Compliance Updates
UK Gambling Commission Amends Requirements of Social Responsibility Code on Customer Interactions
The UK Gambling Commission (UKGC) has issued an update on the introduction of its new remote customer interaction requirements and guidance. The regulator has also advised gambling operators to consider the contents of the announcement, as the body has now shifted the date on which some requirements will come into force and a consultation has been announced.
In April this year, UKGC published a set of new requirements to ensure companies do more to identify customers at risk of harm – Social Responsibility Code Provision 3.4.3 – and guidance to assist operators to comply with the requisites followed in June. Both the requirements and the guidance were due to take effect on September 12.
While the regulator notes the industry requested an extension to the timeframe for implementing these requirements – due to the technical challenges some companies indicated they are facing in delivering full compliance by the deadline – it has now decided that the majority of the new requirements will still come into force as planned, on September 12.
“Remote gambling operators are already subject to a duty to conduct effective customer interaction, and the new requirements reflect the minimum steps that we consider are necessary to meet that duty,” UKGC noted. However, the UKGC has also decided that certain requirements will not be brought into effect in September.
These now excluded provisions include a requirement to take timely action where indicators of vulnerability are identified and to take account of the Commission’s approach to vulnerability as set out in the UKGC’s guidance; and a requirement to prevent marketing and the take-up of new bonus offers where there are strong indicators of harm.
“In light of this extension, the Commission considers that it would be beneficial to use the time now available to conduct further consultation on matters to be addressed in the guidance associated with SR Code 3.4.3, by way of a consultation on the guidance document itself. Therefore, the requirement to take into account the Commission’s guidance on customer interaction for remote operators will also not be brought into effect in September,” UKGC said.
The UK gambling regulator said the guidance is “a living document” that is intended to be amended over time. As part of the consultation, the body will be “particularly interested” to hear about good practice in implementing the requirements, “based on the lessons learned by operators” during the period between April and September, and to hear about “any implications arising out of recent research, evidence and casework.”
“Consultation is likely to be launched during late September and will last six weeks. All views expressed in response to this six-week consultation will be carefully considered before a decision is taken on the contents of the guidance on the new requirements,” UKGC said.
Subject to consultation, the Commission’s provisional intention is to publish the guidance on the requirements “in December 2022,” with it taking effect approximately 2 months after publication.
“In the circumstances, we consider this will allow the industry a reasonable period to consider the guidance before it takes effect,” the Gambling Commission noted.
“It is the Commission’s intention, subject to consultation, to bring the remaining requirements of SR Code 3.4.3 and the associated guidance into effect on February 12, 2023,” UKGC concluded.
Balkans
Bulgarian National Revenue Agency, the State Agency for National Security and the Gambling Operators Join Forces Against Money Laundering and Terrorist Financing
The Bulgarian National Revenue Agency, the Specialised Administrative Directorate “Financial Intelligence” of the State Agency for National Security and branch organisations of the organisers of gambling operators will join efforts against money laundering and the financing of terrorism. This became clear during a working meeting, which took place on March 20 at the invitation of the Director General of the National Revenue Agency Rumen Spetsov, and his deputy Georgy Dimov.
The participants discussed the possibilities for the branch organisations of gambling operators to monitor the implementation of measures against money laundering and the financing of terrorism by their members. The talks also discussed changes in normative and sub-normative acts regulating the activity in the sector, which would lead to better accountability and guaranteed protection of the public interest.
During the meeting, it was decided that representatives of the National Revenue Agency would discuss with the branch gambling organisations issues related to the implementation of normative and sub-normative acts, providing guidelines for the correct fulfilment of obligations by gambling operators.
“The National Revenue Agency is partner-oriented and is available to assist businesses in fulfilling their obligations by the current legislation. We highly value the commitment of industry gambling organizations in the prevention and effective fight against money laundering and terrorist financing,” said Rumen Spetsov – Director General of the National Revenue Agency.
Australia
Crown Approved to Retain its Melbourne Licence
The Victorian Gambling and Casino Control Commission (VGCCC) has ruled Australian casino giant Crown Resorts can keep its Crown Melbourne casino licence.
The full Commission decided that Crown Melbourne has addressed the failings identified by the 2021 Royal Commission into the Casino Operator and Licence.
Commission Chair Fran Thorn said that the Royal Commission detailed how Crown Melbourne had breached its legal, social and moral obligations, resulting in illegal activities, tax avoidance, money laundering, criminal associations and significant harm to vulnerable community members, ultimately finding Crown Melbourne unsuitable to hold the Melbourne Casino Licence.
“Despite the enormity of its findings, the Finkelstein Royal Commission recommended Crown be permitted to continue operating under stringent independent oversight conditions for two years, determining it had the will and capacity to transform itself to again become suitable, which would be to Victoria’s benefit,” she said.
The Victorian Government responded decisively to the Royal Commission’s findings, appointing a Special Manager to oversee Crown Melbourne’s operations and remediation. It also established the VGCCC as a new regulator focussed solely on the gambling industry and created a specific set of enhanced powers with respect to the Melbourne casino.
