New Gambling Commission Customer Interaction Rules: At Risk Customers

Introduction

On 14 April 2022, the Gambling Commission (the Commission) published its response (the Response) to the Remote Customer Interaction Consultation (the Consultation). The Consultation began on 3 November 2020 and closed on 9 February 2021 with the Commission receiving around 13,000 responses from a range of stakeholders including gambling businesses, academics, and people with lived experience of gambling-related harm.

The Response introduces an updated social responsibility code provision 3.4.3 (the New Provision) in the Licence Conditions and Codes of Practice (LCCP). This provision will take effect from 12 September 2022 and will apply to all remote operating licences granted by the Commission, except for any remote lottery licence the holder of which does not provide facilities for participation in instant win or high frequency lotteries, remote gaming machine technical, gambling software, host, ancillary remote bingo, ancillary remote casino, ancillary remote betting, remote betting intermediary (trading rooms only) and remote general betting limited licences.

Until the New Provision takes effect, the existing provision 3.4.1 of the LCCP will continue to apply. From the 12 September, provision 3.4.1 will continue to apply only to operators that are excluded from the New Provision.

The New Provision

The Commission described the New Provision as ‘stronger and more prescriptive’ and will require operators to:

1. monitor a specific range of indicators to identify vulnerability to gambling harm from the point when an account is opened, including (as a minimum):
   1. 1. customer spend;
      2. patterns of spend;
      3. time spent gambling;
      4. gambling behaviour indicators;
      5. customer-led contact;
      6. use of gambling management tools; and
      7. account indicators;
2. have in place effective systems and processes to monitor customer activity, flag indicators of harm and take action in a timely manner;
3. tailor their interactions to the nature of the indicators of harm, including rapid escalation of action where early stage action has not “had the impact required”, and ending the business relationship “where necessary”;
4. implement automated processes for strong indicators of harm, including preventing marketing and the take-up of new bonuses for customers where strong indicators of harm are identified, but also manually review those automated processes and allow the customer to contest automated decisions which affect them;
5. evaluate the effectiveness of their customer interaction, and be able to evidence their customer interaction evaluation to the Commission during routine casework;
6. take account of problem gambling rates for the relevant gambling activity as published by the Commission, in order to check whether the number of customer interactions is, at a minimum, in line with this level; and
7. comply with these requirements at all times, including by ensuring the compliance of any third party providers.

Further guidance (the New Guidance) will be issued “by early June” to assist operators to understand and comply with the New Provision.

The Commission’s Chief Executive, Andrew Rhodes, hopes that the New Provision will ‘make [the Commission’s] expectations even more explicit’ and that ‘tough action’ will be taken on operators who fail to take ‘fast, proportionate and effective action’ to tackle gambling harm in their customers.

The New Guidance

The New Guidance will aim to ensure operators understand and comply with the new requirements. The Commission has said that they will engage with operators to ensure the New Guidance takes account of any queries received.

One obvious question relates to point 6 above, in respect of which the Commission states that “it is manifestly a failure if the numbers of customers being identified is lower than the problem gambling rates for the products.” Not only does this assume that the “problem gambling rates” used by the Commission must be correct, if it is applied at a per-operator (rather than overall industry) level then those operators whose customer bases are weighted more towards leisure gamblers who are less vulnerable to gambling harm, and who (correctly) identify that they have a below-average number of at risk customers, would automatically be deemed by the Commission to have “manifestly failed” in their duty. This would seem a bizarre outcome.

Next Steps

The New Guidance will be published in June with the New Provision taking effect from 12 September 2022. The New Provision is just one of the many ways in which British gambling regulation is currently changing. Following recent changes to advertising rules, the Commission is continuing to work with the Government on its review of the Gambling Act 2005, and will also consult on the following three issues: (i) unaffordable binge gambling; (ii) significant unaffordable losses over time; and (iii) failure to identify consumers who are particularly financially vulnerable.