"Contactless" Checks: Insights from the Latest "White Paper" Regulations

Industry representatives in the UK have diligently scrutinized the new regulations recently unveiled by the UK Gambling Commission on May 1, 2024, with a particular focus on financial checks. The freshly introduced rules for the gambling sector encompass four key areas outlined in the initial round of consultations conducted within the ambit of the White Paper on the review of the Gambling Act. These areas include financial risk assessment (or affordability screening), direct marketing practices, online game design standards, and age verification protocols for brick-and-mortar establishments.

Rollout of the White Paper

The implementation of the new regulations is scheduled between August 2024 and February 2025. Notably, the accessibility review proposition is bifurcated into two segments. Firstly, a pilot phase, termed a "non-contentious accessibility test" by the Commission, will span six months and assess existing data. Concurrently, under a distinct process termed "light financial risk checks," the procedure will unfold in two phases. The initial phase will commence on August 30, 2024, triggered once net deposits reach £500, subsequently lowered to £150 by February 2025.

Regulatory Review and Consumer Protection

During an industry briefing on May 1, Tim Miller, Chief Executive of the Commission, discussed the "no-controversy review" and its limited impact on consumers.

Miller explained, "We're leveraging readily available user data, avoiding the need for credit bureau inquiries. Consumers won't be burdened with document requests, safeguarding their rights throughout the pilot."

On data analysis, Miller assured a phased approach. "We'll systematically analyze information during testing," he affirmed. Operators participating will assess databases, scrutinizing both historical and current bookmaker accounts.

Miller underscored that the pilot will maintain a rigorous yet impartial approach.

Furthermore, Miller disclosed the Commission's plan to engage small operators, acknowledging their potentially heightened regulatory obligations.

Two-Step Verification Process

The Commission is concerned that accounts failing to meet audit thresholds might be concealed. However, Miller stressed that the pilot project will identify customers initially overlooked in the "non-controversial review."

While the new creditworthiness rules are part of a contentious proposal, they have garnered generally positive feedback from the industry. Nigel Harvey, an AML consultant at Betsmart Consulting, asserts that operators were forewarned about the new rules and have been proactive in their preparations.

"I don't anticipate any surprises from the Commission. Operators have been diligently preparing for months, aware of the impending changes," Harvey remarks.

Harvey suggests that conducting checks in two stages will facilitate smoother integration of the rules, allowing for a thorough evaluation of their efficacy and proper implementation.

"The Commission's decision to implement a two-stage format is commendable. It underscores their commitment to consumer protection," Harvey comments. He also lauds the Commission's use of net deposits, which alleviates concerns about the seemingly low £150 limit and demonstrates a measured approach.

"As the Commission has emphasized, many operators already conduct such checks, some even pre-emptively before funds are spent," Harvey notes. He further appreciates the Commission's adoption of net deposits, which may assuage worries regarding the £150 threshold for gamers.

Growing Confidence in the Gambling Commission

Kevin Dale, CEO of eGaming Monitor, lauds the Commission's innovative pilot concept utilizing gamer databases.

"In terms of 'testing without controversy,' the idea of data-driven pilots with performance evaluations at the conclusion is commendable. Moreover, restricting checks to publicly available user data is a positive step," Dale remarked, expressing his approval of the advancements.

However, Dale expresses concerns about the limited number of players who won't qualify for "no-controversy checks."

"While the notion of seamless implementation for the vast majority sounds promising, the exclusion of a small number of players is troubling," Dale stated.

Reflecting on the broader implications of the new rules, Harvey commends the Commission's approach to the consultation process and subsequent integration.

"In 2024, confidence in the Commission is on the rise. Just a few years ago, consultations with the GC were viewed as futile; decisions were made unilaterally. But now, there's a different dynamic; we engage in negotiations," Harvey observed.

He credits Mr. Rhodes and Mr. Miller for their effective communication with stakeholders throughout the consultation process. "Not everyone will be entirely satisfied - that's inevitable - but I believe we've witnessed sound decisions based on real user data," Harvey concluded.

Strengthening Age Verification Measures at Land-Based Casinos

The forthcoming legislation will bolster age verification protocols for ground operators, mandating all land-based licensees to implement stringent age verification procedures.

Additionally, revisions to the code of best practice will require license holders to mandate staff to verify a customer's age if they appear to be under 25, rather than the previous threshold of 21.

Nigel Harvey expressed surprise at the number of failed age verification tests, emphasizing the necessity of these changes.

"I was taken aback to learn that 45% of age verification tests in categories A and B yielded unsuccessful results, with no claims raised against customers or operators. With such statistics, it's undeniable that changes were warranted. Whether they go far enough remains to be seen; evaluation will determine that, and time will tell," Harvey remarked.

Furthermore, the five significant changes will impact game design, prohibiting features such as autoplay and incentives to return an amount less than or equal to the gamer's bet.