UK Gambling Commission to consult on KYC and age verification

On 26 March 2018 the UK Gambling Commission published its Review of Online Gambling ("Review") and announced that it would shortly be issuing a number of consultations in the sector. Heston Aniteye explains the areas of consideration and the potential implications.


The Review is part of the Commission’s drive to raise standards across all gambling sectors, as outlined in its Corporate Business Plan for 2017/2018.  The Commission cited the fact that progress to minimise harm across the online gambling industry had been slower than it had expected and outlined four key policy recommendations to enhance the regulatory framework for online gambling.

Online gambling operators will therefore need to consider the impact of these policy recommendations, in particular the extent that compliance with new proposed obligations may impact their business operations day to day.

Policy considerations and further work

The Commission announced that it would consult on the following amendments to the Licence Conditions and Codes of Practice (“LCCP“):

  • Age verification – whether to introduce a new LCCP requirement for age verification on all consumers before they deposit money and also before they play free games;
  • Customer identification – whether to introduce (a) a new LCCP requirement for customer due diligence; and (b) mandatory account limits until operators had verified the identity of their customers;
  • Unfair terms advice – a consultation is already underway regarding amendments to the LCCP amid concerns about widespread instances of unfair terms and practices in terms and conditions. The Commission will continue to work to raise standards in this area; and
  • Customer interaction – the effectiveness of the existing customer services interaction controls, in particular how these could be modified to help identify those at risk of gambling related harm.

The Commission also announced five areas where it would be undertaking further work before determining whether to consult:

  • assessing the effectiveness of consumer protections to enable them to maintain control of their gambling;
  • reviewing game and product characteristics to determine the features that pose the greatest risk of harm;
  • reviewing the requirements on the protection of consumer funds and dormant accounts;
  • considering whether gambling on credit should be permitted; and
  • considering whether to make changes to LCCP to enable consumers to withdraw funds more easily.

Where does this leave online gambling operators?

The direction of travel for regulation outlined in the Review has given online gambling operators plenty more food for thought on the back of a sustained period of tightening regulation and stronger enforcement. In particular, the potential requirements for customer identification at an earlier stage, which may put off legitimate customers, are likely to have the most material impact on their operations and bottom line.

The existing regulations broadly provide operators with 72 hours to carry out age verification checks, enabling a consumer to register an account and deposit funds for gambling before verification. However, the policy considerations outlined in the Review in support of more stringent age verification mechanisms concluded that it was not necessary to provide operators with 72 hours to complete age verification, favouring a requirement for age verification for all consumers before they are able to deposit money and gamble. Further, the Review also concluded that play-for-free games encourage young people to enter into the gambling market.

The Commission took the view that operators generally do not know enough about their customers in order to assess whether they were gambling in excess of their means or involved in criminal activity. The burden of resolving these issues therefore looks to be falling squarely on the shoulders of the operators.

Going forwards, it will be important for online gambling operators to carefully consider the potential measures that could be implemented to effect these recommendations. By scoping out solutions appropriate to their business, operators can work to engage constructively with the consultation process to shape the nature of future regulation in the sector.

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