Consultation response
Autumn 2023 consultation – Proposed changes to LCCP and RTS - Socially responsible incentives: Consultation Response
This response sets out our position in relation to the consultation on socially responsible incentives
Proposal 3 - Proposed changes to Licence Conditions and Codes of Practice (LCCP) Social Responsibility (SR) Code 5.1.1 (Rewards and Bonuses) to make the structure and wording clearer
Licence Conditions and Codes of Practice (LCCP) Social Responsibility (SR) Code 5.1.1 (Rewards and Bonuses) sets out rules to ensure incentives are constructed in a socially responsible manner. We sought views on our proposal to make changes to the drafting and structure of LCCP SR Code to make it clearer and easier to understand.
We proposed to restructure it to set out what licensees must and must not do where they make such incentives available. We proposed to make minor changes relating to the tense and order of words, and to make the requirements regarding terms and conditions clearer. The proposed revisions also included the previous proposals on wagering requirements and mixing of products, so that it is clear how this would be presented if they were to be implemented.
We also consulted on the proposal to delete the current LCCP SR Code 5.1.1 1(b)(i) which currently states ‘neither the value nor amount of the benefit is dependent on the customer gambling for a pre-determined length of time or with a pre-determined frequency’. We consulted on new wording to make it explicit that licensees must ensure the design and structure of the incentive does not lead to excessive intensity of gambling which may risk customers experiencing harms associated with gambling.
Consultation questions
To what extent do you agree with the new structure and proposed wording of LCCP SR Code 5.1.1, excluding views on proposed requirements on wagering requirements and mixing of products which are dealt with above? Please give your reasons, including any evidence.
Do you have any comments on the new wording of 2 (b) which replaces LCCP SR Code 5.1.1 1(b)(i) which states ‘neither the value nor amount of the benefit is dependent on the customer gambling for a pre-determined length of time or with a pre-determined frequency’.
Respondents’ views
Most respondents agreed with the need to make changes to the structure, wording and the policy intent of LCCP SR Code 5.1.1. The comments were as follows:
- some commented this is necessary in the absence of a wider public health approach to reducing gambling harm
- some respondents suggested the need for tightening of rules on fair and transparent terms and conditions attached to incentives, specifically bonus offers. This included the introduction of a requirement to ban the use of terminology which implies that the offer is ‘free’ and claims that money can be won without risk
- most respondents representing the industry disagreed with the specific wording of the proposed requirement that licensees ‘must ensure the design and structure of the incentive does not lead to excessive intensity of gambling which may risk customers experiencing harms associated with gambling.’ Respondents sought clarification of the terms ‘excessive intensity’ and ‘harms associated with gambling’, calling for guidance on the meaning. It was noted that the proposed wording could lead to complications during compliance and enforcement activity, providing wide discretion in its application
- industry representatives also made references to the Regulators’ Code to support the need for guidance, which states that regulators should ensure clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply
- non-industry respondents also expressed some concerns about the need to define ‘excessive intensity’ because of potential for licensees to take advantage of less prescriptive rules.
Our position
We have considered the comments and will proceed with proposed changes to the structure and minor wording changes to the LCCP SR Code provision.
We agree with industry representations that the proposed wording requiring licensees to ‘ensure the design and structure of the incentive does not lead to excessive intensity of gambling which may risk customers experiencing harms associated with gambling’ poses a number of issues, including the difficulty in defining the term ‘excessive intensity’.
We recognise that there is a diverse range of incentives available in the market which makes it challenging to develop further principles that meet the policy intent, via LCCP SR Code 5.1. The challenge has been to find suitable wording that better reflects what is, or is not, acceptable, distinguishing between the innocuous and harmful incentives. The acceptability of an incentive depends upon the context in which it is offered or accepted, and on its impact on the licensing objectives. At this stage, we do not think that the provision of licensee guidance alone on this topic would provide a viable alternative.
Taking into account consultation responses, we will not proceed with proposed drafting of the requirement on licensees to ensure incentives are constructed in a manner that does not ‘lead to excessive intensity’ of gambling. Although LCCP SR Code 5.1.1 does not currently state which incentives or mechanics are likely to be socially irresponsible, there are controls and requirements already in place, within the Gambling Commission’s regulatory framework and advertising regulations, designed to address the risk of gambling harms.
