New UKGC regulations: will fairness and safety come at a price?


At lot can happen in a decade. Few industries know this better than the UK gambling industry. In 2008, it generated £8.3bn gross gambling yield (GGY).[1] Ten years later, that figure is now an incredible £14.4bn GGY.

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This performance is impressive, however as the industry continues to grow, new legislations and compliance rules continue to change, and that could impede sales or cause customer drop-off. But, have no fear – there is always a time where necessity or technological evolution drive change in the regulatory landscape.

The UK Gambling Commission (UKGC) believes it is time for the iGaming sector to revisit several decades-old regulations and give those rules the critical updates needed to reflect current technology and to make the industry safer and fairer for all users. We, at Emailage, couldn’t agree more.

What we know so far…

The UKGC held an open consultation with the industry at the end of last year and subsequently announced new rules in early February. The new regulation will require operators to verify customer age before funds may be deposited into an account or gamble including free to play bets. Effective from the 7th of May 2019, online operators will need to follow the new guidelines[2].
According to the UKGC announcement, the primary objectives for implementing these rules are to help prevent underage gambling, improve and regulate age and identity checks, and improve the overall customer experience.

Current age and identity provisions for online gambling date back to a decade old requirement within the Licence Conditions and Codes of Practice (LCCP). The provision has been noted by the Responsible Gambling Strategy Board (RGSB) and UKGC in the 2018 open consultation that since the implementation by the LCCP of a 72-hour requirement to verify age and identity of new gamers, the industry has seen significant improvement in technology[1].

For example, application programming interfaces (APIs) now exist that can verify age and identity within minutes, shaving down the process from heavily manual to mostly automated. For operators, this means they are no longer at risk of losing potential customers due to time-consuming verification processes – they can verify in real-time and improve customer experience. But, this feat was near impossible for the technology that existed a decade ago when the initial provision was written.

Potential impacts on operators

As with any new regulation, operators can expect initial friction, increased operational costs, and the possibility of customer drop off. But, the new regulation will also bring benefits such as improved customer experience and will help push the industry further.

In terms of friction, preventing users from playing until the appropriate age and identity checks have taken place will create a barrier. However, as long as they understand why these checks are taking place, there is no reason why customers could not grow to trust the operators.

This trust could make customers more inclined to loosen their purse strings. Why? Well, according to data from the UKGC, a significant portion of complaints come from valid consumers being unable to claim large winnings due to faults with the current age and identity verifications. Improving these procedures will benefit both parties in the end.

Lastly, customer drop-off is a valid concern because not all customers want to share their personal information or go through round after round of identity verification checks. Ultimately, operators are responsible for the customer journey – which can be improved using tools that check fraud from the first point of customer contact.

There are a myriad of tools that can check fraud while minimizing friction during the sign-up process. Emailage’s EmailRisk Score, for example, uses more than 200 data points, including name, address, email, and IP, to help verify a potential customer’s identity. This rigorous check produces what we call a risk score, kind of like a credit score, that alerts operators to how risky the customer is based on the information provided.

Once operators have the risk score, they can set thresholds for accepting or rejecting potential customers. Overall, this will save operators money by adding another layer of protection that can segment good customers from the fraudster long before any age verification process takes place.

What can operators do?

With the deadline coming up in May and the possibility of fines for non-compliance, the first thing operators should do is review the full guidance the UKGC promised to deliver before the May deadline to make sure they meet the requirements.

In lieu of this, operators should be on the lookout for tools that help verify age and identity in more places along the customer journey. For example, email Risk Assessment tools can, in real time, help determine who is behind the transaction through a myriad of data points. This will help operators focus age and identity verification efforts on the low risk players – improving CX, reducing manual reviews and saving time and money.

They should talk to fraud prevention specialists today to identify the most appropriate solution for their needs.

Would you like to know more about how EmailRisk Score can integrate into your business? Please visit our website for more information.


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