Changes to the licence conditions and codes of practice on age and identity verification for remote gambling
- Changes to the licence conditions and codes of practice on age and identity verification for remote gambling
Additional call for information - mandatory account limits
Our review of online gambling stated our intention to consult on requirements for licensees to set limits on customers’ gambling activity which could only be changed once the licensee had further verified information about the customer.
We are not proposing at this stage to introduce a specific licence condition or code to require mandatory account limits. However, we asked consultation respondents to provide us with information or evidence of good practice that helps licensees and customers to ensure gambling remains fair and safe. We asked for evidence both in terms of existing practice and what is possible, and which could later inform specific proposals on mandatory account limits to strengthen provisions for preventing gambling-related harm.
Consultation question 24:
What are licensees able to do to ensure they know enough about a new customer to assist them in preventing that customer from experiencing gambling-related harm?
The majority of consumers who responded to this question said that licensees could ask for financial information such as source of income or perform credit checks to assess how much a customer could afford to spend. A small number of respondents said that credit checks may not be appropriate and performing them could have detrimental effects on customers’ credit profiles. Some also thought that licensees could monitor a customer’s patterns of play. One respondent said that there is technology available to allow gambling behaviour and gambling transactions to be shared across different licensees, through open wallets.
The RGA noted that it is currently developing an affordability model for online licensees to use which would include thresholds and involve data sources such as individual economic data and socioeconomic data.
Some licensees advised that they could consider financial information found on ID verification searches. This could include any negative financial information such as CCJs, and a general credit score. Another licensee suggested performing an income check. One licensee raised concern that carrying out credit checks can leave a ‘footprint’ on a consumer’s credit file, and this can be detrimental to the consumer.
A handful of licensees are considering conducting problem gambling and general surveys, at account registration. One licensee suggested that this should however be preceded by a mandatory limit being set prior to gambling.
Another licensee suggested using data from the Office of National Statistics (ONS) to determine a median salary or disposable income for an area, to assess affordability. They suggested that this could be done if a customer sets a deposit limit or where deposits greater than £300 are made (which are monitored and investigated in real time by the licensee).
Consultation question 25:
What types of information are you able to access that could help inform you as to how much a new customer might be able to afford to gamble?
Most consumers responded that licensees could access information relating to a customer’s financial circumstances, such as showing bank statements, proof of income, and credit checks.
Third party providers suggested that licensees could analyse income and expenditure, with a number suggesting using socio-demographic data, or negative financial information to form an understanding of affordability. One provider explained that there is the ability to perform affordability checks through open banking. Another respondent said that a customer’s lifestyle could inform a licensee about how much they could afford to gamble.
A small number of licensees responded that they could access information from social media profiles to help inform them as to how much a customer could afford to gamble, specifically Twitter, Facebook, and LinkedIn. Licensees did note however that although they could use this data, the information gathered can be unreliable.
Other licensees suggested asking a customer for source of wealth and income, however not all mentioned how and when they would request this. Some highlighted the intrusion and restrictions of asking for this information, and others mentioned that this data would be asked for when a “customer exceeds a certain amount of money.”
One licensee stated that it had developed an algorithm which looks to predict an estimate for weekly disposable income based on ONS data; this is still being tested.
Consultation question 26:
How do you try to get to know a customer’s gambling preferences from a commercial perspective (for example, the markets they like to bet on, what days of the week they like to bet, whether they participate in betting and gaming) and can this information assist you in assessing the risk of the customer experiencing harm?
Some consumers were concerned that licensees could use this information to encourage people to gamble more.
Some responded that the analysis of betting patterns could help licensees to identify any markers of harm.
To understand a customer’s gambling preferences from a commercial perspective, one licensee uses RFM (Recency, Frequency, Monetary Value) analysis. RFM analysis looks at recency (how recently a consumer has gambled and purchased), frequency (how often a consumer has gambled and purchased), and monetary value (how much the customer spends). This analysis is a quantitative system and aims to determine whether consumers will respond to marketing offers. The licensee also noted that a similar quantitative system can be applied to assess average gambling behaviour and intervention can be applied to players operating at the extreme of the normal distribution curve.
