Remote Gambling Licence Operators may wish to take advice from our gambling lawyers to seek to protect their businesses during times or regulatory change. Whether currently holding a licence or applying for a remote gaming licence, call us for a free consultation today on 0800 170 1538.  The Gambling Commission’s revised guidance on customer interaction for remote operators took effect on 12 May 2020.  

Fresh measures follow new data  

Following on from industry guidance issued by the Betting and Gaming Council (“BGC”) and the Gambling Commission (“Commission”), along with the intervention of the gambling minister over concerns regarding the protection of online gamblers during the Covid lockdown the Commission have implemented additional mandatory requirements on operators.  

The industry was not consulted on these changes despite them being linked to a social responsibility code. Although the guidance itself does not strictly form part of Social Responsibility Code 3.4.1, the code does require both remote and non-remote operators to take into account the Commission’s guidance on customer interaction. The Commission did, however, consult on the proposed guidance as part of the consultation in relation to the changes implemented to the code provision itself back in the early part of 2019. 

The Commission has published a series of immediate operator requirements around customer interventions, player monitoring, due diligence and affordability checks. The Commission justifies the measures by pointing to industry data and YouGov survey taken on 16 and 17 April 2020 from which the Commission concludes that some gamblers may be at greater risk of harm during the lockdown. However, the industry data cited is for the months of March 2019 and March 2020 and therefore only covers the first week of the lockdown. Included in the Commission’s new guidance is the need for affordability checks, prevention of reverse withdrawals and restrictions on bonus offersThe industry data cited actually shows a reduction of reverse withdrawals in March 2020  compared to March 2019 (with the number of customers requesting reverse withdrawals reducing by 10%) and this actually reinforces the lack of consultation on the measures.  

The Commission states that the data collected shows that during the lockdown gambling participation is down and the evidence shows this is because of the closure of land-based venues and the cancellation of sporting events. However, there has been a clear increase in the use of certain gambling products such as online slots, poker, casino gaming and virtual sports.  The data also shows that in terms of time spent gambling, while overall session length has decreased, there has been an increase in the number of sessions that are played for over an hour. Although the data demonstrates that the majority of those gambling have not increased the time or money spent, the point that appears to have concerned the Commission most is that two-thirds of those who gambled on three or more products in the last four weeks (known as ‘engaged gamblers’) have increased the time or money that they are spending on at least one online gambling activity.  

Existing guidance published in July 2019 

In advance of the implementation of Social Responsibility Code (‘SR Code’) 3.4.1 in October 2019, the Commission issued its revised formal guidance on customer interaction in July 2019 which can be found in full here.   

These measures took effect from 31 October 2019 and require licensees to take into account the Commission’s guidance on customer interaction. This guidance is structured along the three key outcomes operators will be expected to meet: to identify – interact – evaluate. 

Identify 

Under identify requirements operators must know the types of markers and behaviours that could indicate harm relevant to online gambling, and how to spot when those indicators should trigger an interaction. A range of indicators relevant to their business must be used and they should not rely on financial indicators alone. Indicators to watch out for include affordability and a change in a customer’s personal circumstances. 

Interact 

Under the interact guidelines operators that are concerned a customer may be experiencing harm, must act early and quickly to help stop or prevent the harm worsening. All reasonable efforts should be made to make contact and interact with a customer, and find out what impact your interaction had. Importantly this may include refusing service or ending the business relationship. Interaction consists of 3 parts:  

  • Observation – behaviour or activity you have spotted or something the customer tells you. 
  • Action – contact to prompt the customer to think about their gambling, for you to find out more, and an opportunity for you to offer information or support. 
  • Outcome – what you or the customer did next. In some cases, you may need to monitor the customer’s gambling to spot any change which may prompt further action. 

Evaluate 

With regards the third principle of evaluate, the Gambling Commission mean to understand impact and effectiveness in two ways: did an individual customer interaction have a positive outcome for the customer, and does your overall approach to customer interaction work? 

The new measures at a glance 

 In light of the Covid-19 pandemic and associated lockdown the Commission has now added further requirements to its guidance on Licensees interacting with customers in a way which minimises the risk of customers experiencing harms associated with gambling. As set out in SR Code 3.4.1, this must include: 

  • Identifying customers who may be at risk of or experiencing harms associated with gambling. 
  • Interacting with customers who may be at risk of or experiencing harms associated with gambling. 
  • Understanding the impact of the interaction on the customer, and the effectiveness of the Licensee’s actions and approach. 

