The Gambling Commission of Great Britain recently issued a strict set of new guidelines in an effort to further tackle the issue of "malpractice" in the management of VIP customer schemes by gambling operators.

The Gambling Commission first challenged the industry to get its house in order in respect of so-called VIP schemes last year, and despite claims that the overall number of customers signed up to such schemes has since dropped by up to 70%, the regulator still wants to do more to confront the issue.

The Commission made addressing these schemes a priority after finding repeated instances of failure to protect 'high value customers' (HVCs) by operators. HVCs - who represent a heightened risk due to their high levels of engagement by frequency, spend, or both - are often provided with tailored bonuses, gifts, hospitality and other preferential services as a means of maintaining (and increasing) their gambling custom.

Risk Assessment

The Licence Conditions and Codes of Practice (LCCPs) place a core responsibility on all licensees to assess the risks of incentivising HVCs (SRCP 5.1.1(2)), but the Commission's new guidance now sets out a more comprehensive set of minimum standards operators will need to meet to be able to offer HVC incentive schemes.

Whilst there is no hard definition of what constitutes a HVC for the purpose of the guidance, it does specify that these are customers "identified as being of enough commercial value to warrant enhanced customer service unavailable to the wider customer base".  

Which is a broad, "you'll know it when you see it" approach.

The guidance goes on to set out that, before any operator makes a customer a VIP, as of 31 October it must:

  • Establish that spending is affordable and sustainable as part of the VIP 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.

Issues to consider

When assessing the vulnerability of a HVC, at a minimum, licensees should consider the following issues as part of any safer gambling assessment criteria: 

  1. Personal - would include where an individual is experiencing poor physical or mental health, physical or cognitive impairment, suffering side effects from injury, medication or addiction.

  2. Situational - would include where an individual is experiencing financial difficulties, is suffering from domestic or financial abuse, has caring responsibilities, experiences a life change or sudden change in circumstances.

  3. Behavioural - would include where an individual has a higher than standard level of trust or high appetite for risk.

The new guidance also means operators will need to appoint a senior executive who holds a personal management licence (PMLs) to oversee the relevant scheme - making those individuals personally accountable.

You can access the full guidance note published by the Gambling Commission here.