Guidance
Guidance to licensing authorities
The Gambling Commission's guidance for licensing authorities.
Contents
- Changes to the Guidance for Licensing Authorities
- Part 1: General guidance on the role and responsibilities of licensing authorities in gambling regulation
- - Introduction
- - Partnership working between the Commission and licensing authorities – shared regulation
- - Co-ordination and contact
- - Primary legislation
- - Statutory aim to permit gambling
- - The licensing objectives
- - Codes of practice
- - Licensing authority discretion (s.153 of the Act)
- - Local risk assessments
- - Licensing authority policy statement
- - Limits on licensing authority discretion
- - Other powers
- Part 2: The licensing framework
- - Introduction
- - Operating licences
- - How operating licences are granted
- - Operating licence conditions and codes
- - Personal licences
- - Premises licences
- Part 3: The Gambling Commission
- - Introduction
- - Main functions of the Commission
- - Relationship between the Commission and licensing authorities
- Part 4: Licensing authorities
- Part 5: Principles to be applied by licensing authorities
- - Licensing objectives
- - Section 153 principles
- - Codes of practice
- - Good practice in regulation
- - Human Rights Act 1998
- - Other considerations
- Part 6: Licensing authority policy statement
- - Introduction
- - Fundamental principles
- - Form and content
- - Other matters to be considered
- - Local risk assessments
- - Local area profile
- - Declaration by licensing authority
- - Consultation
- - Reviewing and updating the policy statement
- - Advertisement and publication
- - Additional information to be made available
- Part 7: Premises licences
- - Introduction
- - Premises
- - Access to premises
- - Multiple activity premises – layout and access
- - Applications
- - Application for premises variation (s.187): ‘material change’
- - Consideration of planning permission and building regulations
- Part 8: Responsible authorities and interested parties definitions
- Part 9: Premises licence conditions
- - Introduction
- - Conditions and authorisations by virtue of the Act
- - Conditions attached through regulations made by the Secretary of State or Scottish Ministers – all premises
- - Conditions that may not be attached to premises licences by licensing authorities
- Part 10: Review of premises licence by licensing authority
- - Introduction
- - Initiation of review by licensing authority
- - Application for a review
- - Carrying out a review
- Part 11: Provisional statements
- Part 12: Rights of appeal and judicial review
- Part 13: Information exchange
- - Underlying principles
- - Information licensing authorities provide to the Commission
- - Other licensing authority information requirements
- Part 14: Temporary use notices
- Part 15: Occasional use notices
- Part 16: Gaming machines
- - Introduction
- - Categories of gaming machine
- - Age restrictions
- - Maximum number of machines by premises type
- - Multiple activity premises
- - The meaning of ‘available for use’
- - Machines other than gaming machines in gambling premises
- Part 17: Casinos
- - Casino premises
- - Casino games
- - Protection of children and young persons
- - The process for issuing casino premises licences
- - Resolutions not to issue casino licences
- - Converted casinos (with preserved rights under Schedule 18 of the Act)
- - Casino premises licence conditions
- - Mandatory conditions – small casino premises licences
- - Mandatory conditions – converted casino premises licences
- - Default conditions attaching to all casino premises licences
- - Self-exclusion
- Part 18: Bingo
- - Introduction
- - Protection of children and young persons
- - Gaming machines
- - Self-exclusion
- - Bingo in clubs and alcohol-licensed premises
- - Bingo premises licence conditions
- Part 19: Betting premises
- - Introduction
- - Protection of children and young persons
- - Gaming machines
- - Self-exclusion
- - Self-service betting terminals (SSBTs)
- - Betting premises licence conditions
- - Industry codes
- Part 20: Tracks
- - Definition of a track
- - Track premises licences – differences from other premises licences
- - Betting on tracks
- - Licences and other permissions for the provision of betting facilities
- - Betting on event and non-event days
- - Social responsibility considerations for tracks
- - Gaming machines
- - Self-service betting terminals (SSBTs)
- - Applications
- - Licence conditions and requirements
- Part 21: Adult gaming centres
- - Introduction
- - Protection of children and young persons
- - Self-exclusion
- - Gaming machines
- - AGC premises licence conditions
- Part 22: Licensed family entertainment centres
- - Introduction
- - Protection of children and young persons
- - Meaning of premises
- - Licensed FEC premises licence conditions
