Enforcement of Customer Interaction Guidance

Request

Under the Freedom of Information Act 2000, I request the following information regarding the Commission's enforcement of its own Customer Interaction Guidance(SR Code 3.4.1) for premises-based operators:

1. Implementation verification:

• Specific procedures used by Commission inspectors to verify that operators are making "meaningful records of all interactions with customers" as required in your guidance
• Methodology used during inspections to confirm operators are using "a range of indicators relevant to your business" beyond financial indicators
• Documentation of how inspectors verify that staff are properly trained "to identify the signs of harm" as required in your guidance
• Any templates, checklists or assessment tools provided to inspectors for evaluating compliance with SR Code
• Copies of inspection protocols that demonstrate how compliance with customer interaction requirements is verified in practice

2.Anonymous play compliance:

• How the Commission reconciles its requirement that operators "make meaningful records of all interactions with customers" with systems that allow completely anonymous play
• Any specific guidance provided to operators on how to comply with your interaction requirements when customers gamble without any form of registration
• Minimum standards for what constitutes "monitoring customer activity" in premises where customers can gamble without identification
• Any Commission analysis, reports or assessments on the effectiveness of customer interaction procedures in anonymous play environments
• Documentation of how operators are expected to identify "changing patterns of play" for customers who have no registered account or loyalty card

Response

Thank you for your request which has been processed under the Freedom of Information Act 2000 (FOIA).

In your email you have requested following information regarding the Commission's enforcement of its own Customer Interaction Guidance (SR Code 3.4.1) for premises-based operators:

1. Implementation verification:

• Specific procedures used by Commission inspectors to verify that operators are making "meaningful records of all interactions with customers" as required in your guidance
• Methodology used during inspections to confirm operators are using "a range of indicators relevant to your business" beyond financial indicators
• Documentation of how inspectors verify that staff are properly trained "to identify the signs of harm" as required in your guidance
• Any templates, checklists or assessment tools provided to inspectors for evaluating compliance with SR Code
• Copies of inspection protocols that demonstrate how compliance with customer interaction requirements is verified in practice

2. Anonymous play compliance:

• How the Commission reconciles its requirement that operators "make meaningful records of all interactions with customers" with systems that allow completely anonymous play
• Any specific guidance provided to operators on how to comply with your interaction requirements when customers gamble without any form of registration
• Minimum standards for what constitutes "monitoring customer activity" in premises where customers can gamble without identification
• Any Commission analysis, reports or assessments on the effectiveness of customer interaction procedures in anonymous play environments
• Documentation of how operators are expected to identify "changing patterns of play" for customers who have no registered account or loyalty card

For context, it should be noted that the Commission was set up under the Gambling Act 2005 to regulate commercial gambling in Great Britain in partnership with licensing authorities. We also regulate the National Lottery following a merger with the National Lottery Commission in 2013.

Section 22 of the Act sets out that the Commission has a statutory duty to promote the licensing objectives as laid out in section 1 of the Act, which are:

a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime,

b) ensuring that gambling is conducted in a fair and open way, and

c) protecting children and other vulnerable persons from being harmed or exploited by gambling.

Gambling operators are required to hold a licence from the Commission in order to offer facilities for gambling to customers located in Great Britain. Once an operator or individual holds a licence, the Commission seeks to ensure, through its compliance work, that the licensee remains suitable to hold licences and that they conduct themselves in a way which is consistent with the licensing objectives, the requirements of the Act, and the conditions of their licences and related codes of practice, both in letter and spirit.

The Commission will undertake compliance activity in a variety of ways. The Commission will provide advice to licensees to help them comply with the requirements of the legislation and the licence conditions and codes of practice which apply to them.

In its assessment of licensees, the Commission follows the risk approach and the risk ratings set out in the Statement of Principles.

The purpose of an assessment is to:

• ensure that the licensee remains suitable to hold a licence
• check that the licensee is conducting their activities in a manner which is consistent with the licensing objectives
• ensure that the licensee is complying with the requirements of the Act and relevant regulations
• ensure that the licensee is complying with the Commission’s Licence Conditions and Codes of Practice (LCCP) that apply to the licence held.

