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ADR in the Gambling Industry – Impact for players and operators

On the 7th of August, 2019, the UKGC published a document called Alternative Dispute Resolution (ADR) in the gambling industry – Standards and Guidance for ADR providers (https://www.gamblingcommission.gov.uk/PDF/ADR-in-the-gambling-industry-guidance.pdf). While much of the information contained in this document is specifically for ADR, these policy changes also have fairly profound ramifications for both players and operators within the UK market. As such we’re going to provide a quick summary of what these changes mean for players and operators.

Please be aware that throughout the document we will put emphasis on section of quotes that we feel are relevant to the points we raise. This is not indicative of the original formatting or stresses included by the regulator.

Non-Approved complaints services – Impacts operators

The first notable inclusions in the document are as follows:

“1.10 We expect ADR providers in the gambling industry to meet these additional standards. We will identify those that do on the list of approved providers on our website. We will review providers against the standards and remove a provider’s credit against the additional standards where appropriate. In 2019, we will consult on a change to our Licence conditions and codes of practice (LCCP) for gambling businesses. This change would require businesses to only use providers who meet both the requirements of the ADR Regulations and our additional standards.


“1.14 Our objectives in implementing these additional standards are to: ensure that gambling businesses only use ADR providers that comply with these requirements, promoting consistency of approach for both consumers and businesses

We have reached out to the UKGC and confirmed with them that the intent of the above terms is to ensure that operators continue to work with and actively direct players to an approved ADR that continues to meet the new standards. These terms do not prohibit or discourage operators from engaging with any non-approved 3rd party that the player chooses to contact outside of the operators official complaints policy.

To be clear, the Gambling Commission has offered no position on whether or not operators should engaged with non-approved services where they are requested to do so by players. This is considered a private business decision for the operator to make.

Update: After this article was written the following quote was provided to us by a team leader at the UKGC with respect to this issue. The sections in red were slight modifications that the individual requested to the originally intended quote to ensure that it was as clear as possible:

Limitation on investigative powers – Impacts players

“2.16 The ADR provider will determine what method(s) of dispute resolution to use during a dispute. It should identify the key issues and seek additional information from either party to the dispute to clarify information they have already supplied. For example, if the provider identifies a gap in the evidence it is acceptable to ask either party to the dispute about the gap and for information that fills it. The ADR provider does not have an investigatory role beyond this. It would not be acceptable for the provider to undertake an investigation that went beyond clarifying the information supplied by the parties to the dispute.”

The above limits ADRs to making ruling solely based on the information presented by the involved parties. The implication here is that any claim made will have to be proved solely by information provided by the claimant.

For example, where a player was to claim that the terms and conditions of an offer had been changed after they played, they would have to provide supporting evidence to validate this claim. It would not be acceptable for the ADR to look to verify the claim by reviewing the Google Cache, Wayback Machine or any other resource to attempt to establish a timeline of changes made to the terms document. The onus is on the player.

Another example - where a player complains about an unfair game ADRs are actively prohibited from conducting any investigation into claims made by the player.

While admittedly the vast majority of claims of this nature made by players lack credibility – the player has clearly lost more than they are emotionally comfortable with but lacks a mathematically significant data set upon which sound conclusions could be drawn – there have been multiple occasions where further investigation by this service has uncovered serious game integrity issues.

The simple truth is that most players do not have the necessary mathematical understanding to verify a game fairness issue even where they have a credible data set. Where ADRs are limited from investigating claims of this nature the chances of them ever been confirmed or corrected are minimal.

This restriction clearly limits the actions the ADR can engage on behalf of the player. From a purely academic perspective this restriction likely re-balances the system in terms of impartiality but in terms of practical implications the player is unlikely to have access to the same resources and knowledge that the operator has to compile their own case so start at a significant disadvantage. Limiting an ADR's right to investigate a player's claim properly will likely result in fewer player favourable rulings.

