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A ban on cross-selling and new enforcement powers granted to the UK’s consumer protection agency are raising the stakes on customer-facing compliance in gambling yet again.
In March, the UK Gambling Commission announced new rules that banned promotions encouraging gamblers to switch from one product to another and that decreased the cap on bonus wagering limits.
This was followed earlier this month by the introduction of a new regime at the Competition and Markets Authority (CMA) that grants the watchdog significantly enhanced enforcement powers.
Much like the Gambling Commission, the CMA will now be able to fine companies directly for compliance breaches, replacing a regime where it needed to take a company to court to extract a monetary penalty.
In the early months of its new approach, the consumer agency has said it will focus enforcement on aggressive sales practices that prey on vulnerability and contract terms that are obviously imbalanced and unfair, among others.
“Consumers deserve to know that the CMA has their back, and fair-dealing businesses looking to grow and invest deserve to know that their competitors are playing by the same rules,” said Sarah Cardell, CMA chief executive.
The CMA’s most direct intervention in gambling came in 2018, when it developed new rules on operator terms and conditions alongside the Gambling Commission.
T&Cs In Focus
The new threat of enforcement comes as gambling terms and conditions (T&Cs) fall under increased scrutiny in the UK, following a High Court ruling in March that saw Flutter-owned Paddy Power fail to prevent gambler Corrine Durber from claiming a £1m jackpot that the operator said was awarded due to a “programming error”.
The judge said that the rules of the game as they were presented on screen took precedence over any other terms and conditions, and that the T&Cs that could have prevented Durber from collecting her money were “unusual” and “onerous”.
The terms used by Paddy Power “were by no means out of step with industry practice, even today”, noted Claire Livingston, a partner and consumer law expert at Wiggin law firm.
“There’s an obvious need for operators to review their terms and conditions in light of this case,” she warned in a blog post.
More Pressure On Affiliates
The tougher approach from the consumer watchdogs in the UK, alongside the Gambling Commission’s new rules, adds up to a much tougher landscape for bonuses, one of the main tools used by affiliates to tempt new players, at a time when the UK sector is already struggling.
Under the commission’s incoming rules from December, it will be forbidden to “cross-sell”, meaning to convert players from one form of gambling to another through the use of bonus offers or other inducements.
Transferring players from sports betting to the much higher-margin world of online casinos has been and remains a long-standing commercial technique in the gambling world.
The news makes tough reading for the beleaguered affiliate sector, which is already reeling from recent market challenges.
These include policy updates from search engine giant Google. Recent changes include an end to so-called “parasite SEO” in which marketing posts for unrelated industries are inserted onto high-ranking websites to piggyback off their search rankings.
“Things are tough in the affiliate world,” said a consultant who works on M&A in the sector, speaking to Vixio GamblingCompliance on condition of anonymity.
Alongside Google’s soft regulation, the consultant cited initiatives at operators to cut down the number of suppliers they work with, troubling financial results for some of the large publicly-listed affiliates and changes to opt-in/out rules.
“That being said, we are aware of deals on the table,” the consultant said.