Given that respondents did not disagree with the deletion of the current LCCP SR Code 5.1.1 1(b)(i) which states ‘neither the value nor amount of the benefit is dependent on the customer gambling for a pre-determined length of time or with a pre-determined frequency’, we will proceed with deleting this requirement.
In relation to other points raised by respondents, our position is as follows:
Use of terminology ‘free’ within incentives – respondents were concerned that this implies that the offer is ‘free’, and claims that money can be won without risk. The Committee of Advertising Practice (CAP) has banned gambling licensees from presenting offers as entirely ‘risk free’ and have published guidance on the use of “free” claims in advertising (opens in new tab). While “free” claims in general are not prohibited, they must not be presented irresponsibly.
The Regulators’ Code to support the need for guidance - we take our duties to consider the Regulators’ Code seriously and will do so in the event we take steps to propose further changes to the provision or publish guidance.
This consultation sought to prioritise action on 2 mechanics (wagering requirements and mixing of products withing incentives), but this does not prevent us from prioritising other mechanics that may be of concern, which may lead to us consulting on further revisions to this, or other marketing codes, at a later stage. We will consider potential further policy development work based on the outcome of evaluation on the impact of the following:
- all new rules on marketing
- development of the evidence base
- the outcome of our compliance and enforcement activity.
We have made a few minor changes to current wording of LCCP SR Code 5.1.1, for example, changing ‘the’ to ‘an’, and deletion of plurals. These changes have been made to improve the grammar, which is reflected in the final wording.
Previous wording of LCCP Social Responsibility Code 5.1.1 Rewards and Bonuses
- If a licensee makes available to any customer or potential customer any incentive or reward scheme or other arrangement under which the customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) (‘the benefit’) the incentive or reward scheme must be designed to operate, and be operated, in such a way that:
- the circumstances in which, and conditions subject to which, the benefit is available are clearly set out and readily accessible to any customer to whom it is offered;
- neither the receipt nor the value or amount of the benefit is:
- dependent on the customer gambling for a pre-determined length of time or with a pre-determined frequency; or
- altered or increased if the qualifying activity or spend is reached within a shorter time than the whole period over which the benefit is offered.
- if the value of the benefit increases with the amount the customer spends it does so at a rate no greater than that at which the amount spent increases; and further that:
- if the benefit comprises free or subsidised travel or accommodation which facilitates the customer’s attendance at particular licensed premises the terms on which it is offered are not directly related to the level of the customer’s prospective gambling.
- If a licensee makes available an incentive or reward scheme for customers, designated by the licensee as ‘high value, ‘VIP’ or equivalent, it hey must be offered in a manner which is consistent with the licensing objectives.
Licensees must take into account the Commission’s guidance on high value customer incentives.
Final wording
This requirement will come into force on 19 December 2025.
Applies to: All licences (including ancillary remote licences), except gaming machine technical and software licences.
LCCP Social Responsibility Code 5.1.1 Rewards and Bonuses
The following applies where a licensee makes available to any customer, or potential customer, an incentive or reward scheme or other arrangement under which a customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) (‘the benefit’).
Licensees must:
- Set out terms and conditions, in relation to an incentive, which are clear, transparent, and fair and readily accessible to any customer or potential customer to whom it is offered.
Licensees must not:
- Apply wagering requirements, which requires a customer to play through bonus funds, over a maximum of 10 times. A wagering requirement is where a customer is required to make wagers totalling a particular value for funds to become withdrawable.
- Include more than one type of gambling product (betting, casino, bingo, and lottery) within an incentive.
- Alter or increase the receipt or the value, or amount of the incentive if the qualifying activity or spend is reached within a shorter time than the whole period over which the benefit is offered.
- Construct incentives where, if the benefit comprises of free or subsidised travel or accommodation which encourages the customer’s attendance at a particular licensed premises, it is offered on terms that directly relate to the level of the customer’s prospective gambling.
If a licensee makes available an incentive or reward scheme for customers, designated by the licensee as ‘high value, ‘VIP’ or equivalent, it must be offered in a manner which is consistent with the licensing objectives.
Licensees must take into account the Commission’s guidance on high value customer incentives.
Proposal 2 - Ban mixing of products within incentives
Last updated: 4 April 2025
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