Consultation response
Changes to the licence conditions and codes of practice on age and identity verification for remote gambling
A summary of the responses to our consultations on changes to LCCP on age and identity verification for remote gambling.
Contents
- Executive summary
- Introduction
- Summary of responses – age verification
- - Proposed changes to social responsibility code provision 3.2.11
- - Proposed changes to social responsibility code provision 3.2.13
- Summary of responses – identity verification
- Additional call for information - mandatory account limits
- Annex A: New licence conditions and amended social responsibility codes of practice
Proposed changes to social responsibility code provision 3.2.11
Proposed changes to social responsibility code provision 3.2.11 - access to gambling by children and young persons – SR code provision applying to remote betting and gaming operators
The first proposal was about age verification. We proposed to remove the current provision in LCCP that allows licensees 72 hours to verify the age of a new customer. This proposal was aimed at reducing the risks of underage gambling and to take account of improvements in age verification methods.
Alongside the proposal that all remote gambling customers must be age verified before they can deposit money and gamble, we also proposed that all customers must be age verified before they are able to access free-to-play versions of gambling games that licensees make available on their website.
The following questions and respondents’ views cover these distinct areas. Questions 1 to 3 were introductory questions concerning the respondent’s personal details and are not detailed here.
Consultation question 4:
Do you agree that remote betting and gaming licensees should be required to verify the age of customers before they can deposit money or gamble?
Respondents’ views
The majority of respondents supported this proposal.
Some consumers (some 18% of all respondents that favoured the proposal) were in favour of age verification before depositing and gambling, as long as it reduced delays to, or was not used as a means to delay, the withdrawal of funds from their gambling accounts.
Some consumers, while supportive of verifying the age of customers before deposit, were of the view that licensees should set out what identity documents they need from the outset. Similarly, some consumers stated their concern that licensees have no interest in stopping underage gamblers if the customer is losing.
Licensees were broadly in favour of the proposal, but many caveated their support by stating that they would welcome a reduction in the 72-hour window to, for example, 24 hours. Some advised that they would need a few months to develop systems for manually verifying those customers not automatically verified at the first attempt. Several stated that age verification shouldn’t be necessary for those customer registrations that never go on to deposit, given the sizeable number of customers who register but then don’t go on to deposit or gamble.
A number of licensees were concerned that the proposals would cause disruption or friction to the customer on-boarding journey. For example, one respondent noted that although they supported the proposal it may lead to the unintended consequence of potentially delaying new customers from being able to bet on specific events at short notice.
A small number of licensees and consumers thought that the current 72-hour rule was sufficient, and consumers also added that licensees may misuse the proposed change to ask for further ID documents.
Consultation question 5:
Do you agree that remote betting and gaming licensees should be required to verify the age of customers before they can access play-for-free versions of gambling games that licensees make available on their websites?
Respondents’ views
There was significant support for the proposal to verify age before a new customer can access free-to-play games. Consumers, third-party ID providers and several licensees supported this proposal on the basis that they consider free-to-play games to be essentially an invitation to gamble. Some licensees noted that the proposal would regularise the position with advertising rules, and therefore provide consistency.
A cross-section of respondents – and in particular, licensees – stated that while they supported the principle of verifying age before a customer can access free-to-play games on licensees’ websites, the Commission should adopt a similar approach to social casino gaming and unregulated websites. Some were concerned that there is a possibility that a substantial volume of players, upon finding themselves unable to engage immediately with a licensed operator, could gravitate towards unlicensed markets.
Among those against the proposals, including consumers and some licensees, respondents argued that free-to-play games are not gambling and that similar games can still be accessed on social gaming platforms. Others noted that parents need to play more of a role in this area or suggested that these types of games should be removed completely from the market.
One licensee responded that they were against the proposal and that accurate statistics needed to be produced to demonstrate the level of underage gambling that is occurring.
Our position:
We propose to introduce the change to SR Code 3.2.11 as originally published in the consultation. This would therefore require remote betting and gaming operators to verify the age of any customer before they were able to deposit money or gamble, and before they were able to access any free-to-play games the licensee may make available on its website.
