The consultation response was published today (16 May). This forms part of the government’s smarter regulation programme of regulatory reform measures. The reform was brought about by the publication of the ‘Smarter Regulation to Grow the Economy’ policy document in May 2023.
The measures assessed through the consultation were outlined in the government’s Gambling Act Review white paper last year. While many of the proposals addressed the online gambling industry – and attempted to bring it up to speed with the digital age – a number of significant measures were outlined for the land-based industry.
At the time, the land-based industry expressed disappointment over the unspecified timeline for implementing the measures, as well as the role of the GB Gambling Commission.
The consultation round for the land-based proposals was open from 26 July to 4 October 2023. Off the back of this, today, the UK government said it intends to implement five land-based proposals:
- Removing the ban on the direct use of debit cards on gaming machines, relative to the implementation of applicable player protection measures;
- Permitting a 2:1 ratio of Category B to Category C and D gaming machines in bingo halls and arcades;
- Allowing casinos under the 1968 Act to raise the number of gaming machines to 80, if they meet the sizing conditions of a Small 2005 Act casino. Also permitting smaller 1968 Act casinos to have more than 20 machines on a pro rata basis and authorising betting in casinos;
- Introducing an 18-or-over age limit for low stake Category D slot-style machines that pay out cash;
- Raising the licensing fees for maximum chargeable premises by 15%.
Aligning the industry with modern payment methods
The DCMS said that the proposal to lift the ban on direct debit card payments was driven by the aim to “strike an appropriate balance” between modern payment methods and consumer benefits.
Announcing the response, gambling minister Stuart Andrew explained that the move would align the industry with modern methods of payment.
“The prohibition on the direct use of debit cards on gaming machines was intended to protect players,” said Andrew. “However, the use of non-cash payments has increased greatly across society since these rules were put in place and some sectors, particularly machines in pubs, are seeing business disappear because customers do not carry cash.
“We will help future-proof the industry by removing this prohibition subject to appropriate player protections being put in place.”
These player protections would be enacted as amendments to the Gaming Machine (Circumstances of Use) Regulations 2007 and the Commission’s Gaming Machine Technical Standards. Certain aspects of these measures – such as minimum transaction times and safer gambling messaging – will be consulted upon further.
In response to today’s announcement, Rank Gaming Group said it welcomes the lifting of the ban. It added that it will work with the Commission on its implementation.
“We welcome the government’s commitment to removing the prohibition on direct debit card payments on gaming machines, alongside the introduction of appropriate player protections, and will now work closely with the Gambling Commission to ensure that customers are able to benefit from this change at the earliest opportunity.”
Amended 2:1 ratio transformative for Rank
The proposal to amend the ratio of gaming machines has also been met positively.
DCMS said it wished to “support a sector which has experienced significant commercial challenges in recent years” by providing more flexibility in how they offer games. This is in addition to ensuring customers have the option to play on lower-staking machines, to challenge the potential for gambling-related harm.
Rank noted that the amended ratio will allow it to phase out less modern offerings from its portfolio.
“In land-based bingo, the introduction of a 2:1 ratio in clubs, allowing operators to site two Category B3 machines for each Category C or D machine, will enable us to increase our current Category B3 cabinet numbers by circa 500 machines,” Rank’s statement read.
“This change will allow us to gradually remove ageing, reel-based machines from our Mecca estate. Overall, the government’s policy will enable us to reduce the number of cabinets across our Mecca estate.”
The proposal to add more gaming machines was also well received. However, this will be optional for casinos. Under the proposal, the number of Category B gaming machines will rise from 20 to 80 per location. This will be regardless of how many premises licences are owned.
Notably, sports betting will be authorised in casinos. Andrew noted that this would align Britain’s casino offerings with “international jurisdictions”. There will be a sliding scale for the number of self-service betting terminals permitted on each casino site.
Allowing a child to use a Category D machine to be considered an offence
Once the consultation responses are implemented, it will be an offence to invite, cause or permit a child or young person to play on a ‘cash-out’ Category D slot-style machine.
“This is an important measure to create a clear distinction between gambling products for adults and lower risk products accessible to children (such as crane grabbers or coin pushers) which have non-cash prizes or are entirely unlike adult gambling products,” read DCMS’s outcome.
This builds on the voluntary commitment implemented by the British Amusement Catering Trade Association (Bacta) in 2021, Andrew explained. This commitment saw under-18s banned from using Category D machines in members’ venues.
John Bollum, president of Bacta, praised Andrew for the work done to enact these consultation policies for the land-based sector.
“This is a good day,” said Bollum. “The minister is to be congratulated for creating the conditions which will allow the land-based sector to go forward.
“The progress achieved is a testament to the hard work of Bacta and our members in making the case for reform. I would like to thank all the Bacta members who have helped in this campaign which has taken four years.” Bollum added that Bacta would work with the Commission to progress cashless gaming.
Maximum premises fees up by 15%
Finally, DCMS will push through an increase on maximum premises fees by 15%. The department explained that the rise ties into regulating the industry and protecting customers from harm. The fees are used on a cost recovery basis, and allow licensing authorities to carry out enforcement and administrative measures.
John O’Reilly, CEO of Rank, remarked that today’s announcement spells progress for the land-based sector – particularly in improving player experiences.
“Today’s government response to the land-based consultation is good news for Rank,” said O’Reilly. “Providing the legislation is on the statute books by recess in late July, we are looking forward to improving the customer proposition in our venues with a roadmap of investments and improvements in the months and years that follow.
“The legislative modernisations cannot come a moment too soon, so we are pleased with the progress contained in today’s announcement.”
Gambling Act white paper proposals advancing one year on
The announcement comes just two weeks after the Commission confirmed the timeline for implementing four initial white paper consultation topics. These were:
- Financial risk and vulnerability;
- Online games design;
- Improving consumer choice on direct marketing;
- Strengthening age verification in land-based premises.
Rules on these measures will be implemented between August 2024 and February 2025.
Most prominently, the Commission will introduce a pilot for affordability checks, one of the white paper’s most controversial topics. This pilot will span six months and will not impact customers during its live period. The Commission stressed that it will not be rolled out in a live environment until the data-sharing process is “frictionless”.
Original article: https://igamingbusiness.com/legal-compliance/regulation/direct-debit-card-gambling/