Requirement to share evidence – Impacts operators

This document clarifies and reasserts the requirements for ADRs to provide both parties with all evidence submitted by the other party.

“2.18 Where the ADR provider makes a decision on a dispute using an adjudication process, it should base this on the evidence available to it at the time. This means that: a) if a gambling business does not engage with the ADR provider and/or fails to supply information that has been reasonably requested, the provider should proceed to make the decision based on the evidence they hold. This may mean that the provider finds the case in favour of the consumer in the absence of evidence to the contrary. b) if a court or regulatory body considers the matter at a later stage and reaches a different outcome, this does not make the ADR provider’s decision wrong at the time that it was made. The court or regulatory body may have access to different information and use a different approach to the ADR provider. ADR providers should consider whether court findings provide any opportunity for learning in the future. This could also include findings related to consumer protection legislation or marketing and advertising. ADR Regulations – requirements for ADR providers to disclose evidence - 2.19 The ADR Regulations require a provider to disclose to a party to a dispute on request the arguments, evidence, documents and facts put forward by the other party (ADR Regulations Schedule 3, 7(b)) as part of the requirements under fairness.”

The consequences of this particular change are that operators are placed in an impossible position when dealing with any potentially fraud related claim. Any evidence they submit to defend their actions will be automatically available to the claimant, educating the claimant as to how their activity was detected and actively facilitating future abuse by providing insight into how detection can be avoided. The alternative is not to defend the case, in which case the ADR is likely to rule against the operator.

It should also be noted at this point that any information provided in this manner effectively becomes public domain. There is no restriction on the complainant re-publishing this information anywhere they like. As such the risk to the integrity of security policies is not simply restricted to the individual complainant, but can result in sensitive information being put into the public domain. At that point the ramifications for the operator extend far beyond the complaint or UK market.

So the choices for operators are to defend fraud related complaints at the cost of their fraud prevention policies becoming public domain (impairing their ability to identify future fraudulent activities in all markets) or not to defend these cases and simply pay all multi-accounters making detecting these accounts an irrelevance.

Suspicious Activity Reports – Impacts operators

The document updates the procedures surrounding the submission of Suspicious Activity Reports (SAR) where an operator believes a crime may have taken place:

“3.10 Types of disputes linked to regulatory matters could include (please note that these examples are not exhaustive): Non-payment of winnings/ account suspended due to anti-money laundering (AML) concerns We expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. The ADR provider does not need to know whether the gambling business has submitted a Suspicious Activity Report (SAR) to the appropriate authority to do this, and the gambling business should not disclose this information to the provider. If the ADR provider decides the dispute in the consumer’s favour, the gambling business should pay the consumer/return the consumer’s funds. Where the business continues to suspect or knows that the customer is laundering money, they may do this by submitting a defence against money laundering (DAML) SAR, requesting a defence for potential money laundering offences in respect of the transaction in question (that of paying off the customer). If consent is refused, it will be for the gambling business to seek information from appropriate authorities on what may be disclosed to the consumer. We intend to provide some additional information to gambling businesses to remind them of these obligations.”

Operators are no longer allowed to inform ADRs where a SAR has been submitted.

This creates a multi-faceted problem. Where a SAR has been submitted the operator cannot take any action that may result in the subject of the SAR being “tipped off” that there may be an ongoing criminal investigation into them. As evidence provided to the ADR can be shared with the SAR subject, anything that may indicate that the operator has identified illegal activity has to be withheld from the ADR to ensure that the operator does not breach tipping off rules. So the operator is then significantly handicapped in their ability to defend their actions which ultimately makes an unfavourable ruling far more likely.