As stated in our consultation, age verification would not necessarily need to be completed by licensees at the point a new customer account is opened and registered. However, verification would need to be completed before that customer was able to deposit or gamble online, and before they could access any free-to-play versions of games made available.
For example, the requirements would mean that:
- if a customer can access free-to-play games before depositing any of their own money into their account, then the licensee must complete age verification pre-deposit and before the customer can access free play games
- similarly, if a customer can register and gamble for a prize using free bonus funds provided by the licensee without having to first deposit cash funds, then the licensee will need to complete verification earlier than the point of deposit (that is, at the point of account registration or the point where the free bonus can be used by the customer).
It is important that the risks of underage gambling are minimised, and we therefore do not think it is appropriate for the current 72-hour rule to be reduced to either a 24-hour or 48-hour time period. Only verification before the point of deposit would have any impact on reducing the risks of children being exposed to online gambling.
While we acknowledge that the customer-on-boarding journey may involve greater levels of friction under the proposals, we note that the vast majority of consumers who responded to the consultation supported our proposals for strengthening age verification. Consumers were generally much more concerned about licensees disrupting the process of withdrawing funds from their account than they were about disruption to on-boarding.
Free-to-play games
Our concerns about the availability of gambling-style games to children also apply to games offered by non-gambling businesses (for example, social casino gaming, which we currently consider falls outside the scope of gambling legislation if no prize of money or money’s worth is awarded). While there is no clear-cut evidence that playing social-casino games is harmful for the vast majority of players, we remain concerned that it may lead to, or cause, more harmful behaviours in some circumstances. The similarities between social casino gaming and commercial gambling, including the elements of expenditure and chance, may result in harm for some.
We have continued to monitor developments within the social casino sector since our position papers of January 2015 and March 2017. We have gathered evidence from a variety of sources and worked in partnership with the industry and other regulators.
In the absence of specific statutory regulation of the social casino sector, the International Social Games Association (ISGA) has developed Best Practice Principles. These provide guidance to the social casino games industry on consumer protection. They include that social casino games should specify that the games are intended for use by those 18 or older and/or provide advice to parents and teens on making smart choices online. They also include that games designed for children should not contain direct exhortations to buy in-game items or to persuade an adult to buy items for them.
As outlined in our March 2017 paper, we have not yet advised Government of the need for additional regulation for the social casino sector. But we did warn that this position depends on the social casino industry pursuing a proactive and credible approach to social responsibility and an awareness of potential harm which must continue to encompass best practice consumer protection measures.
In drawing a distinction between free-to-play games and social casino games, it is important to note that social casino games are available from generic platforms that provide a wide variety of apps, and consumers are not able to access a real-money prize version of a social casino game within the same app. In contrast, consumers accessing free-to-play games on a licensed gambling operator’s website are directly exposed to real money gambling opportunities. The purpose of a free-to-play version of a game on such sites is to encourage players to familiarise themselves with a game prior to playing the real-money version, which can only be accessed by adults. We think it is appropriate for licensed operators to ensure that young people are not able to access their free-to-play tester products. Therefore, such games should only be available to consumers after their age has been verified.
Consultation question 6:
Do you agree that we should remove the current provision that licensees must 'require their customers to affirm that they are of legal age'?
Respondents’ views
Overall, responses to this proposal were mixed with some against removing the provision, some for and a small group having chosen to not answer the question.
Around half of licensees were in favour of removing the provision on the basis that requiring customers to self-affirm age would no longer be necessary, and that it serves no purpose or provides any additional protection. Other licensees thought it should remain in place as it acts as a deterrent to underage gambling and reinforces customer responsibility. They also argued that it allows a licensee to point to this positive affirmation if they receive customer complaints, and that it prevents ambiguity for those customers claiming they were unaware of the restriction.
Some consumers, licensees and third-party providers were of the view that the onus should be on the consumers to prove that they are not underage, whereas some others said it should be the licensee who verifies legal age.