- Part 23: Introduction to permits
- Part 24: Unlicensed family entertainment centres
- - Introduction
- - Applying for a permit
- - Granting or refusing a permit
- - Lapse, surrender and forfeiture
- - Renewal
- - Maintenance
- Part 25: Clubs
- - Defining clubs
- - Bingo in clubs
- - Betting in clubs
- - Exempt gaming
- - Protection of children and young persons
- - Permits
- - Appeals
- Part 26: Premises licensed to sell alcohol
- - Introduction
- - Automatic entitlement to two machines
- - Licensed premises gaming machine permits
- - Exempt gaming
- - Bingo
- - Betting
- - Commission codes of practice
- - Scotland
- - Protection of children and young persons
- - Prohibited gaming
- Part 27: Prize gaming and prize gaming permits
- Part 28: Non-commercial and private gaming, betting and lotteries
- - Introduction
- - Non-commercial gaming
- - Private gaming
- - Private betting
- - Incidental lotteries
- - Non-commercial ‘casino night’
- - Non-commercial race night
- Part 29: Poker
- - Introduction
- - Poker in casinos
- - Poker as exempt gaming in clubs and alcohol licensed premises
- - Poker as non-commercial gaming
- - Poker as private gaming
- - Advertising
- Part 30: Travelling fairs
- Part 31: Crown immunity and excluded premises
- Part 32: Territorial application of the Gambling Act 2005
- Part 33: Door supervision
- Part 34: Small society lotteries
- - Small society lotteries
- - The status of lotteries under the Act
- - Licensing authority guidance
- - Social responsibility
- - External lottery managers’ licence status
- - Lottery tickets
- - Prizes
- - Specific offences in relation to lotteries
- - Application and registration process for small society lotteries
- - Administration and returns
- Part 35: Chain gift schemes
- Part 36: Compliance and enforcement matters
- - Fees
- - Enforcement officers and authorised persons
- - Powers of entry – England and Wales
- - Powers of entry in Scotland
- - Illegal gambling
- - Test purchasing and age verification
- - Primary Authority
- - Prosecutions
- - Other powers
- - Case law, templates and case studies
- Appendix A: Summary of machine provisions by premises
- Appendix B: Summary of gaming machine categories and entitlements
- Appendix C: Summary of gaming entitlements for clubs and alcohol-licensed premises
- Appendix D: Summary of offences under the Gambling Act 2005
- Appendix E: Summary of statutory application forms and notices
- Appendix F: Inspection powers
- Appendix G: Licensing authority delegations
- Appendix H: Poker games and prizes
- Appendix I: Glossary of terms
2 - Triggers and customer affordability
Customer protection has continued to be a priority for the Commission and consideration of affordability should be a significant driving factor in customer risk assessments.
Considering affordability is of significant importance to protecting consumers we are consulting on introducing new requirements as part of a strengthened approach to customer interaction. Operators should learn the lessons contained in this report as well as preparing for any new requirements that may emerge from our consultation. Twelve months ago, we recommended that operators reassess their framework on triggers to consider their customer base and individual customer’s disposable income levels as a starting point for setting benchmark triggers.
The intention behind this was to ensure vulnerable customers were identified as early as possible and interacted with appropriately. Despite this recommendation, the compliance and enforcement teams have continued to review cases where, in the last twelve months, individuals have demonstrated gambling-related harm indicators and still been able to continue to gamble without effective engagement.
Furthermore, these individuals have funded their gambling without satisfactory affordability checks and appropriate evidence being obtained. Casework and compliance assessments which resulted in action being taken by the Commission, have shown:
- An online operator permitting a customer to deposit, and lose, £187,000 in two days. This was despite the customer having no regular source of income and funding play from inheritance money or redeposited winnings.
- An operator not conducting checks to establish a customer’s source of funds as they had not yet hit any triggers.
- A land-based casino customer who lost £18,000 in one year despite having told staff her savings had been spent and that was she was reliant on borrowing funds from family and her overdraft facility to fund her gambling.
- A retired land-based casino customer being able to lose £15,000 in 44 days which they could not afford.
Open source data that can help operators assess affordability for GB customers and improve its risk assessment and customer interventions has not notably changed since last year’s enforcement report (opens in a new tab).