Where an unfavourable ruling occurs standard 3.10 requires the operator to apply for a Defence Against Money Laundering (DAML) from the National Crime Agency (NCA) and upon receipt pay the player. However, as is made clear in the guidance issued by the NCA with respect to DAML’s, a DAML does not represent “permission” to process a transaction:

“Q.27: I have received a DAML from the NCA; can I proceed? It is a matter for each reporter to determine whether they should proceed, taking into account their ethical, legal and regulatory obligations, as well as commercial considerations. You should consider your next steps carefully and should not take the NCA’s granted letter as ‘permission to proceed’. You have a defence to specific offences in POCA but not to other criminal offences (e.g. those in the Money Laundering Regulations 2017, Bribery Act 2010, Fraud Act 2006 etc.).”

Effectively, while a DAML is a statement from the NCA that they are not currently prohibiting the transaction occurring, the onus falls to the operator to determine the legality of processing the transaction and there are numerous ways that doing so could constitute a criminal offence.

This particular policy potentially exposes those decision makers responsible for issuing the payment to criminal prosecution if it is later determined that the transaction should not have occurred. While we understand that SAR submissions have been inappropriately used to stifle dialogue by some operators in the past this is a very tough position to put operators in with potentially breaching the law on one side and breaching regulatory policy on the other.

Cannot withdraw = Cannot deposit – Impacts both players and operators

The document gives an example of factors that should be considered by ADRs in any complaint situation as follows:

“Account suspended due to failed identity checks/ refusal to comply with identity checks. We expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. ADR providers may wish to consider the nature of the information that the gambling business is requesting the consumer to provide, and whether it appears to be reasonable/fair in accordance with the requirements of consumer protection legislation and money laundering regulations. The provider may also wish to consider the reasons behind and the timing of the request. For example, if a gambling business allows a consumer to continue to deposit funds while refusing to allow him or her to withdraw them, this might cast some doubt on the necessity of the checks.

The above would seem to imply that if an operator has placed a barrier to processing withdrawals on an account then continuing to accept deposits while the verification process was ongoing would undermine the credibility of any security concerns that were a barrier to processing a withdrawal.

In short it would seem wise for operators to take the position that if withdrawals are suspended, deposits to the account should be suspended as well.

Responsible Gambling – Impacts players

For years now the most vulnerable players have been left absolutely without recourse in case of any dispute other than to look to pursue the operator through the court system. Early edicts from the UKGC required ADRs to decline Responsible Gambling related complaints, meaning that those who have often already lost more than they can afford were faced with the daunting and potentially expensive process of pursuing legal action (where an address to serve the operator could even be located).

The ADR Guidance document changes this, defining specifically which Responsible Gambling complaints ADRs should review and which should be passed to the regulator:

“Permitted to gamble when self-excluded. A consumer may enter into a self-exclusion agreement with a gambling business, under which the consumer agrees to exclude themselves from gambling with the business and the business agrees to help prevent the consumer from accessing the gambling facilities. The ADR provider’s role does not include considering whether the business’s self-exclusion policy is effective – this is a requirement of the business’s licence and is a matter for us. However, we expect the provider to consider whether terms and conditions attached to any self-exclusion agreement are clear and fair in accordance with the requirements of consumer protection legislation, and whether it would be clear to the consumer that they were excluded from the channel, platform or premises from which they attempted to gamble. ADR providers should note that multi-operator self-exclusion schemes are in operation for both online and land-based gambling sectors. The gambling businesses do not run the multi-operator schemes, and therefore do not have responsibility for the terms and conditions or clarity of the schemes. As a result, complaints related to these schemes are a matter for us.

To clarify via example the basic meaning of the above:

i) Complaints about Gamstop (the “multi-operator self-exclusion scheme”) cannot be managed by ADRs. This is reserved to the Gambling Commission.

ii) Complaints about a player’s self-exclusion with an operator/license can be managed by ADRs. For example: a player asks for a 6 month self-exclusion on brand A and is allowed to play either at brand A or brand B, which is on the same license, either during the self-exclusion period or after the end of the self-exclusion period but before proper self-exclusion termination policies have been engaged. This would be a matter for ADRs.


iii) ADRs are not competent to review whether an operator’s self-exclusion policies are in line with LCCP requirements. For instance: The operator offers only a 6 month self-exclusion option but the LCCP requires that they provide a range of options between 6 month and 5 years. The review of any complaint by the ADR would have to be based on the operator’s stated policies, not the LCCP. If the player was contesting that the operator’s policies were not compliant with the LCCP this issue would have to be directed to the Gambling Commission.

