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UK Proposals For Intensified Checks Rile Online Gambling Operators

UK Gambling Commission proposals for pre-signup age verification and limits on player spending prior to due diligence checks are making the online gambling industry sweat, with one executive calling the propositions “almost dangerous”.

The commission announced in an online gambling review released on Monday that it will hold a consultation on proposals to require age verification checks before player deposits and gambling, a proposal that would even include demonstration games.

A plan to require due diligence checks before gambling has also been laid out for review, plus potential requirements to set spending limits that would only be raised after further information assessments, such as an affordability check, the commission said.

One executive predicted the proposals would cause a “little bit of a shock” to customers and would be “almost dangerous” for operators.

“Having to KYC (know your customer) your customers at registration is going to be a hell of a challenge if that’s ever implemented,” said Conleth Byrne, managing director of The Football Pools and a former Ladbrokes executive.

BetBright chief executive Marcus Brennan said he feared regulation could mean “death by a thousand cuts”.

“Source of funds checks for someone who’s only a £100 account, it’s going to kill that,” said the Dublin-based executive.

Both men spoke on a panel at SBC Event’s Betting on Football conference in London last week.

The commission’s proposals were previewed last week along with fixed-odds betting terminal stakes recommendations that drew far more attention, but were fleshed out with more detail in a new document on Monday. 

The proposal for limits before affordability checks would set off alarms in the industry, said Clive Hawkswood of the Remote Gambling Association.

“Is it right to have that level of intrusiveness?” he said in a telephone interview. “We could potentially do credit checks, is that enough?”

He called the proposals “light on detail”.

“How does a company make a judgement on every one of its customers, and how do they monitor it if their circumstances change?” Hawkswood said.

The commission said it was considering requiring operators to take earlier due diligence requirements to make responsible gambling measures more effective, to reduce unfair treatment of customers, and to cut the number of complaints to operators, dispute-resolution bodies and to the commission itself.

It cited “rationale” for merging the due diligence and age verification requirements into a single licensing condition.

Brennan said a requirement for affordability checks would be “not reasonable”.

“If you’re going to buy a Ford Focus, does the car dealer say to you, ‘I don’t know, can you afford that?’” he said during a break in the London conference.

The commission’s rationale, however, might be found in an appendix to the proposals: a list of principles suggested by Responsible Gambling Strategy Board, which advises the commission and government.

“Encouraging a consumer to take greater gambling risks is not the same as upselling in other retail and commercial contexts,” the board wrote.

The commission also proposed amending operator licensing conditions to include findings of a joint investigation with the Competition and Markets Authority on unfair bonus offers and free bet terms and conditions. 

It will examine whether gambling on credit should continue to be allowed, the commission wrote.

“We support the principle that consumers should not gamble with money that they do not have,” the commission wrote.

Online operators would also probably have a problem with a credit ban, Hawkswood said.

“If you withdraw credit cards, how do companies assess affordability? How is that joined up?” he said.

But a consultation is probably months away, and that gives the online gambling trade group time to assess members’ opinions and to talk with regulators, Hawkswood said.

“We need to understand what their concerns are.”

The regulator will also examine marketing practices that “reward more intensive play within a single gaming session”.

Those incentives “might not allow the player to reflect on their activity as they might when playing over a longer period of time”, the commission said.

It would intervene on a “precautionary basis” where it thinks there is a potential to cause harm.

The online gambling industry’s progress in minimising harm to players has been slower than expected, given the industry’s access to data, and its ability to identify customers, the commission said.