The UK Gambling Commission (UKGC) has published new strict guidelines for licence holders aimed at stamping out malpractice in’ VIP ‘client management.
According to the UKGC, stamping out the ‘irresponsible incentivisation of high value customers’ has become a crucial area for reform since the regulator identified consumer safety failures.
Furthemore, as an area of urgent regulatory intervention, the House of Lords select committee on gambling harms had labelled industry VIP schemes, shielding vulnerable players.
Neil McArthur, chief executive of the Gambling Commission, 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.
“We understand that the number of customers signed up to ‘VIP’ schemes has already reduced by 70% since we challenged the industry to get its house in order, last year.
“Whilst that is a sign of the positive impact our innovative approach to collaborative working can have, these new rules are designed to ensure progress continues to be made to protect vulnerable customers.”
On these systems, operators would be obliged to obey the latest instructions. But from 31 October, prior to making a customer a VIP, each operator 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.
The new guidance also means operators will appoint a senior executive who holds a personal management licence (PMLs) to oversee their respective scheme – making individuals personally accountable.
McArthur concluded: “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.”
A two-month consultation that examined a series of potential steps that would improve the way operators communicate with high-value customers follows the new guidelines.
The consultation considered the seven recommendations made by the Betting and Gaming Council (BGC) and GVC Working Group, which are based on improving standards for VIP rewards, responsible product and game design, and online advertisement.
The BGC proposed an improvement of VIP schemes to be limited to consumers aged +25, endorsing a continued ‘collaborative approach’ with the Commission, and with all members promising to inspect their customer reward programmes entirely separately.