Several licensees advised that they use behavioural and transactional markers including:
- number of payment methods
- failed deposit at first attempt since registration
- credit cards
- type and number of payment methods
- bonus requests
- increasing deposits both in amount (£) and frequency
- amount and velocity of deposits
- deposit and loss levels in the first few days after registration
- use of third-party cards
- previous self-exclusion history
- deposit limit changes/removal of limit
- unsociable hours gambling (00:00-06:00)
- time spent gambling
- number and type of products used by customer.
One licensee explained that being a VIP significantly increases the frequency of bonus requests. Another highlighted the use of customer segmentation within the database i.e. to split customers into groups based on their behaviours such as product preferences, bet frequency and value.
Few licensees outlined how this information could be used to mitigate the risk of a customer experiencing harm. Some advised that this information allows licensees to develop a basic pattern, and then identify any changes and intervene if needed.
Consultation question 27:
What information from your customer retention strategies could help to inform you about individual customers?
Responses from third party providers highlighted that information from bonussing can help licensees understand a customer’s propensity to bet.
Licensees answered that the information gathered from their customer retention strategies can inform them about an individual customer’s gambling preferences, including:
- their choice of games and the volatility in those games’ performance
- their gambling budget, and possible triggers for a particular player
- the number of games they play
- wagering data e.g. the size of their bets, the gross gambling yield acquired from the customer, redeemed bonuses
- deposits and withdrawals
- behavioural information such as opting in to marketing offers and then into bespoke marketing campaigns.
Consultation question 28:
What behavioural risk indicators or markers of harm are present or could be detected very early on in a relationship with a new customer; and which might inform the basis of account limits to prevent harm?
Some consumers suggested that patterns of loss could be a risk indicator or a behavioural marker. Others suggested the use of high interest credit cards and failed account deposits (although that the latter could be a genuine mistake) could be risk indicators or behavioural markers.
Third party providers suggested a mixture of technical and financial checks. These could include velocity and inconsistency checks, capturing the customer’s device and IP details, and assessing any negative financial information.
Other examples of markers of harm included:
- use of (any) credit card(s)
- failed deposits, especially at the first attempt after registration
- the choice and number of payment methods
- regular contact with customer services
- requesting obscure markets.
The RGA noted that markers of harms and indicators of risk will vary between different licensees. This could be because the science behind the types of markers and their relative usefulness of markers is still developing. However, the association is aware that many licensees use the PwC research that was undertaken on behalf of GambleAware as a benchmark for their markers of harm.
The majority of licensees responded with similar behavioural risk indicators or markers of harm:
- the most common suggestion was the cancellation of withdrawal requests (reverse withdrawals) and aggressive contact with customer services, but there was also
- gambling for long periods, and until the account is empty, and the time a customer is playing
- the number and frequency of deposits can be risk indicators, as can a high value first deposit, and deposit spikes
- licensees also observe declined deposits and insufficient funds as indicators of risk. A smaller group of licensees noted that early wins have been shown to have a high correlation with risk behaviour
- other licensees responded that patterns of loss in the first few weeks can also indicate risks of harm.
Consultation question 29:
What elements of relevant research or industry good practice (for example, the RGA Behavioural Analytics Good Practice) have you implemented, and what are you finding most effective?
Several licensees have implemented elements of research and or industry good practice. These include:
- The Health Survey
- RGA Behavioural Analytics Good Practice
- the Price Waterhouse Coopers (PwC) Remote Gambling Research Phase 2 Report
- Gambling Commission’s “Gambling participation in 2017: behaviour awareness and attitudes - Annual Report”
- the Commission’s guidance on customer interaction for remote operators.
The majority of licensees have found the PwC research and the RGA guidelines useful for developing their analytical tools and their algorithms.
The RGA noted they have developed a good practice guidance paper and are intending to update this document in the coming year.
Consultation question 30:
Have you conducted any research among your own customer base?
Consultation question 31:
Did the research generate any information that could inform your harm prevention strategies?
For question 30, most licensees stated they had not conducted research amongst their customer base, although a small proportion had.