The document covers more ground with the following:

“Disputing that the gambling business should have intervened to prevent the consumer from coming to harm/spending their money. We expect gambling businesses to intervene if a consumer appears to be at risk of being harmed by their gambling. Businesses must take account of a range of factors in determining whether to intervene, such as patterns of play, observed behaviour, language used in communicating, as well as time or money spent to determine whether to intervene, and may need to develop this information over a period of time. As a result, it is unlikely that ADR providers will be able to identify a specific contractual/transactional element to the issue.

So ADRs unlikely to be able to manage any complaint where the player is claiming that the operator should have taken action to protect them and these cases hould be forwarded on to the Gambling Commission.

Overall these changes make a big positive difference for players. However, based on our own experience with Responsible Gambling related complaints, they are still going to leave a lot of vulnerable players with no ADR recourse and given that the Gambling Commission’s stated policy to date (as we understand it) is that they will not review or intervene in individual issue and will not provide any feedback on any action taken, where complaints are directed to the Gambling Commission themselves the submitting complainant has a far lower chance of receiving any explanation or understanding of why their case was managed in a particular way. In our opinion this is an issue that the Gambling Commission should look to address as a priority.

Costs and Expenses – Impacts players and operators

The ADR Guidance make the following statements regarding costs and expenses incurred by the complainant during the ADR process:

“3.12 Depending on the type of dispute resolution offered, the ADR provider will agree a resolution to the dispute with both parties or use the available evidence to make a decision to resolve the dispute. If the outcome involves a payment for the consumer, the ADR provider may also consider factors such as - reimbursement of out-of-pocket expenses caused by the dispute (for example, if the consumer has incurred a cost for documents that the gambling business has asked them to provide, such as notarised documents). The ADR process is intended to be free for the consumer, so following the process should not put them out of pocket. The ADR provider need not reimburse consumers for everyday costs that might arise in making a dispute, such as the costs of a telephone call. However, where the consumer has been required to incur considerable amounts of telephone charges, or travel costs to attend an ADR hearing, the provider should consider whether reimbursement is appropriate."

The above contains a couple of interesting implications.

Firstly – the Gambling Commission indicates that costs for Notarised ID (NID) requests should be considered for reimbursement by the operator in any ruling, but significantly this is only implied in situations where “the outcome involves a payment for the consumer”. So in situations where NID is requested but the ultimate ADR ruling favours the operator, the consumers would not be due reimbursement from the operator for obtaining NID. This is an interesting exclusion that effectively leaves any player asked for NID gambling on winning their case to get their costs reimbursed.

Secondly - at various points during the document the Gambling Commission seems to be encouraging ADRs to engage in management of complaints via phone. From a professional standpoint this seems an unwise move for a number of reasons, but beyond this by then making the ADR responsible for costs of lengthy phone interactions they are actively creating a disincentive for the ADR to follow their recommendations.

Compensation – Impacts players and operators

The Guidance document introduces a new standard expecting ADRs to consider whether compensation is due:

“3.12 Depending on the type of dispute resolution offered, the ADR provider will agree a resolution to the dispute with both parties or use the available evidence to make a decision to resolve the dispute. If the outcome involves a payment for the consumer, the ADR provider may also consider factors such as: a) compensation for distress or inconvenience, if that has been considerable. An ADR provider may, at their discretion, consider awarding compensation to a consumer if the provider can establish that a gambling business’s actions have caused the consumer considerable distress or inconvenience. We expect that this will be exceptional rather than typical.
New standards – general principles for considering compensation
3.13 We expect ADR providers to take into account the following general principles when considering whether to award compensation (rather than reimbursement):
• In awarding compensation, the ADR provider is recognising the emotional or practical impact on the consumer, rather than punishing the business.
• The ADR provider may look at whether a dispute has had a considerable emotional or other impact on the consumer beyond a financial impact. For example:
• significant distress, including stress or physical or mental suffering
• inconvenience, including where a consumer has had to expend considerable effort or time because of a business’s mistake
• damage to a consumer’s reputation by a business’s action
• In most cases providers will not award compensation, recognising that any dispute is likely to cause a measure of inconvenience or upset. Providers should consider whether compensation is warranted where the impact of the business’s actions have had a considerable effect on a particular consumer.
• Providers should also recognise that all consumers are different, and what is a significant impact for one person may not be for another. Providers should consider compensation awards at their discretion, taking into account all the circumstances of the case. This means that in similar cases, providers may award different amounts of compensation – or award compensation for one case but not another – depending on the overall impact on the consumer. We expect providers to apply a consistent approach to determining the amount of any compensation awards, although the outcome of each case may be different.
• The amount of any compensation awarded is at the discretion of the ADR provider and is not subject to appeal within the ADR process. This does not affect the consumer’s right to appeal the provider’s decision in a competent court.
3.14 ADR providers should use their discretion to decide what to award, if compensation is deemed appropriate. The amount of money in dispute may be a factor to consider, though the impact on the consumer will usually outweigh this. The provider may also consider that a non-monetary award, such as an apology, is appropriate. ADR providers in the gambling industry may wish to agree an approach to compensation with each other.”

In our professional opinion the inclusion of this standard and any expectation for ADRs to manage 'compensation' type claims is a significant error in terms of the comparability with the courts the ADR system is intended to offer an alternative to, competency of ADRs to execute this standard, and due to the standard significantly skewing the system away from even-handedness to a stark and unquestionable bias to one party.

In the first instance, the small claims track of the County Court system in England and Wales, which is what the ADR system is intended to offer an alternative to with binding rulings capped at £10k, has very limited scope to award compensation or damages (https://en.wikipedia.org/wiki/Small_claims_court#England_and_Wales). There is no scope to award compensation for emotional distress or inconvenience. Similar limitations are absent from the ADR standards document.

Expecting ADRs to act as an authority beyond that of the County Court is a distortion of what the ADR system was intended to achieve and if the compensation discussed in this document is targeted at claims that exceed the £10k threshold, the ADR will very likely be providing a non-binding ruling that the operator is under no legal obligation to adhere to.

Where a court awards damages or compensation they do so from a position of context with this type of award across a range of sectors and situations. The judge making the award has at least some relevant experience to draw upon and a wealth of case records to review to determine what constitutes appropriate compensation in any given scenario. There is not a single ADR included in the UKGC scheme that we would consider sufficiently experienced in this area to be competent or knowledgeable enough to make this type of ruling. We include ourselves in that assessment.

Furthermore, the standard indicates that “emotional distress” is one of the factors that could influence decision making. Experience managing complaints has demonstrated time and time again that both parties can and will exaggerate their position. This is especially common on the consumer side of the equation. It is human nature to do this. The vast majority of complaints managed by ADRs within the UK gambling sector are managed remotely. A court awarding damages of this nature has the facility to cross examine the claimant face to face before making any determination of the legitimacy of any claim of this type of distress. This is still an imperfect system, but offers a higher degree of reliability than remote assessment. The reliability of any assessment of emotional distress made remotely would to our mind be highly questionable.

There is also massive scope for inconsistency in actions taken by ADRs in this manner. Lack of prior experience to provide context and guidance in determining what appropriate compensation should be is almost guaranteed to result in different ADRs, or even different individuals within the same organisation, coming to substantially different conclusions. The document does encourage ADR providers to “agree an approach…. with each other” but setting aside the logistical issues of agreeing standards with competing businesses for situations that purportedly should be a rarity, the document also states “This means that in similar cases, providers may award different amounts of compensation – or award compensation for one case but not another”. Effectively the document both encourages consistency without providing guidance on how to achieve it and acknowledges that it would be acceptable for rulings for similar cases to diverge in their outcomes.

