UKGC lays down the enforcement law

UKGC lays down the enforcement law

Monday, July 10, 2017
Commission’s new strategy backs up ‘consumer-first’ approach

The chief executive of the UK Gambling Commission has promised “tough action” against any licensed operators that fail to abide by the regulator’s own mission statement to put the consumer first after the Birmingham-based body unveiled its new enforcement strategy.

Sarah Harrison, who has been in the post for 18 months since joining from energy regulator Ofgem, said the Commission’s aim was to work with operators who “want to raise standards.”  

“This enforcement policy will set tougher sanctions for operators who repeatedly or systemically fail their customers,” she added. “Operators who persistently fail customers will face a hostile response from the regulator.”

The new strategy was prefigured in January this year when the Commission set out its proposals in a consultation document that received responses from eight industry bodies and 13 other interested parties.

The major change signalled in the final document is the current bias in favour of what the Commission terms as settlements over regulatory infringements is discarded and all regulatory outcomes, including reviews of both operator and personal management licences (PMLs), now take an equal footing.

While falling short of suggesting previous licensing censures had been too lenient, the Commission’s response in the consultation document does suggest that settlement had become “accepted and expected.”

“Its repeated use is not creating sufficient deterrent and so we want operators to be clear that when we are alerted to a breach the full range of enforcement tools will be considered,” the document states.

It continued that without the bias towards settlement it leaves the Commission with a “full range of enforcement options” from which it can chose the most appropriate path.

Legal sources point out that with the Competition and Markets Authority (CMA) investigation into terms and conditions still underway – and with a number of operators facing legal action according to the CMA’s most recent communication – and with 888 known to be undergoing a licensing review process, there is likely to be plenty of opportunity in the near future for the industry to witness the new enforcement process in action.

The consultation document says the Commission will act in a constructive manner as it wants an industry culture where “if something goes wrong, an operator recognises the consumer impact, quickly informs us, and swiftly implements an effective remedy, prioritising the interest of those affected.”

It is not surprising that the consultation document makes it plain there was some push back from the respondents on this issue. As one source suggested, this has all the hallmarks of the Commission adopting the collaborative approach of the Spanish inquisition.

More broadly, the document published yesterday was at pains to answer allegations that in stating its aim as “putting the consumer first”, the Commission was guilty of “regulatory creep.” The claim isn’t so much related to any new powers; instead it is raising the question as to whether the Commission’s remit extends to the consumer protection role it has assumed under Harrison’s leadership.

The consultation response points out, however, that there is “nothing new” about putting the consumer at the heart of the gambling regulatory system. It points out that the key Commission objectives of protecting the young and the vulnerable, ensuring gambling is conducted in a fair and open way and keeping the activity free from all crime all have a clear consumer focus “embedded” within them.

“However, a fast-changing gambling industry requires all of us to stay alert to changing consumer experiences, including new risks to the detriment of consumers,” the Commission states.

“Placing a greater emphasis on consumer interest ensures that both operators and regulator recognise and respond to these changing circumstances, whilst remaining consistent with the licensing objectives. It represents a far less radical approach than some respondents seem to suggest but we acknowledge that we could have been clearer in communicating how our approach relates back to the licensing objectives.”

Totally Gaming says: The position is yet to be tested in anger. As one other source suggested “fines are not an existential threat” for any operators but a licensing action – whether a temporary suspension for the operator or anything similar for a PML holder – has the potential to be much more damaging. Legal action will doubtless follow should any operator believe the Commission is acting beyond the bounds of its statutory role.

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