Some licensees have conducted a substantial amount of research exploring responsible gambling and markers of harm. One licensee had sent a survey to approximately 77,000 active customers. Their behavioural trigger model is based on the analysis of this survey, as well as existing customer behaviour.
One licensee has conducted a large amount of research including the effectiveness of responsible gambling tools, and the types of tools customers want (e.g. different tools included nudging, limiting and stop tools). Research was also conducted around chosen payment methods, why a customer prefers their chosen payment method and how customers wish to be contacted.
One respondent stated they are working with clients to conduct analytical assessments of customer spending patterns, including when interactions were made, when responsible gambling functionalities are imposed and then working to improve and prevent issues at an earlier stage.
In answering question 31, the majority of licensees have used the relevant information to inform their harm prevention strategies, and initial findings have shaped how they interact with customers and provided insight on more effective ways to interact. Several licensees have used the findings to improve their responsible gambling algorithms, and general responsible gambling tools.
Consultation question 32:
Are there opportunities to collaborate with other licensees to run harm prevention-focussed research among your respective customer bases?
The majority of licensees said that there are opportunities to collaborate with other licensees to conduct harm prevention-focussed research among their respective customer bases. The RGA advised that it regularly facilitated opportunities for licensees to collaborate with each other.
Most licensees have been involved in collaborating with other licensees to run harm-prevention research with the RGA, in particular the RGA algorithms working group and other groups. Licensees have also been involved in collaborative research conducted by PwC through its pilot, and Senet. One licensee stated it had collaborated with another to deliver a Level 2 qualification in player protection.
One respondent was of the view that research needs to be led by the larger licensees who should be leading by example, to assist smaller licensees who may not have the material or technical expertise/resource.
Consultation question 33:
What information have you already acquired from the application of any limits on your customers’ accounts?
Consultation question 34:
What information have you gathered from your enforcement of these limits as part of your customer interaction processes?
Licensees outlined the following information from the application of limits on customer accounts.
- one licensee has found that some customers set contradictory limits, requiring the licensee to enforce the most restrictive limit chosen by the customer
- another stated that they monitor the weekly uptake of customers adding deposit limits, cool offs and self-exclusions. The licensee also noted that whilst deposit limit usage can be considered a measure of control, the licensee has seen data that the overuse of limits – regular changing of limits for example – has a clear relationship with the propensity to exclude.
Another licensee found that when they speak to new customers about the availability of deposit limits, take-up increases by 4%. Conversely, another licensee found that customers are reluctant to have limits imposed on them for responsible gambling purposes. Finally, one licensee has inconclusive findings for the effectiveness of limits, noting that customers who have limits imposed on them are less likely to adhere to the limits than customers who choose to set a limit of their own choice.
Some licensees have noted that following an exclusion their returning customers are restricted by them to an enforced daily deposit limit of £50 for the first 24 hours. One of the licensees explained that it currently has 292 active returning customers, and 247 of these still have active deposit limits set. 70 of the 247 consumers still have the £50 daily limit set.
One licensee has been using mandatory deposit limits since June 2018 and these can be imposed on consumers so that limits cannot be removed, and a maximum cap is put in place. The licensee has begun trialling limits as a problem gambling intervention, and it is looking to introduce it to at-risk groups such as 18-24-year olds and returning self-excluded customers. On reviewing the customers behaviour following the application of a limit, the licensee has seen that following the spike in behaviour which ultimately led to the enforcement of the limit, customer behaviour falls to below the previous (pre-problematic levels) and does not trend back upwards.
Consultation question 35:
Do you consider socio-demographic or economic data, that is not specific to the customer’s identity, but which could help to inform an assessment of what they might be able to afford to gamble? (e.g. postcode deprivation indices)
Consultation question 36:
And could these be used to inform limit setting?
A large number of licensees said that they consider socio-demographic or economic data that is not specific to the customer’s identity. As mentioned previously, the RGA is currently working on an affordability model which would take socio-demographic data into consideration during an affordability assessment.
