The United Kingdom Gambling Commission have released what they’re referring to as ‘strict new guidance’ for the way in which operators will have to handle VIP customer schemes moving forward. The debate around VIP schemes has raged for some time, with critics suggesting that it encourages gambling problems. Now the UKGC has finally confirmed that it is looking to stamp down on the abuse of VIP schemes in the future.
The key takeaway from the Gambling Commission’s announcement is that each company will need to have a specific person who is personally liable when it comes to VIP schemes. There are other things that must happen from the thirty-first of October 2020, including establishing that the customer can afford any spending linked to their promotion to a VIP account. It’s all in the aim of removing malpractice when it comes to managing VIP customers.
A Brief Look At VIP Schemes
In the world of gambling, those that spend large amounts of money on a regular basis are often upgraded to VIP accounts. Different gambling firms have their own ways of making punters feel important, though common things offered to them are the likes of gifts, bonuses and hospitality packages. The special treatment afforded to these clients is designed to keep them gambling and spending large amounts of money in order to ensure that they don’t miss out on such things.
The major criticism of such schemes is that they encourage people to gamble more than they can afford to lose, doing so in order to keep receiving such gifts and special treatment. VIP schemes are only made available to big-spending clients, with betting companies realising that this is where much of their income comes. It therefore regularly leads to problem gambling and the schemes have often been cited in regulatory sanctions on companies failing to prevent that from happening.
What The New Rules Say
The Gambling Commission launched a consultation around VIP schemes for gamblers, asking punters what changes they would like to see when it comes to how ‘high-value’ customers are treated. The conclusion of that consultation has led the UKGC to introduce new rules and regulations around the issue, which is being seen by many as something of a last chance saloon for the gambling industry to get its house in order before legislation is introduced on the matter.
All betting operators will need to follow the new guidance from the Gambling Commission when it comes to VIP schemes. The main things that companies will need to do are establish that the customer can afford their high spending, assess whether gambling related harm is likely, make sure that the bettors’ identity, source of funds and occupation are all up to date and also continually verify it all at the same times as running regular checks to prevent gambling problems.
A senior executive will also need to be appointed at every company, with that person needing to hold a Personal Management Licence. They will be responsible for overseeing the VIP schemes and will be personally accountable if gambling companies don’t do what they’ve been asked to around the issue. The key point is that such VIP schemes will need to be far more transparent, with everyone aware of what is being offered to whom and why as we move forward.
BGC Welcomes Changes
The Betting & Gaming Council, which is the standards body for the gambling industry, has welcomes the new guidelines that the UKGC has issued. It will result in the number of people enrolled in such VIP schemes drop by around seventy percent, which, it is hoped, will result in far fewer people developing gambling problems because of the programmes. Michael Dugher, the Chief Executive of the BGC, believes it shows the industry’s desire to improve.
He said, “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. The code restricts anyone aged under 25 from taking part, while any customer considered for a VIP reward programme must first pass rigorous safer gambling checks and be subject to ongoing checks on their betting behaviour.”
Dugher also spoke about the requirement for the programmes to be ‘overseen by senior management’ as well as pointing out that ‘operators are also banned from incentivising customers based on losses’. This, he feels, is ‘further evidence of our commitment to driving up standards within our industry’. Obviously the proof is in the pudding with such things, so it will be interesting to see if betting companies now face fewer fines around the issue.
The Logic Behind VIP Scheme Changes
Whilst many in the betting industry have been critical of such VIP schemes for a number of years, the Gambling Commission has been slow in reacting to them and doing something about it. The Chief Executive of the UKGC, Neil McArthur, has said that gambling operators ‘can be in no doubt’ about what the Commission expects from them around this area in the future. He also made the point that the industry has one final chance to ‘get its house in order’.
McArthur said, “We have introduced these new rules to stamp out malpractice in the management of ‘VIP’ customers and to make gambling safer. Our enforcement work has identified too many cases of misconduct in the management of VIP schemes and this is the last chance for operators to show they can operate such schemes appropriately…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.”
McArthur was also quick to point out that this really is the last chance for companies to sort out the way these schemes operate. He said, “If significant improvements are not made, we will have no choice but to take further action and ban such schemes. These new rules are part of the Commission’s comprehensive programme of tougher enforcement and compliance activity which has also seen the introduction strengthened protections around online age and ID verification, improved customer interaction practices, and the banning of gambling on credit cards.”