There is further risk where compensation related cases were to enter the public domain and other similar complainants see that they were or are being treated differently. This is likely to undermine public trust in the ADR system rather than reinforce it.

Finally, where claims are taken through the court system – even via the small claims track of the County Court system in England and Wales - compensation can be awarded to either party (see https://en.wikipedia.org/wiki/Small_claims_court#England_and_Wales and https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part-44-general-rules-about-costs#rule44.2), not just the claimant. Where a claimant is found to have brought an invalid claim the court has the authority to award expenses for a range of expenses incurred by the defendant. Less so for the small claims track, but there is scope regardless.

The ADR Guidance issued is very clear that compensation can only be considered for the consumer.

This stricture artificially creates an imbalance in the system that simply is not present in the count structures that ADRs are intended to provide an alternative to.

While this is no doubt a good thing for consumers and there is an inherent risk of damaging public perception of the ADR system if consumers were to potentially face receiving rulings that award damages to the operator, distorting the balance of the parties in this manner undermines the integrity and impartiality of the system.

In our professional opinion, claims for compensation should be managed by the court system and not included within the scope of ADR services.

Complaint response time – Impacts players and operators

In the guidance clarification has been provided regarding the expectations of how long complaints should take to resolve:

“5.7 The ADR Regulations require ADR providers to provide parties to a dispute with certain information during the course of the dispute. The provider must:
• notify all parties to a dispute as soon as it has received all of the information that makes up the complete complaint file (see definition at para 3.3 and in glossary) ADR providers should note that the Commission’s guidance to gambling businesses recommends that businesses ensure that they respond to requests from ADR providers for information about disputes in full and within ten working days (though businesses can choose what information they provide). Businesses should not unnecessarily delay providing the information that the ADR provider requests. Where the business delays in providing information without reasonable explanation, the ADR provider should consider reporting the matter to the Commission.”

Previous requirements on this issue were that rulings were to be provided within 90 days of receipt of the “complete complaint package”. The issues with this terminology is that what constitutes the complete complaint package is open to interpretation. Beyond this, once all evidence is gathered from both parties (what reasonably would appear to be the ‘complete complaints package’) it would be a very unusual case that required a further 90 days to review. The time consuming part of complaint management is generally the data gathering and this is further exacerbated when one party or the other takes excessive time to provide requested information. As such there was no hard line on how long a complaint should take to process.

It has been the policy of this service to date to consider the 90 days to start from the point where the operator is informed of the complaint, striving to achieve a resolution within 90 days of the operator being notified of the complaint. This is beyond even the strictest standards set by the new guidance. Nevertheless, placing the onus on the operator to offer a reasoned response within 10 business days of receiving a request will no doubt significantly improve response times for players.

Further to this:

“ADR Provider gives status update at end of each 30-day period (if no automatic updates or other updates have been provided)”

It has been the policy of this service to date not to offer updates unless we have something new to share with the complainant. With a large case load of complaints requests for updates can be time consuming to manage and return little in the way of tangible results when there is not new information to share – time spent working on this type of communication is time not invested managing the complaint caseload. However, we do appreciate that the Gambling Commission are endeavouring to improve user experience via reassurance with this requirement, even if it ultimately serves to slows the end result.


“5.9 In summary, under the new standards we expect ADR providers to:
• acknowledge receipt of the consumer’s initial contact within 3 working days. This may be done as part of the requirement to notify the consumer of their right to withdraw, and of their rights around independent legal advice, as per the requirements of the ADR Regulations.”

The above sets a standard requiring ADRs to acknowledge a complaint submission within 3 working days. This would be in line with our current policies.