Assessments also offer an opportunity for the Commission to promote good practice, as well as offering licensees an opportunity to seek advice and to provide feedback to the Commission, which can be used to continually improve its processes and procedures.

More detail on the manner in which the Commission carries out its compliance activities can be found within the Licensing, compliance and enforcement under the Gambling Act 2005.

I can confirm that the Commission does hold further information falling within the scope of your request. Commission staff utilize a “workbook”, walking them through the steps to assess an operators compliance. This workbook broadly covers the elements within your request. However, not each element will be specifically named or categorised as such within the in scope information.

This internal guidance contains the level of detail used to assess whether a person or entity is fit to continue to hold a licence. Releasing such detail would reveal the methods and techniques the Commission uses as part of the assessment process. We are of the view that the disclosure of this information would prejudice the regulatory functions of the commission. As such, this information is exempt under section 31 of the FOIA.

Section 31

Section 31(1) provides that Information which is not exempt information by virtue of section 30 is exempt information if its disclosure under this Act would, or would be likely to, prejudice:

(g) the exercise by any public authority of its functions for any of the purposes specified in subsection (2)

The relevant purpose referred to subsection (2) is –

(d) the purpose of ascertaining a person’s fitness or competence in relation to the management of bodies corporate or in relation to any profession or other activity which he is, or seeks to become, authorised to carry on,

It is our view that the regulatory functions of the Commission, would be prejudiced by disclosure of this information as follows:

i) Prejudice to the Commission’s ability to fulfil its statutory functions by revealing details about how the Commission conducts its assessments, and

ii) Prejudice to the Commission’s ability to raise overall standards in the gambling industry by revealing which matters will be subject to a more detailed assessment, the resources that will be devoted to it and the methodology the Commission will use.

Undermining statutory functions

The information requested forms part of our licensee compliance assessment process. This document sets out the procedure that staff need to follow when assessing licensees ability to comply with the requirements of the Gambling Act, the LCCP and any other guidance provided by the Commission.

The release of our assessment process will have a direct impact on our statutory functions, by not only providing information to enable licensees to present information required as part of the assessment process in such a manner to remain licenced, but also undermining the process to determine the genuine suitability of licensees, which will ultimately impact on consumers.

The Commission considers that disclosure of the requested information would provide licensees with information that could be used to undermine and circumvent the assessment process and reduce the possibility of any non-compliance being detected by the Commission because they would have been informed of the particular areas of the assessment that the Commission directs its resources towards, the particular form and type of evidence required and conversely what evidence does not appear to be relevant to the Commission’s assessment. The Commission’s concern is that this would result in operators or individuals using the disclosed information to present information in a manner which would avoid further scrutiny

By releasing this document into the public domain, the Commission will be in a position where it will not be able to rely on the current process to assess licensees and would need to introduce further assessment processes which have not been disclosed to ensure that the assessment process remains robust and fit for purpose in order for the Commission to perform its statutory functions.

Raising overall standards in the gambling industry

The Commission also takes the view that disclosure is likely to reduce the overall standards in the gambling industry. Operators would be able to second guess or predict what specific matters that will be subject to a more detailed assessment, the resources that will be devoted to it and the methodology the Commission will use. Therefore, able tailor the information they present in a strategic manner which would deprive the Commission of information which would otherwise have been provided and which would be relevant to the Commission’s assessment of the operator.

The more information about how the Commission allocates its resources and the activities it is concerned with, added with information on how it goes about assessing licencees, the better able an unscrupulous organisation will be to make an accurate assessment of the likelihood of particular information coming to the attention of that regulator.

The Commission therefore concludes that the disclosure of this information would prejudice the regulatory functions of the Commission.

Public interest test

The factors the Commission has considered when applying the public interest test have been detailed below and our view is that the public interest lies in favour of applying the exemption.

Arguments in favour of disclosure:

• The Commission is a public body which is required to regulate the gambling industry in the public interest. There is therefore a public interest in members of the public having confidence the Commission is being open and honest with the information it holds so that it can be held to account. It is important that the public are assured that the Commission is carrying out its functions in ensuring that any individuals/organisations who are involved in providing gambling facilities to the public have undergone the necessary assessments and will uphold the licencing objectives ensuring that consumers are protected.
• Disclosure of the requested information could demonstrate to stakeholders and relevant parties how the Commission is assessing applications and, furthermore, this disclosure may encourage stakeholders to work with us and contribute to our programme of work, increasing confidence in the Commission as a regulator and its ability to uphold the law.

