The UK Gambling Commission has called for a consultation on new guidance on social responsibility measures and customer interaction, but could it lead to more confusion? Pavlos Sideris at Double Up Media dicusses.

The new interaction rules and guidance are designed to ensure that operators act when consumers exhibit signs of gambling harm and indicate at-risk behaviour. It aims to better protect the 2.2 million people in England who, according to the UK Health Security Agency, either have a gambling addiction or are at risk of one. 

Andrew Rhodes, CEO of UK Gambling Commission, stated: “Time and time again, our enforcement cases show that some operators are still not doing enough to prevent gambling harm. These new rules…make our expectations even more explicit…We expect operators to identify and tackle gambling harms with fast, proportionate, and effective action.”

According to the Commission, the guidance is required because operators have either been failing to act or too slow to intervene when red flags were displayed. 

This has culminated in a year that’s seen record-breaking fines issued from the Commission: 

  • BetVictor was fined £2m in February for failings in “equitability, social responsibility, and anti-money laundering measures”,
  • Genesis Global breaching social responsibility and AML commitments received a £3.8m fine (in one case a consumer deposited £1.3m before any “source of fund” checks were conducted, Genesis Global’s licence was suspended),
  • 888 was sanctioned £9.4m for multiple failures, including social responsibility and allowing customers to make deposits they could not afford; and lastly, 
  • Entain (one of the UK’s largest operators) was hit with a £17 million fine for social responsibility and anti-money laundering failures, including allowing self-excluded players to join multiple sites operated by the brand.

This isn’t to paint an unduly negative picture of operators, but the fact that some of the UK’s most prominent licensees are acting in contravention of their social responsibility commitments points to significant problems and, therefore, the need for more controls to guide how and when licensees interact with consumers.

In addition, with 60% of industry profits coming from 5% of players who are already problem gamblers or are at risk of becoming addicted, the Commission wants to ensure as many measures as possible are put in place by operators to protect those players. However, the guidance, which licensees were initially meant to implement in September 2022, is confusing, leading to the delay in the implementation of points 2, 3 and 10. 

What do the new rules say?

The new rules are only for remote licence holders and say operators must:

  • “monitor a specific range of indicators, as a minimum, to identify gambling harm
  • flag indicators of harm and take action in a timely manner
  • implement automated processes for strong indicators of harm
  • prevent marketing and the take-up of new bonuses for at-risk customers
  • evaluate their interactions and ensure they interact with consumers at least at the level of problem gambling for the relevant activity
  • evidence their customer interaction evaluation to the Gambling Commission during routine casework
  • comply with these requirements at all times; this includes ensuring the compliance of third-party providers.”

While the rules build on the framework of many operating conditions already enshrined in the Commission’s LCCP, they add extra responsibility on operators. The rules were followed shortly after further guidance from UKGC to assist operators in implementing them. In the guidance (a 28-page document covering the 14 rules/requirements), the Commission explains each, what the aim is, its expectations and additional advice.

The consultation period does not apply to the entire guidance, only parts 2, 3 and 10. We will look at the two causing the most confusion for operators – 3 and 10. 

Operators must know more about players and vulnerability

Requirement 3: “Consideration of the factors that might make a customer more vulnerable to gambling harms and implementation of systems and processes to take action where such vulnerability is identified”.

The Commission includes a definition of vulnerability in the guidance as; “somebody who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”. It also lists examples of situations likely to make players more vulnerable; “health, capability, resilience, or the impact of a life event such as a bereavement or loss of income”.

Firstly, while the Commission defines vulnerability, it is a broad definition, and operators may struggle with it, especially understanding (this will be pivotal for staff training) and implementing. Once understood, there is also the question of how remote operators will access this type of information on consumers from the point of sign-up (as the guidance asks, the interaction model and flagging on harms starts from the moment a player joins a site). 

Additionally, there is the question of the right to privacy. For example, are operators to ask consumers questions regarding their health and bereavement status? And if not, how can operators assess vulnerability based on their current access to information gathered from AML checks, i.e. bank data and player behaviour built up over time.

Rather than flagging harms, the new interaction system required by operators needs to be a far more comprehensive system that allows a complete view of each player’s activity and vulnerability and, based on the level of risk, tells the operator how to interact with the player. It is questionable how achievable this is, and it highlights ever-growing privacy concerns for players (particularly in the backdrop of the Gambling Review, which may introduce affordability checks).

Marketing of Bonuses

Requirement 10: “Prevention of the marketing and take up of new bonus offers where strong indicators of harm have been identified.”

According to the new interaction guidance, those exhibiting strong indicators of harm must not be allowed to take up bonus offers; they can also have bonuses removed or withheld. This requirement has caused considerable confusion for operators, especially in light of preceding guidance published in February 2022 by the Commission regarding fair bonus terms and conditions, noting for the first time that wagering requirements may encourage excessive play.

At Double Up Media we believe one way to encourage and increase player safety levels is to focus on fairness for players and consumers generally. We do this by only promoting bonuses without wagering requirements as these not only prevent the confusion surrounding complicated terms and conditions, but also means that players aren’t forced to continue wagering beyond a point that would be sensible to stop and cash out.

The Feb 2022 guidance contradicts the new instructions in that it says operators must address the following:

  • terms that allow licensees to confiscate customers’ un-staked deposits,
  • terms regarding treatment of customers’ funds where a licensee believes there has been illegal, irregular or fraudulent play,
  • promotions for online games that have terms entitling a licensee to void real money winnings if a customer inadvertently breaks staking rules,
  • terms that unfairly permit licensees to reduce potential winnings on open bets.

The new guidance allows operators the discretion to remove bonuses based on strong indicators of harm, although these are not predefined because they should be considered on a case-by-case basis. 

However, operators are still unclear on how they will communicate this condition clearly to consumers in their terms and conditions. It might also lead consumers to ask how the terms can be fair when the operator holds the final decision over whether to grant them access to bonuses. 

Increasing Public Pressures

At the same time that operators are left to understand and implement the new rules while dealing with complex and abstract concepts like vulnerability, there is ever-increasing pressure to get it right. 

In addition, while the Commission’s expectations are evident, the onus of implementation is on operators and although the consultation period allows further discussions on potential solutions to challenges, these are yet to be moved out of the formal guidance layout and put into practice. 

Moreover, with some regulations in force while others are not, operators have had to stagger their integration, which has led to more confusion as there is no complete view of what is required.