Don’t gamble with data protection – betting industry comes under ICO spotlight
The UK Information Commissioner's Office (ICO) has announced an investigation of more than 400 companies suspected of using people's personal details to promote online gambling websites. This is part of a wider inquiry into the use of personal data by the gambling sector as a whole.
The move has been triggered by a string of complaints to the ICO from private citizens who have received unsolicited text messages from gambling service providers.
The regulator has required the companies concerned to produce information relating to how they obtain and use people's personal details, as well as how they send marketing texts. This includes where they got people's personal information from and how many texts they sent.
The ICO has indicated that it expects strict compliance from these companies and that it will not be an excuse if the company has delegated the processing of personal information to an external supplier. Indeed, the ICO considers that the complaints could have originated from practices around "affiliate marketing", which occurs where firms offer to pay organisations that bring them new customers, sometimes leading to a situation where neither party is taking any responsibility for complying with the rules.
The Regulator has further suggested that the inquiry could culminate in its taking enforcement action. That could include criminal prosecution, non-criminal enforcement and audit and financial penalties fine of up to £500,000. If businesses do not respond to the request for information, the ICO can use its powers to demand the information to be provided.
This is not the first time the gambling industry has come under the spotlight for data compliance issues. In 2012, the activist group Privacy International made allegations that online gaming companies were setting up in offshore tax havens such as Gibraltar, Malta, Jersey, the Isle of Man, Antigua and Barbuda, and Guernsey in part to exploit the weaker privacy regulation in those jurisdictions.
Privacy International also called upon the ICO to do more to monitor the activities of gambling companies; a complaint that it filed then with the ICO against gambling companies was closed after three months. This stands in stark contrast to serious inroads which the ICO is now making into policing the industry.
The investigation is not only a wake-up call to the gambling industry but to businesses as a whole. When certain companies in any sector are under pressure to maintain margins may be prepared to cut corners to find new customers. The clear message from the ICO is that this is a high risk strategy. Companies must seek advice on practices such as affiliate marketing and conduct careful due diligence on suppliers who will carry out data processing activities on their behalf.
Failure to do so could be a false economy that is ultimately outweighed by a heavy fine.
This article was written by Paul Henty. For more information, please contact Paul on +44 (0)20 7427 6506 or at email@example.com
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