Upping the stakes on responsible gambling

Now that the anti-gambling lobby has won the battle over reduced stakes on FOBTs, attention has turned back to the online sector. Despite the rates of problem gambling remaining static at 0.8% of the UK population, this still leaves us with 340,000 or so problem gamblers. Therefore as identified by Tracey Crouch the then DCMS Minister, in her May 2018 review the next area of focus is the online sector, hence all the initiatives set out below.

This started with consultation and subsequent tightening of advertising related LCCPs to align with CMA and ASA changes on transparency and fairness of promotions, which came into effect on 31 October 2018. New CAP advertising codes aimed at further protecting children became effective on 1 April 2019. More recently new LCCPs provisions requiring age verification before free play access and depositing and ID verification before gambling, become effective on 7 May 2019. On top of this there’s an important ongoing consultation ending 9 May 2019, which amongst other things imposes more proactive requirements on operators to interact with customers in an effort to reduce problem gambling. LCCP changes coming on the back of this are likely to be in place by the end of the year, barring additional time needed for implementation of necessary technology. Finally as threatened by Tracey Crouch back in May 2018, attention is now turning to the use of credit cards as a factor in problem gambling, with a call for evidence by the Commission on such use (closes 16 May 2019).

Customer interaction is of paramount importance as a preventive measure. However it’s particularly difficult for an operator to get right as they must not only balance commercial needs to encourage responsible customer spend but also protect the customer by knowing more about them whilst not being so intrusive as to deter them engaging in this process in the first place. The proposed changes to the LCCP involve scrapping the existing codes (SR 3.4.1 and OR 3.4.2) and replacing them with a much more streamlined SR code which prescribes specific actions and outcomes based on the Commission detailed guidance. No doubt the Commission felt it had to take this action due to the inconsistent implementation of the existing code across the operator base. This now creates a level playing field, requiring all operators to invest resources in this area before the inevitable assessment and enforcement by the Commission next year.

The first step in player interaction is to identify customers who may be at risk. Operators are now specifically required to research relevant indicators of this in the context of their own business. They should review generic research in this area and conduct their own historical data analysis. As a result they will need to demonstrate effective monitoring programs. It will no longer be acceptable to document good intentions in policy and procedures, instead working models will need to be in place.

The second step is interaction itself. This should be consistent irrespective of time of day or night. Operators need to implement specific types of interaction, ranging from automated warnings (pop –ups, emails) to imposing limits or even suspending the customers’ accounts. Therefore a segmented and graduated approach needs to be in place with reliance on comprehensive staff training and supervision.

The third step of evaluation requires operators to analyse the effectiveness of their interactions and make improvements based on real data. It’s therefore essential to compare behaviours before and after measures are taken and have records to support this.

Credit card use is next in line for possible banning or restrictions following recommendations from the Responsible Gambling Strategy Board. This is despite the fact that customers can load e-Wallets with credit cards so circumvent this restriction, or even more alarmingly take out payday loans and overdrafts and continue to play irrespectively. It’s therefore important that the industry points out the fallacy of such an outright ban whilst at the same time negating the need to impose it in the first place by demonstrating their successful implementation of the player interaction measures.

At the end of the day the online sector has by its very nature much more real time information on player activity than the offline sector and therefore should be able to better detect and prevent problem gambling. It needs to use these strengths to create a safer and more sustainable environment, otherwise it may be lumped into the same treatment as the offline sector when it comes to imposing stake limits and pay outs.

Author: Andrew Tait has over 20 years of experience in betting & gaming, regulation and compliance, intellectual property and commercial contracts. Prior to joining Gordon Dadds in 2017, he was general counsel and chief compliance offer at Mansion Group for 10 years.