamblers in the UK can participate in pan-European and EuroMillions lottery, which include nine different countries.      

Please note that 28% of the lottery prize goes to “Good Causes,” and this has raised over £40 billion to date. 12% of the prize pool goes to the state and 15% covers the cost of running the lottery and selling tickets. 

According to the Uk Gambling Commission Act 2005, the list of offenses is quite long. Here we share a small part of the major gambling-related offenses.

Offense	Fine
Gambling by an underage individual	£1000
Employing an underage person to provide gambling facilities	51 weeks in prison and/or £5,000 fine
Cheating, attempting to cheat, or assisting  someone to cheat at gambling	51 weeks in prison and/or £5,000 fine
Operating gambling facility without  A licence or permit	51 weeks in prison and/or £5,000 fine
Violating advertising regulations	51 weeks in prison and/or £5,000 fine
Offering a machine without a licence or permit	51 weeks in prison and/or £5,000 fine

Let’s review the new rules by UK Gambling Commission to license conditions and codes of practice (LCCP) and their implications. These have risen the standards for alternative dispute resolution (ADR). More importantly, these have boosted the obligations regarding how licensees interact with those customers that might be at the risk of gambling-related harm. 

The latest changes will be applied later this year and the next year.

Changes to Alternative Resolution Providers (ADR)

The new rules make it an obligation for gambling businesses to only use those ADR providers that meet the additional standards along with the ADR regulations. Customer service, governance, and decision making fall under these additional standards. This makes the role of an ADR provider clearer. It also reassures the customers that the provider is objective (independent of gambling operations).   

The gambling operators are also required to interact with customers that might be vulnerable to being harmed. This has strengthened the requirements to interact with the customers.   

Note that these rules will come into effect on 31 October 2019.

The commission aims to make operators more responsible and encourages them to cooperate under voluntary arrangements for research funding. The funds will go to the  National Strategy to Reduce Gambling Harms in Britain. This aims to support greater transparency of the funds that the gambling businesses contribute over time.

These rules regarding operators and their contribution to research, prevention, and treatment of gambling fraud/harm will come into effect on 1 January 2020.

The Easiest Way for Gambling Operators to Comply with the UK Gambling Commission New Rules

At Shufti, we excel at real-time age and identity verification. Our mission is to follow and assist in implementing KYC and AML (anti-money laundering) regulatory compliance. Read our blog post for details on how we provide age verification for online gambling platforms.

We normally perform age verification immediately after completing the online identity verification. 

Identity verification is a multistep process where the end-user (gambling player in this case) is assessed for authenticity. This also helps establish the fact that they are who they claim to be. Once this is done, we can move on to age verification. For this, we normally require a government-issued ID document. Usually, driving license, ID card or a passport is used to verify age.   

With optical character recognition (OCR) we readily extract information from documents. This works so well for operators since they can perform age verification as part of the identity verification.