Nick Arron, Lead Partner for gambling licensing at law firm Poppleston Allen, highlights the regulator’s evolving compliance standards and the impact on operators.

As many of you will know, last year the Gambling Commission conducted a number of compliance assessments of Adult Gaming Centre (AGC) venues. 

The Commission subsequently wrote to all AGC licensees in late November detailing priority issues the Gambling Commission had identified while undertaking the assessments.

Particularly, the Commission referred to controls relating to customer interaction, identifying and interacting with customers who might be at risk of gambling-related harm and evaluating those interactions and effectiveness of licensee’s approach. 

The second priority area was Anti Money Laundering and Counter Terrorist financing (AMLCTF), and the assessments and identification of risks associated with AMLCTF activity, and implementing policies, procedures and controls to mitigate those risks. 

The Commission’s letter included a table making specific reference to the relevant Licence Conditions and Codes of Practice (LCCP), and to the Commission’s Formal Customer Interaction Guidance for Premises Based Operators, which is mentioned in Social Responsibility Code Provision 3.4.1.

The Commission describes how some customer interaction policies and controls assessed did not always include key criteria that may indicate whether a customer is at risk of, or experiencing, gambling-related harm. 

So, for instance, aggression towards other customers or towards gaming machines, repeated visits to cash machines, prolonged play on the machines or significant spend – are all examples of possible warning signs. 

The Commission referred to the staff who conduct the interactions, with some lacking awareness of how to conduct an interaction effectively and what to do if the behaviour or concern continues. The Commission stated that some operators are not checking whether interactions are working effectively, whether follow-up action is required or whether the interaction was appropriate for the type of harm. 

AML and identifying risks

On the second priority, Anti Money Laundering, the Commission’s criticism was that operators do not always identify relevant risks to the industry. The LCCP references have been in force for a number of years – the guidance on customer interaction for premises based operators was published in 2019 – and I know from my work that customers are aware of the guidance. Over the years operators have endured assessments of their operations by the Commission. It is an important compliance function of the Commission. A number were assessed during 2023, and the Commission considered their LCCP policies and procedures, with generally neutral outcomes. Some of those same operators were assessed by the Commission again in 2024 with effectively the same policies and procedures in use as those that had been assessed in 2023 (some had been improved).

This time, however, the Commission was less happy, which then led to the Commission’s letter regarding raising standards. The LCCP has not changed during that period so what has changed? 

If the policies and procedures were assessed by the Commission as satisfactory in 2023, and there’s been no change to the LCCP, and then similar policies and procedures are assessed again in 2024, why now are they not satisfactory when previously they had been? It is apparent that the Commission have changed their expectations on how they understand an AGC operation to be compliant with the LCCP. 

The standards they expect have risen. In recognising this, the Commission have written to operators, and they are conducting a number of workshops across the country in support of licensees. If you haven’t booked yourself onto one of those workshops, I suggest that you do. 

Regulators should ensure clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply. They should also ensure that their approach to regulatory activities is transparent. 

The Commission will be using the workshops to explain their expectations of a compliant AGC operation to licensees. But those individual operators who were the subject of the assessments, and received critical letters from the Commission regarding their operation may have understandably be confused and aggrieved by the Gambling Commission’s approach. 

In 2023 they were assessed as satisfactory, now in 2024, with little change, they are criticised. The Gambling Commission should have provided guidance on its expectations of a compliant AGC operation prior to undertaking the assessments. 

What is clear as we move into 2025 is that the Gambling Commission’s expectations of AGC compliance have evolved, and licensees will be required to raise standards, particularly in terms of their customer interactions and Anti Money Laundering.