October 8, 2019

The British authorities have published two bits of guidance that are relevant to Wiggin’s online gambling clients. The Gambling Commission has issued a ‘reminder of expectations’ to licensees proposing to exit the UK market and the Department of Culture, Media and Sport has issued advice entitled ‘Preparing for no deal Brexit if you work in gambling’. Neither strike a particularly cheerful note but they are useful in that they do plug two gaps in the coverage of existing regulatory advice.

We covered the ‘closing a business under a British licence’ a few days ago on the blog but it’s worth a recap.

Closing a British licence

To take the ‘reminder of expectations’ first, the advice from the Gambling Commission is split into two sections.

The first section deals with ongoing measures that the Commission expects of its licensees in the normal course of business, ahead of and separate to any closure plans, as follow:

• Licensees must have winding-up plans in place and must take steps to ensure that their customers are not ‘unnecessarily disadvantaged’.
• The Commission seems to acknowledge that if a licensee becomes insolvent then it cannot continue to trade. In such event, the Commission expects licensees to be aware of their liabilities and be sure that they can cover them (this may be somewhat optimistic and in the remarks aimed at consumers the Commission warns to check the degree of insolvency protection in place); they must warn consumers who place long-term bets that their stakes and winnings are not secured in the event of insolvency; they must also give consumers the usual information about the level of player protection in place (an existing LCCP requirement).

The second section of the advice is more tactical and deals with the closure itself:

• A closing licensee should provide ‘clear and concise information’ to consumers.
• A closing licensee should ‘show [that] they are in control of the situation’ by keeping consumers updated and giving information about potential routes for redress. This communication should be via ‘all available means’ including direct contact and wider messaging on social media.
• Licensees should discharge their liabilities to customers ‘whenever possible’.

There then follows a practical example of what the Commission would expect to see in the event of a bookmaker deciding to close its UK business. The main point to draw from the example is that the Commission clearly expects licensees who intend to close the whole or a part of their business to provide a ‘considered plan’. The tone of the document is very much that chaotic collapse should be avoided. The ‘considered plan’ should include a communications strategy and a time-schedule, including a ‘firm date’ for closure. Issues such as unsettled ‘ante-post’ bets should be handled clearly and fairly and in the case of insolvency licensees must consider what is best for the ‘majority of consumers’. Other matters dealt with include arrangements for the refund of customer funds and what happens to funds that are unclaimed or incapable of return. Licensees are finally required to commit the necessary resources to execute an ‘orderly closure’.

The ‘stick’ behind this set of expectations is hinted at in the preamble to the document: the Commission will act against licensees even if they are insolvent and can act against PML holders in any circumstances. Any dereliction of duty in relation to a closure under a British licence would also be likely held against the relevant persons in the event of them ever wishing to re-enter the British market or take an interest in a person engaged in the British market.

Businesses may want to review their terms and conditions in the light of this guidance.

No-deal Brexit

The shambles that is BREXIT has elicited a missive from the DCMS aimed at gambling businesses. With approximately 22 days to go one hopes that most businesses will already have set about planning for either the catastrophe or the dawning of the new golden era, depending on your politics. The DCMS advice amounts to eight broad heads:

1. Visas, work permits for your staff.
2. Have your staff done the ‘EU settlement scheme’?
3. Do you need to cross EU borders?
4. Data protection and privacy.
5. Check whether you need to change your accounting & reporting.
6. Consider the possible need for an EU online security representative.
7. Check whether you need to change your contracts to provide licensed content outside the UK.
8. Get ready to import hardware from the EU.

Each of these broad heads provides one or more URLs to more detailed advice. As most online gambling businesses will be established outside the UK, not all of the advice is applicable. The most relevant would seem to be the consequences under GDPR on which most businesses will already have taken advice.