National Strategic Assessment 2020
Product innovation - Betting Exchanges, Pool betting and Crossover products
Innovation in product design with a clear focus on the licensing objectives, helps an industry embrace new technologies and adapt to societal changes to the beneﬁt of consumers. Some product innovation has not given due consideration to the possible impact on the licensing objectives.
Betting Exchanges pose different risks due to their peer to peer nature. This year has seen increased regulatory activity related to betting exchanges, an area of growing complexity as operators expand the breadth of markets available and the jurisdictions from which they draw their customers. This creates inherent challenges of matching customers who may be operating under different regulatory requirements.
There is no ambiguity in respect of the standards we expect to be applied to any bet struck under an operating licence issued by the Commission. Licensees must comply fully with requirements of the Gambling Act and the Licence Conditions and Codes of Practice including Social Responsibility and Anti Money Laundering (AML) provisions.
Operators of betting exchanges must apply critical risk-based thinking in advance to address these challenges – assuming something good enough for one regulator will be acceptable to another is ﬂawed and is not likely to withstand scrutiny where there is reason to believe inferior standards are being applied instead of British requirements.
Efforts to reinvigorate pool betting products with notional co-mingling have also combined with the increasingly globalised gambling market. Whilst product innovation can beneﬁt consumers, licensees need to ensure that products are licensed and operate transparently, and our standards of consumer protection are reﬂected in any international commercial arrangements.
Another area of product innovation that we continue to scrutinise are new business models which risk blurring the lines between betting regulated by us, and spread-betting or other instruments regulated by the FCA.
We will continue to:
- engage with DCMS to provide advice on the resources required to regulate effectively.
- understand new technologies.
- improve our understanding of new products, delivery mechanisms and payment methods.
What are the issues - Higher risk products Next section
What are the issues - Gaming machines in premises