UKGC Issues New VIP Scheme Guidance

The Gambling Commission has released new guidance for operators regarding VIP schemes. Most online operators run VIP schemes, which incentivize and reward frequent players. However, these practices have come under criticism over fears that they could encourage harmful gambling behavior. Under new rules, operators will face increased accountability for these schemes and will have to boost customer checks.

A croupier deals out cards at a fancy casino.

VIP schemes are offered by most online casinos to reward frequent players, however critics say that they could encourage harmful gambling behavior. ©Javon Swaby/Pexels

Increased Accountability

In response to calls from MPs and campaigners to crack down on VIP schemes, the UK’s gambling regulator has now announced strict new rules. The new guidance aims to improve customer protections, in particular when it comes to high value players. The guidance aims to wipe out irresponsible behavior from operators that incentivize high value customers to keep playing, even while showing signs of harm.

Evidence shows that some operators have been guilty of encouraging gamblers to spend and play beyond their means. The Gambling Commission also made efforts to combat the problem earlier this year, encouraging industry leaders to collaborate in solving the issue through an industry code of conduct.

With an extensive consultation completed, the regulator has now decided on a tough set of new rules, setting firm guidelines on what operators can and cant do with VIP schemes. However, despite criticism, the practice of VIP schemes, which reward high-spending customers with tailored bonuses, gifts and personalized customer service, will be allowed to continue.

The new rules, which will come into force from October 31st, will require operators to complete a number of checks before they can allow customers to join a VIP scheme. This includes ensuring that customers can afford their spending and that it is sustainable. Operators must also scrutinize whether customers are at risk of gambling related harm and whether they fall into a vulnerable category.

Another requirement on the regulator’s set of demands sees that operators should make sure that all evidence they have in regards to customer identity, occupation and source of funds should be up to date. They must also continue to check all information they are provided with and carry out regular gambling harm checks on customers.

The new guidance will add another new requirement for operators, in that they will now have to appoint a senior executive that holds a ‘personal management license’. This senior executive will oversee the operator’s VIP scheme, and will be personally accountable for it.

Chief executive of the Gambling Commission, Neil McArthur, explained that there have already been too many instances of misconduct in VIP schemes, and that the new guidance will offer operators a final opportunity to carry them out responsibly. McArthur continued:

“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.”

The strictness of the Gambling Commission’s new rules indicate that it really could be a ‘last chance saloon’ for operators if more cases of misconduct in VIP schemes are discovered. In fact, McArthur did not shy away from warning operators that such schemes could be banned outright. This year, the regulator has already toughened up rules around age and ID verification for online operators, as well as reinforcing customer interaction practices. At the beginning of the year, it also implemented a ban on gambling with credit cards.

BGC Backs New Rules

The regulator’s new guidelines come as a result of a two month long consultation looking at how operators interact with high spending customers. The Betting and Gaming Council and operator GVC led a working group, which came up with seven propositions. The regulator’s consultation reflected on these propositions, which ranged from practices in VIP schemes, game design and online advertising.

In the next few weeks the Gambling Commission will also be launching a consultation on customer interaction. This will take an in-depth look at how operators assess affordability and identify vulnerability. It will also consider both preventative and reactive action when signs of risk are exhibited in customers. The regulator is also due to issue a response on another consultation, which discussed safer online game design.

The Betting and Gaming Council has welcomed the Gambling Commission’s new guidelines on the use of VIP schemes. The industry body, which represents the UK’s casinos, online gaming sites and betting shops, praised the regulator’s initiative in a press release. Chief executive of the BGC, Michael Dugher, also took the opportunity to speak about the work it has undertaken to improve VIP accounts. He explained:

“The BGC, working with the Gambling Commission, has taken tough action on VIP accounts, including the introduction of a strict new code of conduct which has seen the number of players enrolled in them reduced by 70 per cent.”

As part of the BGC’s role in representing the industry it has pushed its members to adhere to a code of conduct, which stops players aged below 25 from being allowed to join VIP schemes. This code also means that to be considered for these schemes, customers must pass a series of checks carried out by the operator. Operators are prohibited from encouraging VIP players based on losses and senior management must oversee these schemes.

Earlier this week, the Betting and Gaming Council also tightened its advertising code. The ‘Sixth Industry Code for Socially Responsible Advertising’ is set to come into practice from October 1st, and will make sure that all online gambling ads are age restricted. These adverts will only be viewable to those who have already logged into age-verified social media accounts and will include safer gambling messaging.

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