General Data Protection Regulation

The new General Data Protection Regulation (“GDPR” or the “New Regulation”) entered into force on 24 May 2016, but its enforcement has been suspended for 2 years to allow personal data processors to align their activity to the new standards in this sector.

The amendments brought by the New Regulation are sizeable and bold, with significant implications particularly for the online B2C service industry. As of 25 May 2018, the new data protection rules will be directly applicable to all EEA Member States. Given the high penalties provided for non-compliance with the new legislative framework, enhanced attention must be paid to this topic.

Before describing the implications for the Ro­manian gambling industry, mention should be made that personal data are more than mere identification elements (i.e., name, forename, identification number, user, location data, IP or MAC addresses). Personal data are defined as “any information concerning an identified or iden­tifiable natural person”, which includes player’s conduct and history on the platform, gaming pre­ferences, player’s financial status or other ele­ments which, together or individually, may lead to the identification of such natural person. The New Regulation provides for new standards on how to collect, store, disclose and transfer such data.

Personal data processing is a significant com­po­nent of how online gambling services are provided to players, as players’ data are processed both when they open a game account and throughout the period when they are active on the gambling platform. Players’ conduct on the platform is often monitored in view of improving the services which are being delivered and thus personal data acquire an ever-larger value for operators.

GDPR’s implications are complex and may vary significantly from one controller to another, depending on the collected and monitored data, the current architecture of the data processing automation systems or the B2B relationships with other providers of specialised services for the online gambling market acting as controller’s data processors (this is applicable to controllers outsourcing the services of risk management, player profiling or transfer of databases con­cer­ning player’s activity on platforms independent from controller’s platform, such as SaaS imple­men­tations where the service provider also provides processed data hosting services).

For reasons of conciseness, we will summarize below only 4 of the most important amendments with significant implications for the Romanian online gambling operators.

1. The right to data portability

According to GDPR, players shall have the right to receive their personal data, which they have provided to a controller (i.e., including the gambling history, the financial condition or other data which are frequently monitored by the controller), in a structured, commonly used and machine-readable format. Also, the player shall have the right to transfer such data to another controller without (technical or financial) hindrance from the controller to which the personal data have been initially provided.

Besides the significant costs that controllers will have to bear to implement a technical solution in line with GDPR, this right could also involve commercial risks or advantages, as the case may be. New controllers will be able to target players from other platforms by offering attractive bonuses to convince them to exercise the right to data portability, similarly to what happened after the portability of mobile phone numbers was implemented. Established controllers will be forced to develop attractive customer loyalty schemes for the players registered on their gambling platforms.

2. Obtaining player’s consent

The New Regulation provides for new standards to obtain player’s consent for the processing of his/her personal data. So far, the information on personal data processing was provided in the Terms and Conditions globally accepted by the player when opening a new account. According to GDPR, the consent of the data subject will have to consist in a “freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, equals agreement to the processing of personal data relating to him or her”.  If player’s consent is given in the context of a written declaration which also concerns other matters (i.e., T&Cs), the request for consent shall be presented in a manner which is clearly distinguishable from the other matters, in an intelligible and easily accessible form, using clear language. One way to implement it could be an additional checkbox when opening the gaming account, whereby the player accepts the data processing policy distinctly from the other general terms that he/she accepts. The controller must also allow the players to withdraw such consent at any time. Failure to comply with these rules will invalidate player’s consent and the controller risks significant fines.

3. Penalties

GDPR also brings significant changes as to the prevention of and the penalties against activities which do not comply with the new standards of data protection. Supervisory authorities (in Romania – the National Supervisory Authority for Personal Data Processing – ANSPDCP) may apply penalties up to EUR 20,000,000 or up to 4% of the total worldwide turnover of controller’s group, whichever is higher.

Given that potential penalties are extremely high, gambling operators should make their best efforts to reach a compliance level in line with the new GDPR provisions.

4 Appointing a data processing officer

All data controllers having as core activities “operations which, by virtue of their nature, their scope and/or their purposes, require regular and systematic monitoring of data subjects on a large scale” must appoint a data processing officer (“DPO”). Obviously, online gambling operators meet this criterion, as the large-scale monitoring of players is a basic component in the industry.

The DPO will play an important role in the controller’s activity, as officer in charge with monitoring the proper implementation of GDPR standards and controller’s processing activity in order to identify any risks or breaches. The controller must provide the DPO with the resources necessary to carry out those tasks and access to personal data and processing operations, and to keep his or her expertise up-to date.

Noteworthy, GDPR allows data controllers to outsource such services to third-party specialists. It is possible to contract lawyers or data security and protection specialists. Also, international controllers may appoint one DPO per group.

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