The UK’s Gambling Commission (UKGC) has introduced new guidance regarding VIP customers. 

Aimed at tackling “irresponsible incentivisation” of high-value customers, and improving customer protection, the new rules have been formulated following a consultation process that ran from June to August. 

UK operators will now be required to conduct extensive checks on customers before enrolling them in VIP programs. In addition to on-going gambling harm checks, operators will need to ascertain the source of funds and occupation, and carry out identity verification. Crucially, operators will be required to establish that customers’ spending is affordable and sustainable.

Each VIP program will also be required to be overseen by an assigned senior executive, who must hold a personal management license (PML). They will be personally responsible for customer safety. 

Commenting on the changes Gambling Commission chief executive, Neil 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.

“We understand that the number of customers signed up to ‘VIP’ schemes has already reduced by 70% since we challenged the industry to get its house in order, last year. 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.

“Operators can be in no doubt about our expectations. 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.”

The new rules will be enforced from 31 October 2020. 

In the coming weeks, the Commission will be launching a consultation on customer interaction, and will also be responding to a consultation on safe online game design. 

Last week, the UK’s Betting and Gaming Council (BGC) attempted to assuage the UKGC by introducing a new code of conduct covering the design of online games. 

AYO.NEWS says:

Though this is going to add a lot of extra work and responsibilities for gambling operators, everyone knew it was coming, and many would argue the industry brought it on itself. For a long time now, many operators have centred their business models around attracting a relatively small number of ‘VIP’ customers, usually via affiliate marketing networks – leaving themselves horribly vulnerable to changes like those announced by the UKGC today. 

Of course, there is an alternative approach, which involves scaling and relying on large numbers of microtransactions. This tends to be more common in the esports and crypto betting scenes, and requires extensive automation to make it viable, but it arguably results in more sustainable and resilient businesses. 

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