The Commission was given the responsibility of deciding whether it was clearly satisfied that Crown Melbourne had returned to suitability and whether the Melbourne Casino Licence remained in the public interest. In making its independent determination, the Commission carefully considered the reports of the Royal Commission and other relevant inquiries, the reports of the Special Manager. Those reports considered the steps Crown Melbourne had taken to address the matters identified by the Royal Commission and the measures to ensure they would not be repeated.
Commissioner Thorn said the Special Manager’s final report concluded that Crown Melbourne has remediated the failings exposed in the Royal Commission and established the critical foundations needed to achieve sustainable overall transformation in coming years.
“There was no evidence of maladministration or illegal or improper conduct indicative of the serious and systemic failures previously identified by the Royal Commission, and these failings had been addressed,” she said.
Commissioner Thorn said that Crown Melbourne had demonstrated to the satisfaction of both the Commission and the Special Manager that it had introduced extensive reforms to prevent or reduce gambling harm, financial crime and money laundering. It has also addressed systemic risk management failures and strengthened its integrity framework.
“During our investigations, we observed a different Crown Melbourne emerging with a clear understanding of the privilege and obligations of holding the Melbourne Casino Licence,” she said.
The Commission’s decision was also supported by Crown Melbourne’s comprehensive transformation plan, required by the Special Manager, against which it will continue to be held accountable going forward.
“That transformation plan will be at the heart of our oversight, along with Crown’s legal and social obligations, and provides the next level standard for Crown Melbourne. The Commission will require Crown Melbourne to deliver further transformation through a statutory direction that will be issued shortly,” she said.
Along with the VGCCC’s strengthened oversight regime and enforcement powers, the VGCCC has established a new, specialist Casino Division providing confidence that Crown Melbourne will be held stringently accountable in the future, including for its ongoing transformation.
Commissioner Thorn said: “In return for the privilege of an exclusive licence, Victorians have a right to expect that Crown Melbourne will never again prioritise profit ahead of the safety and wellbeing of its patrons and staff or over compliance with its legal and social obligations.
“Crown Melbourne must continue to seek to rebuild and earn public trust by demonstrating the good character, honesty and integrity that are necessary to remain a suitable casino operator. We put Crown on notice that this Commission will not hesitate to act if the privilege of holding the casino licence is again abused.”
Balkans
In Montenegro, a Controversial Law Challenging the Fintech Future Prompts Legal Experts to React
Montenegro’s evolving digital landscape has been facing a significant hurdle with the introduction of Article 68f of the Gambling Law since the beginning of 2024. Legal experts, spearheaded by the prestigious law firm Schoenherr, have also raised concerns over the provision’s controversial nature and reminded on the constant scrutiny of the market participants regarding the risks to of the Article 68f to stifle not only the gaming industry but also jeopardize the expansion of Montenegro’s fintech sector.
Schoenherr’s Legal Scrutiny of Article 68f
The amendment, aimed at regulating online betting transactions, restricts funding the online accounts payments to cash in physical premises or through traditional payment cards, excluding a wide array of digital banking – e-banking and mobile banking solutions.
Delving into the entire problematic of Montenegro’s subject legal landscape, Schoenherr has conducted a thorough examination of the recent amendments to the Gambling Law, with a keen focus on the widely debated Article 68f. They reminded on a significant concern from market participants as well as on their massive response, in light of petition with over 25,000 signatures gathered and various legal initiatives initiated aimed at its repeal and constitutional review. Schoenherr underscored the depth of the controversy surrounding the new legislative measures and their impact on the online gaming sector in Montenegro.
Industry and Public Backlash
The introduction of Article 68f has not gone unnoticed by the market’s stakeholders, eliciting a strong response from gaming organizers who view the measure as unjustified and potentially illegal. A significant mobilization effort led to the initiation of a petition that garnered over 25,000 signatures, demonstrating widespread opposition to the law. This public outcry resulted in formal initiatives being submitted to both the Montenegrin Parliament and the Constitutional Court to challenge the provision’s legality and constitutionality.
Awaiting a Resolution
As the legal and public spheres await the competent authorities’ decision on these initiatives, the uncertainty surrounding Article 68f raises pressing questions about the future of digital innovation and consumer rights in Montenegro. The law firm’s analysis highlights a pivotal moment for the country, as it grapples with balancing regulatory objectives with the need to foster a competitive and inclusive digital economy.
The Broader Implications for Montenegro’s Fintech Industry
Beyond the immediate concerns for the gaming sector, the law’s restrictions on digital payment methods signal a potential setback for Montenegro’s fintech ambitions. In an era where digital financial services play a critical role in economic development, restrictive measures like Article 68f could deter innovation and investment in this crucial sector. The legal analysis by Schoenherr serves as another alarm-bell-call for a reevaluation of the law, urging policymakers to consider the long-term impacts on the country’s digital and financial landscape.
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