Our position:
We will remove from SR Code 3.2.11 the existing provision that licensees require customers to “affirm they are of legal age” as proposed in the consultation. The provision would ultimately have little value from a regulatory perspective, given the new requirement to verify age before deposit and gambling.
However, we acknowledge the responses from some licensees that there are benefits to requiring customers to affirm their age. The removal of the provision from LCCP does not mean that licensees are obliged to remove any customer affirmation from their websites. Licensees are therefore welcome to retain these provisions if they think that doing so will supplement their overall approach to preventing underage gambling.
Consultation question 7:
For licensees: If possible, provide an estimate of the costs that might be incurred by your business through implementing the proposed changes to SR Code 3.2.11. Such costs might include, for example, technological changes (including software development and associated staff time), familiarisation costs in terms of staff training, or other business impact costs. Please also provide details of one-off costs and any annual or ongoing costs from the proposals.
Respondents’ views
This question was aimed at licensees for them to provide cost estimates. Projections varied significantly. Some licensees quoted figures in the tens of thousands, others figures in the hundreds of thousands. Some licensees argued that there would be revenue losses in the millions due to friction in customer on-boarding. Some licensees quoted on the basis that they would (whether voluntarily, or in misunderstanding of the proposal) pursue systemic changes based on verification at the point of registration rather than verification before deposit or gambling.
Our position:
Given the disparity in costs estimated by licensees, we also sought some cost estimates from third-party identity verification solution providers. While some licensees will be pursuing more robust and more expensive systemic changes that aim to verify their customers at the point of registration, the Commission is required to assess the economic impact of its regulatory provisions ie the verification of age and identity before deposit and gambling. We will submit a Business Impact Target (BIT) assessment to the Regulatory Policy Committee, as per requirements under enterprise legislation.
Consultation question 8:
For licensees: How long a lead-in time would your business need to implement technical developments in order to deliver the changes proposed to SR Code 3.2.11?
Respondents’ views
This question was also aimed at licensees, and we received widely varying responses. Some licensees advised that their systems already comply with the proposals, and they would not need any development time. Others thought they would only need a few weeks, but licensees typically stated between 3 and 6 months to implement the changes. There were some outlier estimations of 9 to 12 months.
Our position:
Given the range of estimates from licensees we also sought similar information from verification solution providers. We have considered the information from licensees around lead-in times but have also taken account of the arguments made by consumers around the need to deliver improvements to consumer protection and fairness.
We intend to implement as soon as possible, meaning that the changes to LCCP will come into effect on 7 May 2019. In reaching this view we are mindful that licensees have been aware of our direction of travel on verification since our proposals were first outlined in our Online Review in March 2018, and that the remote sector has been subject to a number of enforcement cases (the outcomes of which have been publicised) where we have been clear in our expectations that the wider remote sector learns lessons from these cases. We therefore expect licensees to prioritise their resources to comply with the new LCCP requirements.
Social responsibility code provision 3.2.11 – amended version to take effect on 07 May 2019
Access to gambling by children and young persons – remote SR code
All remote licences (including ancillary remote betting licences in respect of bets made or accepted by telephone or email), except lottery licences, gaming machine technical, gambling software, host, ancillary remote casino, and ancillary remote bingo licences
Licensees must have and put into effect policies and procedures designed to prevent underage gambling and monitor the effectiveness of these.
Such procedures must include:
- Verifying the age of a customer before the customer is able to:
- deposit any funds into their account
- access any free-to-play versions of gambling games that the licensee may make available
- gamble with the licensee using either their own money or any free bet or bonus.
- warning potential customers that underage gambling is an offence;
- regularly reviewing their age verification systems and implementing all reasonable improvements that may be made as technology advances and as information improves
- ensuring that relevant staff are properly trained in the use of their age verification procedures; in particular customer services staff must be appropriately trained in the use of secondary forms of identification when initial verification procedures fail to prove that an individual is of legal age
- enabling their gambling websites to permit filtering software to be used by adults (such as parents or within schools) in order to restrict access to relevant pages of those sites.
Proposed changes to social responsibility code provision 3.2.13
Last updated: 11 April 2024
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