What Are the New Rules for Verifying Online Gamblers?

Posted by Harry Kane on Tuesday, March 19, 2019

The UKGC has been working exceptionally hard of late, as it seeks to realise its core strategic objective of safeguarding potentially vulnerable gamblers in the UK. This came to a head last year, when the regulator applied total penalties worth £14 million on three casino operators for failing to make adequate checks on customers (while forcing a fourth firm to surrender its license to operate in the UK).

Far from resting on its laurels, however, the UKGC has redoubled its efforts so far in 2019 and introduced a raft of new rules to help make gambling safer and more transparent online.

These rules have tended to focus on the methods used to verify customers’ identity and age, and the speed with which operators complete this process. In this article, we’ll appraise these rules in further detail and ask what they’re likely to mean for the industry as a whole.

What Are the New Rules from the UKGC?

It can be argued that the rules surrounding identity verification are largely inadequate at present, which is why the UKGC have moved to make strategic and positive changes.

The most striking takeaway is that operators will need to verify each customer’s details before they can deposit funds and gamble in the UK, when the brand new legislation comes into force on May 7th of this year.

The current process allows operators up to 72 hours to verify the identity of their customers, which in turn enables potentially vulnerable gamblers to open an account and wager regardless of their age or precise circumstances.

While the UKGC has not suggested a time-frame in which operators should verify new registrants, it is implementing significant restrictions on what unverified players can do through a gambling website.

Given this and the fact that new players will be unable to credit their account or wager without having had the identity verified, there’s a clear incentive for operators to comply with the new law and subsequently vet individuals within an exceptionally short time-frame.

It’s also worth noting that the new laws would prohibit customers from gambling with any free bet or conditional bonus that’s applied when they register, further restricting players and forcing the hands of operators in the process.

Why Have the New Laws Been Introduced?

The decision to introduce these new laws is arguably long overdue, while there are several different factors that will have influenced the thinking of the UKGC.

The most prominent of these is the reported failure of the gambling self-exclusion service GamStop, which is an independent scheme that exists solely to empower problem gamblers to restrict access to their online accounts.

Despite its best intentions, the scheme has been besieged by a number of structural and technical issues since its inception, while a recent investigation by BBC 5 Live uncovered “deep concerns” about how easily the system could be circumnavigated by people with a strong compulsion to bet.

A total of 50,000 people have signed up to the GamStop initiative since it was launched in April last year, but the investigation proved that registrants could still place bets online simply by changes their user details including user name and email address.

This completely contravenes the purpose of the scheme, which in theory enables players to ban themselves from gambling sites either indefinitely or for a predetermined period of time.

In the immediate aftermath of the investigation and its findings being published, the UKGC said that it would move to introduce tougher ID checks and more stringent guidelines for operators to adhere to.

It has since worked quickly to bring these regulations to life, with the new laws representing the first step towards safeguarding individuals who aren’t in a position to adequately protect themselves.

Beyond this, the regulator hopes that the new rules will also tackle the troubling issue of underage gambling in the UK. After all, it has been suggested that the number of children aged between 11 and 16 classified as having a gambling problem has quadrupled to more than 50,000 since 2016, and while these figures may be a little misleading they clearly highlight a key point of focus for regulators.

With more stringent verification rules in place and operators being incentivised to vet players quickly and before they can wager, the UKGC is hoping to prevent underage gamblers from accessing reputable and licensed online casino sites.

How Will the New Rules Impact on the Market?

Ultimately, the justification for these new rules and regulations is clear, while there’s no doubt that they represent the latest attempt to empower operators and compel them to regulate themselves in the current market.

This is something of a masterstroke, as by placing responsibility on the shoulders of operators and making it commercially beneficial to improve their verification processes, they’ve created a winning formula that can help to safeguard players in a genuinely sustainable way.

Beyond this, the new rules have also been designed to make the collection and withdrawal of winnings fairer for gamblers. This was another controversial talking point during in 2018 after the Commission announced in March that some online operators were treating customers unfairly by requesting further identification verification when they attempted to withdraw money from their account.

Incredibly, an estimated 15% of complaints to the UKGC’ contact centre concerned licensees not allowing customers to withdraw funds until they had supplied specified forms of photo ID.

The argument here is that operators were leveraging the 72-hour loophole to their advantage, by creating a short window in which new registrants could wager and spend before attempting to verify their identity when the time came to withdraw.

This is unethical at best, and the Commission’s new laws will ensure that customers have had their identity fully verified before they wager a single penny online.

On another note, the new rules will also require gambling firms to record detailed and accurate data pertaining to their customers (and particularly their identity). This may require subtle changes to the typical sign-up process and how identities are verified, which in turn may force operators to invest in more robust software.

This will also have the desirable knock-on effect of preventing criminal activity and money laundering, which are issues that have plagued some of the leading gambling brands in recent times.

William Hill was hit with a hefty £6.2 million fine at the beginning of last year after it was found that systematic failures in senior management had failed to protect customers or prevent money laundering practices through its sites.

All-in-all, these new rules will protect the most vulnerable gamblers in the UK, from those who have a compulsion to wager to others who are underage. At the same time, they’ll allow for more transparent use and withdrawals, while simultaneously making it harder for criminals to launder large sums of money through online casino sites.

The Last Word – Is There More to Come from the UKGC?

These new rules are impressive, especially in terms of how they’ve been structured to guarantee compliance from operators.

As a result, they’re likely to be extremely effective in the shorter-term, both in terms of safeguarding players and enhancing the overall experience of wagering cash in an online casino or sports betting hub.

With this in mind, you could be forgiven for thinking that the UKGC’s work is done when it comes to ensuring that operators verify their customers’ identity. Nothing could be further from the truth, however, as the regulator is likely to consider these new rules as a building blocks for further changes in the future.

They may also be part of wider plans to protect vulnerable and underage gamblers online, particularly through other digital mediums such as social media. This is another major concern, with sites such as Facebook and YouTube featuring deceptively large amounts of gambling-inspired content including games and casino reviews.

Not only this, but these sites allow individuals to register for an account from the age of 13 and above. This means that hundreds and thousands of kids aged under 16 are being exposed to incrementally higher amounts of gambling content on social media, without any kind of regulation or age verification to protect their interests.

Of course, the lack of regulatory measures for social media represents a huge issue and one that’s well beyond the jurisdiction of the UKGC. However, by adopting a collaborative approach with social media giants it’s hoped that gambling regulators can fill the void and prevent youngsters from being exposed to gambling from an early age.

This strategy will also need to extend beyond social media to include a host of relevant digital channels, while it will also take considerable time and effort to create effective regulatory measures. However, it undoubtedly represents the next part of the Commission’s plan, as it looks to build on recent changes and achieve its goal of protecting gamblers across the length and breadth of the UK.