Insights Commission licensees – are your terms and practices fair and transparent? The Gambling Commission issues new guidance

The Gambling Commission (the “Commission”) has issued an update to its guidance to all operators on fair and transparent terms and practices (the “Guidance”) following its observation that licensees were utilising potentially unfair terms and treating customers unfairly, thereby falling short of the second licensing objective to ensure that gambling is conducted in a fair and open way.

Licensees are required under the licence conditions and codes of practice (the “LCCP”) to ensure they can provide evidence as to how their terms are fair and transparent. In addition to ensuring compliance with the Guidance and the LCCP, the Commission has directed licensees to review welcome bonus offers, particularly welcome bonus offers or those with wagering requirements in order to assess whether they are acting in compliance with consumer protection laws (as regulated by the Competition and Markets Authority (“CMA”)). Consumer protection laws set out how promotions, practices and account withdrawals should be handled by licensees and licensees can access the CMA’s guidance on the do’s and don’ts on online gambling promotions, here.

The Guidance outlines how licensees can achieve fair terms and practices by highlighting certain key areas under which the Commission has explained, amongst other requirements, what a licensee should and should not do in respect of each area. Some of the key areas include, but are not limited to:

  • transparency of terms and how to properly present significant conditions to customers;
  • the obligation on licensees to ensure that the terms on which gambling is offered are not unfair within the meaning of the Consumer Rights Act 2015;
  • ensuring that customers are made aware of all banned patterns of play;
  • how licensees should treat account inactivity;
  • restricting licensees from having terms which allow for them to vary or stop a promotion once a customer has signed up (save for instances of fraud prevention); and
  • ensuring that customers are clearly informed of their right to withdraw deposit balances at any time.

As mentioned above, the Commission has cited a number of areas for licensees to consider; the Guidance should therefore be reviewed in its entirety for completeness.

The Guidance touches on some of the same themes as last year’s High Court judgment in Green v Betfred, where the High Court ruled that Betfred could not rely on its contractual exclusions for wins attributable to a game defect because of failures to comply with the principles and requirements of consumer law (see our full analysis here). Clearly, it is now more important than ever for licensees to be conducting a stringent audit of their contractual terms and practices, reviewing how such terms and practices are, in actuality, delivered and presented to customers, and considering whether any adjustments need to be made to ensure that licensees do not fall foul of the requirement to ensure that terms and practices are fair and transparent.

The Guidance can be viewed, in full, here.