For the first entry to our weekly SMP Snack series, the firm’s Manager of Regulatory Compliance Jenny Hedges analyses the increasingly complex operator-affiliate relationship

The scaling back or cancelling of affiliate programs by Skybet, 888, and operators like them has starkly highlighted the regulatory pressures bearing down on the gambling industry, and particularly its player acquisition methods.

Coupled with record fines for breaches by operators and claims in the Guardian of dubious practices by affiliates, this year has been marked by increased scrutiny of both licensed and non-licensed members of the industry.

The most recent development in this trend has been the UK Gambling Commission (UKGC) update to its Licence Conditions and Codes of Practice (LCCP), which came into effect on 31st October. As the name would suggest, normally this would only impact on licensed operators, but not anymore. The social responsibility code provision (1.1.2) has been updated with a requirement for operators to take responsibility for the actions of their affiliates. Specifically:

“Licensees are responsible for the actions of third parties with whom they contract… including for affiliates where they have breached a relevant advertising code of practice.”

The UKGC has been clear that it is willing to issue enforcement measures to operators for breaches by their marketing partners. With recent fines playing on their minds, operators’ management teams are understandably turning their attention to the compliance of their partners.

The natural place to start will be advertising standards, but it won’t stop there: operators that have spent fortunes building stringent ‘compliance cultures’ will be looking for similar standards in those they work with, covering everything from advertising standards to data protection and responsible gambling awareness, and all the painful detail in between.

I can sympathise with affiliates for whom this is difficult news. There is a lack of guidance tailored towards affiliates out there, making it difficult to drive change. That’s one reason we built our eLearning platform, it’s why we’re increasingly advising affiliates on compliance matters, and it’s why for the next several weeks we will tackle one compliance area a week from the viewpoint of an affiliate – so stay tuned!

There is, however, a silver lining. Those affiliates who embrace a broad culture of compliance that aligns with that of the leading regulators and operators will quickly find it becoming either a unique selling point in a competitive marketplace or a common standard, depending on wider uptake. Compliance may be difficult, but it will soon be essential to maintain and enhance your market position.