November 9, 2018

On 31 October, new licence condition 7.1.1.4 came into effect which states that licensees must ensure that they do not commit any unfair commercial practices within the meaning of the Consumer Protection from Unfair Trading Regulations 2008.  This includes enticing the ‘average customer’ to ‘take a transactional decision he would not have taken otherwise’.

The Gambling Commission recently published a page on its website to explain its expectations on transparency with customers where operators “participate in their own products” or provide incentives or rewards to certain higher volume players.

The Commission is aware that certain licensees (i) participate in their own products either directly or indirectly through a Group company; (ii) have agreements in place which provide enhanced incentives/rewards to certain customers which wouldn’t necessarily be available to the majority of the customer base; and (iii) allow employees to participate in their own gambling products against other customers.  The examples it gives are seeding markets, hedging liability through exchanges and purchasing entries into a betting pool, lottery or bingo product.

The Commission has reiterated the need for licensees to put the interests of customers first, by treating them fairly and communicating with them in a clear way that allows customers to make properly informed decisions.

To assess whether licensees are treating their customers fairly in this area, the Gambling Commission has recommended that licensees ask themselves the following questions:

• Do we participate within our own product, either directly or indirectly through a Group company?  If so, is this made clear to our customers in plain language?
• Do we offer enhanced incentives or rewards to some customers which wouldn’t be widely available to the significant majority of the customer base? If so, is this made clear to our customers in plain language?
• Do we allow our employees to participate in our product against other customers?  Is our approach clear to employees?  If employee participation is allowed, is this made clear to our other customers?  How do we ensure our employees don’t have an unfair advantage over other customers?
• Can we evidence to the Commission that all customers are treated fairly?

Further information can be found here