According to the office for National Statistics Annual Survey of Hours and Earnings:
- Median gross weekly earnings for full-time employees in the UK has increased 6.4% to £585 from £550 (2019 provisional and 2018 revised results and 2017 provisional and 2016 finalised)
- The occupation group with the highest median weekly earnings for full time employees is still managers, directors and senior officials for which median gross weekly earnings has increased 4.6% to £862 from £824 (2019 provisional and 2018 revised results and 2017 provisional and 2016 finalised).
Based on the above, 50% of the full-time employees in the UK receive less than £30,500 gross earning per year and 50% of the full-time managers, directors and senior officials in the UK receive less than £45,000 gross earnings. These earnings are what is received before expenses such as income tax, national insurance, mortgage/rent payments, telephony contracts, travel costs, food and utilities are paid for. We would expect such expenses to be considered in affordability frameworks so the starting point adequately reflects the true level of available disposable income for that individual.
Open source information is an important element of an affordability framework because it is a parameter to consider when setting benchmark triggers that will drive early engagement with customers. Officials are aware of affordability frameworks being considered by operators, but they are not being implemented at pace despite our guidance and advice.
We are concerned licensees are creating complex and convoluted matrices and mappings within their affordability framework to place customers into trigger groups well over the gross earnings stated above, before disposable income is factored in. Of more concern, these trigger groups are set without any sort of customer interaction to influence their true affordability determination. Operators must interact with customers early on to set adequate, informed affordability triggers to protect customers from gambling related harm. Failure to do so could render the operator non-compliant.
Customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three months’ payslips, P60s, tax returns or bank statements which will both inform the affordability level the customer may believe appropriate with objective evidence whilst enabling the licensee to have better insight into the source of those funds and whether they are legitimate or not.
We appreciate that operators have established customer bases and these customers will either be in a loss position or a profit position with the operator. For customers in the loss position a sensible approach would be to assign the customers a national average affordability trigger, irrespective of historical deposits and withdrawals, and move these customers to higher affordability triggers once appropriate affordability evidence is received.
For customers in a profit position, operators may have adopted a framework which allows triggers to be moved up from the national average without affordability evidence as their winnings are evidence of what these customers can afford. With this type of customer, we would expect an operator to still be considering affordability whilst also monitoring the customers play activities to be satisfied that they are not exhibiting signs of gambling-related harm. This especially applies to large one-off winners such as jackpot winners.
If winning customers are not being asked for affordability evidence but are withdrawing and redepositing funds, we consider checks are required to mitigate any Social Responsibility or Money Laundering risks as customers could be misappropriating funds and re-depositing fresh criminal spend the operator mistakenly believes are previous winnings.
Operators need to consider this and obtain evidence when appropriate to satisfy themselves that this is not the case.
At the time of writing this report, the long term financial impact of the COVID-19 crisis is yet to be fully understood, although initial data analysis (opens in a new tab) published by the Commission indicated that 40% of people saw a decrease in their disposable income. This was occurring whilst 20% of the population reported a decrease to their mental health and during lockdown may have sought additional forms of entertainment, or to replace betting activity no longer available such as on live sports.
In response to evidence showing some gamblers maybe at greater risk of harm during lockdown, the Commission published new guidance for online operators to help reduce the risk of harm in these unprecedented circumstances. The guidance clearly sets out that we expect operators to:
- Urgently review their thresholds and triggers to reflect the change in circumstances, adopting a precautionary approach.
- Keep under review duration of play for customers which can be an indicator of harm and keep this under review to identify changes which warrant intervention.
- Conduct effective affordability checks during the life of the customer relationship but particularly during this crisis.
- Prevent reverse withdrawals which has been linked to problem gambling behaviours and harm.
- Restrict bonus offers to those displaying indicators of harm.
The Commission recommended operators urgently, given the impact of COVID-19, revisit their framework on triggers and consider their customer base and their disposable income levels as a starting point for benchmark and affordability triggers, building upwards, to ensure vulnerable customers are identified as early as possible and interacted with appropriately. Knowing and identifying customers at risk of or experiencing harm and acting early and quickly could help stop or prevent any harm worsening. The Commission continues to monitor the impact of COVID-19.
Last updated: 24 April 2023
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