Arguments in favour of maintaining the exemption:

• The Commission has robust and effective processes and procedures in place which are utilised when assessing licensees. These procedures and processes have been put in place to minimise the risk of an operator continuing to hold a licence where they do not meet the required standards. This demonstrates to the public at large that they can have confidence in the Commission’s licence assessment processes.
• There is an expectation of confidence in much of the Commission’s work, particularly regarding the techniques used to ascertain if an operator should continue to hold a licence. It is the impact on this work of the Commission which is more likely to be affected by disclosure. The amount of information the Commission can release relating to our specific regulatory techniques which is directed at its staff who are assessing applications is limited as this could lead to potentially non-compliant operators altering their behaviour specifically to meet the Commission’s standards purely for assessment purposes. This in turn may impact on the Commission’s function of ascertaining a gambling operator’s fitness to carry out gambling activities.
• However, in order to promote transparency there is information that is publicly available, both on our website but also via our statement of principles for licensing and regulation which clearly sets out the required standards that operator licensees are expected to comply. Therefore it is our view that there is sufficient information publicly available about the assessment process and assessment framework to adequately address the public interest in transparency in respect of this matter. The Commission also publishes other information in relation to how it assesses licensees, including its Licensing, compliance and enforcement under the Gambling Act 2005 document, providing information about assessing operators. Therefore, to the extent that there is a public interest in transparency around the assessment of licensees this is already met by the material the Commission proactively publishes.
• Disclosure of this information would also undermine the Commission's ability to uphold the licensing objectives which would impact on the trust and confidence of the public in it as a regulator.
• Further, disclosure of the requested information would prejudice the outcome of future assessments by the Commission by exposing assessment techniques and practices to the detriment of the public interest.

Weighing the balance

The Commission acknowledges that there is a public interest in promoting the accountability and transparency of public authorities and the importance of having sufficient information in the public domain to support consumers with their choice of operator, however, disclosure of the information would be damaging to the Commission as a regulatory body which ultimately serves to protect the wider public interest.

It is important that the public are assured that the Commission is carrying out its functions in ensuring that any individuals/organisations who are involved in providing gambling facilities to the public have undergone the necessary assessments and will uphold the licencing objectives ensuring that consumers are protected.

However, there is a strong public interest in preserving the processes that the Commission has in place to assess operators and identify any licensees who are unable to comply with the licensing requirements. The public trust that the Commission has robust processes in place to assess operators so that when they use the services provided by an operator, they are confident that there has been sufficient scrutiny of that operator to ensure that they are protected. If this information were released it would undermine that confidence.

Looking at all the circumstances of the case and the nature of the request, the Commission considers that the relevant prejudice identified above would be caused to the Commission by disclosure and this weighs in the balance when considering the question of public interest. Public knowledge of this internal document is very unlikely to contribute to a proper understanding of the regulatory activities of the Commission. There is sufficient information already published on our website about our compliance processes to satisfy the public interest in this matter.

We consider that the public interest is better served by withholding the assessment documentation ensuring that consumers are protected through our processes rather than releasing information about our processes which in our view will not benefit the public as a whole.

Review of the decision

If you are unhappy with the service you have received in relation to your Freedom of Information request you are entitled to an internal review of our decision. You should write to FOI Team, Gambling Commission, 4th floor, Victoria Square House, Victoria Square, Birmingham, B2 4BP or by reply to this email. 

Please note, internal review requests should be made within 40 working days of the initial response. Requests made outside this timeframe will not be processed.

If you are not content with the outcome of our review, you may then apply directly to the Information Commissioner (ICO) for a decision. Generally, the ICO cannot make a decision unless you have already exhausted the review procedure provided by the Gambling Commission. 

It should be noted that if you wish to raise a complaint with the ICO about the Commission’s handling of your request for information, then you are required to do so within six weeks of receiving your final response or last substantive contact with us.

The ICO can be contacted at: The Information Commissioner’s Office (opens in a new tab), Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.

Information Management Team
Gambling Commission