Operators Are in Last Chance Saloon Over VIP Schemes

The Gambling Commission has warned operators that they have a last chance to comply with High-Value Customer rules. The regulator has set a deadline of 31 October for compliance.

UK Licensed operators have been given a “last chance” by the Gambling Commission (UKGC) to comply with new rules relating to VIP customers. The regulator has set a deadline of 31 October for companies to comply with regulations that are in place to tackle malpractice across VIP schemes.

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Operators in Last Chance Saloon Over VIP Schemes © Pixabay.

The schemes that target high-spending individuals offer incentives that are not available to regular customers, have attracted the attention of the regulator. High-profile cases in which VIP schemes have been involved have sometimes led to tragic instances or been used to launder money.

The regulator, however, has taken the somewhat surprising decision not to ban these schemes, preferring to introduce new rules which the UKGC state operators must follow or risk prosecution or even the suspension of an operating licence.

The UKGC state that these rules have been introduced to strengthen consumer protection with the regulator stating that these schemes had repeatedly failed to protect high-value customers. The Commission in revealing this code of conduct said this was an area they had identified that needed change and earlier in the year they had pushed for the industry to work together to find best working practice. However, by realising this guidance, it appears the regulator wasn’t satisfied with self-regulation so introduced rules which must be followed.

On the UKGC website the regulator states, they have conducted extensive consultation. They have issued new guidance on VIP schemes which see ‘high value’ consumers provided with tailored bonuses, gifts, hospitality and preferential service from an operator designed to maintain or increase their custom.

The rules state that before any operator makes a customer a VIP, from 31 October it must:

  • Establish that spending is affordable and sustainable as part of the customer’s leisure spend
  • Assess whether there is evidence of gambling-related harm or heightened risk linked to vulnerability
  • Ensure the licensee has up to date evidence relating to identity, occupation and source of funds, and;
  • Continue to verify the information provided to them and conduct ongoing gambling harm checks on each individual to spot any signs of harm.

Neil McArthur, Gambling Commission chief executive, said:

We have introduced these new rules to stamp out malpractice in the management of ‘VIP’ customers and to make gambling safer. Our enforcement work has identified too many cases of misconduct in the management of VIP schemes, and this is the last chance for operators to show they can operate such schemes appropriately. Neil McArthur, UKGC chief executive.

While McArthur’s comments made it clear that time was running out for operators to comply with the new rules, he did acknowledge that since the Commission had challenged the industry to “get its house in order”, the number of customers in VIP schemes had fallen by 70%. McArthur did assert, however, that these new rules are designed to ensure progress continues to be made to protect vulnerable customers.

McArthur ended the statement saying: “Operators can be in no doubt about our expectations. If significant improvements are not made, we will have no choice but to take further action and ban such schemes. These new rules are part of the Commission’s comprehensive programme of tougher enforcement and compliance activity which has also seen the introduction strengthened protections around online age and ID verification, improved customer interaction practices, and the banning of gambling on credit cards.”

The Commission state that in the coming weeks they will be launching a consultation on customer interaction in which they will focus affordability, identifying vulnerability and how to take early preventive and reactive action. The UKGC is also involved in a consultation on game design.

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