"Skill with prizes" under the microscope

The 'skill with prizes' gambling genre has been under the UK Gambling Commission microscope lately in order to ascertain whether or not some games described as SWPs are in fact gaming machines.

The result is an opinion that ‘skill games' which are designed to look like recognised games of chance (such as roulette or bingo) are games of chance under the Gambling Act 2005. The Commission also has concerns regarding the compensation or control mechanism used in some types of skill machines.

In a letter this week, James Holdaway, the Commission's policy programme manager, sets out the Commission's position in more detail. Holdaway writes that ‘skill games’ which are designed to look like recognised games of chance (such as roulette or bingo) are being presented as involving an element of chance and are therefore games of chance according to section 6 (2)(a)(iii) of the Act.

"Such machines are subject to all the regulations and controls which apply to gaming machines, for example in relation to supply, location, numbers, stakes and prizes and technical standards. In this respect, we believe at least some machines are being illegally sited and operated. We are contacting the manufacturers of such machines.

"In addition, and in the light of what BACTA has told us, the Commission has also developed grounds for concern regarding the compensation or control mechanism used in some types of machines. In particular whether in reality the compensation or control mechanism operates in such a way that it introduces an element of chance into the way the game is played, at least on some occasions. If so, the machines are gaming machines as defined by section 6(2)(a)(i) of the Act.

"More widely, we would like to work with the industry (including BACTA), HMRC and others to develop a list of characteristics exhibited by genuine SWP machines to provide the industry, regulators and the public with greater clarity about the status of individual machines."


Offshore operators from UK advertising white-listed jurisdictions are targeted in mystery shopping program.

The Commission has also continued to operate a rolling program of mystery shopping on gambling websites as part of its ongoing compliance activity.

This programme includes operators regulated overseas that advertise their services to the UK market as well as operators licensed by the Commission.

The programme looks at various aspects of social responsibility; whether advice on social responsibility measures is easily accessible; whether self exclusion is available and clearly signposted; whether customers can set their own financial limits; and whether operators prevent people under 18 years of age from gambling and withdrawing winnings.

A summary of the results of the program between April 2008 and March 2009 is available for public scrutiny at:

http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/Online%20mystery%20shopping%20programme%20July%2009.pdf

The results show that the vast majority of the largest operators and those with the greatest UK facing business have sufficient social responsibility measures in place, with over 99 percent of active customer accounts registered with operators having easy access to responsible gambling information, self exclusion measures and financial limits.

Testing was also carried out for underage gambling, and the Commission found that of the websites regulated by the Commission, over 95 percent of active customers were registered with operators that had no identified weaknesses, 2.5 percent were registered with those in the inconclusive category due to either technical limitations or other factors that made it difficult to assess the operator and only 2.2 percent were registered with operators that had weaknesses that, in some circumstances, could allow under-age persons to gamble and withdraw winnings. These results are supported by other statistics collated from complaints, regulatory reporting and research.

All operators licensed by the Commission with deficiencies have been formally notified and those still trading here have confirmed to us that remedial action has been taken. In addition, the Commission has notified the overseas regulators of the nature of the deficiencies relating to the social responsibility measures tested.

"We are working with all regulators and in many cases action has already been taken," the Commission reports. "Overseas operators with deficiencies in relation to our requirements will also be re-tested and, as part of our remit to advise Government on gambling issues, we will provide information to the Secretary of State on the overall position although not on identified operators."

The Commission's program tested for:

• the effectiveness of an operator’s systems to prevent underage gambling;
• the availability of customer set financial limits;
• the availability of information on how to self exclude from gambling facilities; and
• the availability of responsible gambling information.

Initially focused on assessing the age verification systems of websites licensed by the Commission, the program was then extended to cover the other key social responsibility requirements and to include those operators regulated overseas but permitted to advertise into the UK. These include operators based in EEA States (Malta), Gibraltar and jurisdictions that have been added to the UK Government’s white list. The current jurisdictions on the white list are Alderney, Antigua and Barbuda, Isle of Man and Tasmania.

Commission employees used the identities of 16 year old volunteers (with parental consent) and a category of bank account that is commonly available to individuals under the age of 18. The volunteers’ details and bank account were then used to attempt to register with online gambling operators using a false date of birth to make them appear to be 18 or over. Once registered, the employees then gambled modest amounts and attempted to withdraw winnings.

During the test period the Commission assessed the age verification systems of 37 of its licence holders. Those tested have some 14.3 million registered customer accounts with 3.2 million of those considered active (gambling activity having taken place within the last 12 months.) These customers may be located in Britain or overseas.

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