The UK Gambling Commission (UKGC) has released new strict guidance for licence holders which will aim to stamp out malpractice in the management of ‘VIP’ customers.
Stamping out the ‘irresponsible incentivisation of high value customers’ has become a key area for change, according to the UKGC, after the regulator reported failings in customer protection.
Furthemore, The House of Lords select committee on gambling harms had marked industry VIP Schemes as an area of immediate regulatory action to protect vulnerable players.
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.
“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.”
Operators will be obliged to follow the new guidance on these schemes. But prior to making a customer a VIP, from 31 October, 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.”
The new guidelines follow on from a two-month consultation which analysed a series of proposed measures which would change the way that operators interact with high-value customers.
The consultation considered the seven propositions made by a working group led by the Betting and Gaming Council (BGC) and GVC, which is focused upon improving standards relating to VIP incentives, responsible product and game design and online advertising.
Backing a continued ‘collaborative approach’ with the Commission, the BGC recommended an overhaul of VIP Schemes to be restricted to customers aged +25, and with all members agreeing to fully independently audit their customer reward programmes.