Licensees must therefore now also ensure they have the following additional measures implemented into their customer interaction framework for the purposes of preventing gambling related harm: 

a)       Review all thresholds and triggers used to track vulnerability to ensure that they reflect changed financial circumstances that many consumers will be experiencing. An emphasis should be placed on those thresholds and triggers being proactively reset on a precautionary basis to ensure customers with emerging vulnerability, such as increased time spent at play or increased spend can be identified

b)      Specifically review time indicators to capture play in excess of 1 hour in a single session and interact with those customers as this is a proxy for potential harm.

c)       Review additional and modify existing thresholds and triggers for new customers reflecting an operator’s lack of knowledge of those individuals’ play and spend patterns.

d)      Implement processes that ensure the continual monitoring of their customer base, identifying customers whose patterns of play, spend or behaviours have changed in the last few weeks.

e)      Conduct affordability assessments for individuals picked up by existing or new thresholds and triggers which indicate consumers experiencing harm, limiting or blocking further play until the checks have been concluded and supporting evidence obtained.

f)        Prevent reverse withdrawal options for customers until further notice.

g)       Stop bonus offers or promotions to customers displaying indicators of harm.

The Commission conclude that these additional measures, in knowing and identifying customers at risk of or experiencing harm, and acting early and quickly could help stop or prevent the harm from worsening. 

Reaction from the Regulator and the Government 

With a radio and TV advertising ban announced by the BGC during a Parliamentary hearing discussing ways operators could limit problem gambling during the pandemic, these evolving measures continue to reinforce the political pressure being applied on the industry. There has been a building consensus during the pandemic from Parliament, Government and the Commission that operators must pay particular attention to their social responsibility obligations. 

Commenting on the tougher measures, Chief Executive of the Commission Neil McArthur said, ‘’We will continue to monitor and publish the data that we are collecting and we will take further measures if required. We are monitoring online operators closely and if we see irresponsible behaviour we will step in immediately, suspending licences if we need to.”    

Sports Minister Nigel Huddleston hinted the government are prepared to go even further if current play patterns continue on the same trajectory, “It is vital that people are protected from the threat of gambling related harm and I welcome these latest steps from the Gambling Commission.  We will continue to monitor the situation closely and will not hesitate to take further action if required.” 

How will this impact the industry? 

The new guidance adds important additional requirements to the social responsibility measures prescribed by the Commission and a new emphasis has been placed on operators closely and continually monitoring players’ patterns of behaviour. Following a review of all thresholds and triggers used to track vulnerability, operators are now required to implement processes to trigger emerging vulnerability and continually monitor their customer base and identify customers whose patterns of play, spend or behaviour have changed since lockdown commenced.  They must also interact with any customer who is exceeding one hour of play in a single session and to stop bonus offers or promotions to customers displaying indicators of harm.  

The fresh measures were welcomed by FTSE operator GVC’s CEO Kenneth Alexander who commented: “We welcome the finding from the UK Gambling Commission that there is no evidence to suggest an increase in problem gambling during the COVID-19 lockdown.  Nevertheless, we remain committed to taking all necessary actions to keep our customers safe whilst they enjoy our products. That is why we continue to enhance our tools to track problematic play so that we can proactively interact with any player if we see changes that suggest they are having problems.” 

There have been several high profile operators found to be in breach of their wider social responsibilities and particularly in relation to their VIP customers. Indeed in a reported case on 28 May 2020 the Commission have published their findings in relation to an investigation into a number of serious failings in player protection by PT Entertainment Services (PTES), which unfortunately involved the death of a customer. The operator surrendered its licence but had it not been voluntarily surrendered the Commission have confirmed that it would have imposed a financial penalty of £3.5m and considered applying other regulatory sanctions. The Commission has also confirmed it is continuing to investigate the role played by key individuals who had worked at PTES and who still hold Personal Management Licences. 

The commission will shortly launch a consultation on strengthening social responsibility measures relating to game design, advertising and VIP customers.

The forthcoming review of the Gambling Act 2005 will undoubtedly also involve close scrutiny of the social responsibility obligations imposed on UK licenced operators. 

Remote Gambling Licence Operators may wish to take advice from our gambling lawyers to seek to protect their businesses during times or regulatory change. Whether currently holding a licence or applying for a remote gaming licence , call us for a free consultation today on 0800 170 1538.  

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