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The UKGC Starts Holding Talks to Refine VIP & Loyalty Schemes
By Jeff Osienya Jun 23, 2020 LegalityProposed gaming industry restrictions push the UKGC to correct inherent flaws about how gaming operators treat high value customers. The Commission, GVC, BGC, and consumers are now collaborating to roll out a refreshed code of conduct.After the barrage of restrictions that were proposed by the Gambling Related Harm All-Party Parliamentary Group (GRH APPG), the United Kingdom Gambling Commission (UKGC) is now swinging back. However, even though the UKGC is moving to ward off the crushing political pressure from the GRH APPG, the regulator is treading carefully to ensure that its focus remains on helping players, rather than playing politics.
The commission has now opened talks with high value customers (HVC), who are the biggest source of revenue for gaming platforms. Through this dialogue, the UKGC is searching for answers to ways that it can raise the HVC standards by direct communication. Any VIP player who is open to giving feedback has until 14th August to offer insight that could potentially remodel the HVC standards in the UK.
HVC Single-Handedly Keeping the Industry Alive
For the longest time, this HVC matter has been one of the most controversial subjects in the gaming industry among watchdogs, policymakers, and the operators themselves. HVC schemes are usually referred to as VIP or loyalty programs, and they often shower the high value customers with super lucrative deals and special treatment to boost customer retention and foster engagement with the players.
Data are collected of late has shown that up to 83% of the deposits loaded on online casino platforms usually comes from only 2% of the patrons – the high value customers. On the other side of the coin, recent studies have also disclosed that the HVC players are typically the most susceptible to problem gambling issues. According to the UK ombudsman, the HVC who end up sinking into problem gambling are typically too immersed into the gaming that they end up losing their ability to calculate the risks of the wagers they are placing.
This could be one of the main reasons why the GRH APPG strongly called for the abolishing VIP schemes. However, if we flip the coin to the other side once again, doing away with these loyalty programs could mean the demise of the entire UK gaming industry as we know it.
It Will Take Collaboration to Make the Gambling Industry Safer
While the situation appears to be a classic catch-22, that doesn’t mean that it is out of the hands of the UKGC. The solution here is about finding the delicate balance between consumer protection and of course, industry continuity. Without balance, one side will be squeezed too hard which will eventually bring the industry down either way.
Thankfully, the UKGC has already unveiled an industry workgroup in conjunction with the Betting and Gaming Council (BGC) and GVC to update the License Codes and Conditions of Practice (LCCP) for more thorough screening of VIPs and refining how incentives and promotions are dispensed to the HVC.
This fresh code of conduct will now compel gambling operators to verify that HVCs can truly afford to spend what they are loading into their gaming accounts. Under the new code, gambling companies serving UK players will also have to commit to regularly conducting thorough KYC checks to guarantee player safety.
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