Some licensees were conscious that socio-demographic data has limited accuracy or specificity for the individual, and therefore does not offer a current reflection of a consumer’s current financial situation. Other licensees gathered and considered such data (including postal address) during further due diligence, with others beginning a trial of postcode affordability data or building an algorithm which looks to predict an estimate for weekly disposable income based on data from the ONS, although these are yet to be tested. One licensee stated that they use this data during account review, especially if a customer is spending a large amount, is a young person, or is a student. In these cases, source of wealth is asked for and this is usually as part of the AML or responsible gambling process.
The majority of licensees thought that socio-demographic and economic data could be used to inform limit setting.
Consultation question 37:
Do you verify any economic information specific to the customer (e.g. credit scoring data, employment history or indicators of income and expenditure) as part of your risk’s assessment?
Many licensees verify economic information that is specific to the customer as part of their risk assessments, although a large number of licensees did not answer this question.
A number of licensees stated that they verify economic data that is specific to the customer for responsible gambling or AML processes and this is done on a risk-sensitive basis. Another licensee carries out these checks on a risk-based approach according to deposit or loss levels.
However, several licensees maintain that economic data has to form one part of the overall assessment as each customer is different. One licensee is investigating the possibility of using credit score data to assist with new customer affordability assessments. The same licensee uses economic data such as title deeds, CCJs and employment indicators during enhanced customer due diligence checks. Another licensee stated they it asks for source of wealth and bank statements.
Consultation question 38:
Do you monitor the use of gambling management tools from the outset of the relationship, and what do these tell you about the customer?
The vast majority of licensees noted that the use of gambling management tools, such as the increase or removal of limit settings and time outs, are indicators of harm, and these actions do trigger responsible gambling interactions. One licensee did note however that a customer who changes their deposit limit frequently or utilises timeouts regularly may well be using gambling management tools to appropriately manage their gambling and such usage or changes may not always be indicators of risk. However, the use of gambling management tools does help to build a picture about how a customer responsibly manages their play.
The RGA is aware that several licensees are continually monitoring the use and effectiveness of their gambling management tools.
Consumer attitudes - supplementary questions asked through the ‘Survey Monkey’ portal
What do you think of the idea of gambling businesses setting limits on a customer's gambling until they know more about them?
What information should a gambling business use to decide whether to change or remove a limit?
The majority of respondents had negative views about gambling businesses setting limits on a customer’s account until they know more about their nature and purpose. The responses included a large number of consumers who were concerned that this would be abused by licensees (as licensees could exploit this to unfairly limit the activity of customers who win) and several respondents argued that this would be very intrusive.
However, there were several respondents who thought that licensees applying limits onto a customer’s account would be a good idea, with some respondents agreeing with the concept in certain circumstances.
Nearly half of the consumers responding were against gambling businesses gathering information before changing a limit on a customer’s account, with the most common response being that it is the “responsibility of the customer” to not only apply their own limits but to make any subsequent changes to those limits.
Of the responses that were positive towards this idea, the majority focused on financial information, with suggestions being that licensees could perform income checks, credit checks, ask for occupation details, or request bank statements. Other suggestions were that licenses assess the time spent gambling and the size of a consumer’s loss.
We welcome the responses to these questions from licensees, consumers and third parties, and we will use the feedback to continue to develop our work in this area. We will continue to engage with remote gambling licensees and encourage them to collaborate in developing approaches to assess the levels of gambling that a customer might be able to afford. This will form part of our broader work with licensees and financial institutions to better understand the range of accessible data and how it could inform mandatory limit setting, before we consider consulting on options at a later date.
We note the concerns raised by consumers regarding the purpose of any such checks, and the related issues of data security and privacy. In progressing our work in this area, we will consider the balance that may be needed between allaying these concerns and the opportunities for stronger consumer protections that could be delivered.
We will consider the responses submitted as part of this call for information when reviewing and updating our customer interaction guidance, and we will publish a consultation on the customer interaction elements of LCCP in February. Licensees should take account of the details submitted as part of this call for information, as outlined in this section, when reviewing their own approaches to harm prevention.
AV CI consultation responses: Summary of responses – identity verification Next section
AV CI consultation responses: Annex A: New licence conditions and amended social responsibility codes of practice
Last updated: 28 June 2023
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