LeoVegas incurs £627,000 penalty package for marketing and self-exclusion failings

LeoVegas is the latest online gambling operator to be penalised by the Gambling Commission for failings relating to misleading advertising and the handling of customers at the end of their self-exclusion period. The LCCP provisions breached by LeoVegas were as follows:

Marketing

  • Marketing communications must state significant limitations and qualifications – SR code provision 5.1.7(2) and 5.1.7(2)(a)
  • Responsibility for third parties – SR code provision 1.1.2

Self-exclusion 

  • Preventing self-excluded individuals from participating in gambling – SR code provision 3.5.3(1) and Ordinary code provision 3.5.4(5)
  • Returning funds to customers who have entered self-exclusion agreements – SR code provision 3.5.3(5)

LeoVegas is to pay a penalty package of £627,000 (of which £600,000 is in lieu of a financial penalty and the balance represents a divestment of remaining funds received as a result of the failings and payment of the Commission’s costs). This follows a review of LeoVegas’s operating licence, in which the Commission found that LeoVegas:

  • was responsible for 41 misleading adverts,
  • failed to return funds to 11,205 customers when they chose to self-exclude and close their account,
  • sent marketing material to 1,894 people who had previously self-excluded and
  • allowed 413 previously self-excluded customers to gamble without speaking to those customers first or applying a 24-hour cooling off period before allowing them to gamble,

Neil McArthur, the Gambling Commission’s Chief Executive has said: “The outcome of this case should leave no one in any doubt that we will be tough with licence holders who mislead consumers or fail to meet the standards we set in our licence conditions and codes of practice. We want operators to learn the lessons from our investigations and use those lessons to raise standards.”

The full public statement (that can be downloaded below) contains the following good practice questions that the Commission recommends remote operators should consider to avoid similar issues arising:

  • Do you understand the marketing rules outlined in your licence conditions and the CAP codes? How do you keep up to date with, and implement, CAP advice and ASA rulings? Do you train staff in them?
  • Do you make use of the CAP Copy Advice service
  • Do your internal marketing sign off procedures include a compliance check?
  • You are responsible for your affiliates. How do you vet and monitor them to ensure they operate compliantly? How frequent are your audits of their activity? What are the contractual consequences for them failing to comply?
  • Do your self-exclusions remain effective at the end of the chosen period? Are your self-excluded customer data sets sufficiently segregated, until such time as positive action is taken? How do you meet best practice set out in the ordinary codes?
  • Do you make use of all available information, including complaints, to identify potential procedural weaknesses?
  • How promptly do you return funds to a self-excluded customer? What do you do with balances which cannot be returned? Are they divested?
  • Can you demonstrate that you embed learning from public statements and other available sources?

Update: It is interesting to note that, following imposition of the above-mentioned penalty, LeoVegas was not slow to: