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  3. Summer 2023 consultation – Proposed changes to LCCP and RTS: Consultation Response

Consultation response

Summer 2023 consultation – Proposed changes to LCCP and RTS: Consultation Response

This response sets out our position in relation to the consultation on the proposed changes to LCCP and Remote Gambling and Software Technical Standards.

Published
1 May 2024

Last updated
27 August 2024 - Changes

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Contents

Summary of responses and our position - Improving customer choice on direct marketing

Proposals

We consulted on introducing a new Licence Conditions and Codes of Practice (LCCP) requirement to provide customers with options to opt-in to direct marketing based on the product types (for example betting, bingo and casino) they are interested in and the channels (for example email, SMS) through which they wish to receive marketing. The aim of our consultation was to extend the principles of Privacy and Electronic Communications Regulations (PECR) to new and existing customers.

Consultation question

To what extent do you agree with the proposed new requirement relating to customer choice and direct marketing? Please give your reasons.

Respondents’ views

The consultation responses showed that members of the public were broadly supportive of the proposal, providing a range of general comments about how the proposals seemed sensible. They also welcomed improved customer choice, particularly as it would allow customers who are only interested in betting to switch off marketing for non-betting products.

There were a small number of customers who stated that they disagreed with the proposals on direct marketing. However, having reviewed these responses, some related to other consultation proposals, such as financial vulnerability and financial risk. As a result, we considered these responses in the context of the other proposals. There were also customers who wanted to see non-betting products heavily restricted or prohibited all together (which was not in scope of this consultation).

Gambling operators were generally supportive of improving customer choice for marketing or they already offer such options, but were opposed to the part of the proposal that would require marketing to customers where they had not updated their preferences to cease.

The lottery and land-based sectors raised concerns relating to their lack of account-based play and technical infrastructure that would make the proposal challenging and costly. Further views are broken down in the following section.

Respondents raised the following key points:

  • the proposal is disproportionate in scope and to the risk posed by marketing
  • preferences should be set as ‘opt-out’ rather than ‘opt-in’
  • customers pre-existing direct marketing preferences and consent should remain as it was legally obtained. Opting (millions of) customers out of marketing could cause confusion, complaints and a drop in revenue
  • clarity was sought on whether the proposal was requiring marketing to be available across all channels according to preference
  • it is clear from reading the principles set out in the White Paper that the intention of the government was to give customers more choice as this proposal seeks to do
  • marketing should require reactivating once a year, or every 6 months (to check consent remains valid)
  • customers that have not gambled in an extended period should be considered lapsed or inactive and marketing should cease
  • there should be a period of 6 to 18 months to allow for implementation as the same team will be implementing any changes arising from other consultations
  • the category ‘any other communication method’ was too vague, open to interpretation and possibly left operators in a regulatory grey area
  • notifications are not useful as a channel option as these can be controlled from the device and it would add an extra layer and/or cause confusion
  • preference choices should be clear and understandable and designed so that one option is not more salient than the others.

The lotteries and/or charities sector were particularly concerned that the proposal would or should:

  • impact their ability to rely on ‘legitimate interest’ for marketing and may prevent generic forms of marketing being sent to customers
  • seriously impact their ability to raise vital funds and retain customers
  • not apply to this sector as most do not offer multiple types of gambling product and so cannot ‘cross-sell’
  • go beyond the intentions of the White Paper
  • be over complicated for their customer demographic
  • not apply to their sector due to the low risk associated with lottery products
  • not be applicable as many customers subscribe via post and do not have accounts
  • clarify whether the proposal required separate categories for charity activities (unrelated to lotteries) or separate categories for ‘raffles’.

The land-based sector, predominantly bingo operators, were particularly concerned that the proposal would or should:

  • seriously impact their profits and ability to retain customers, some of whom only visit on occasion
  • put land-based bingo at a commercial disadvantage due to lack of electronic engagement with customers
  • mean that customer preferences would need to be ‘checked’ on arrival, giving them an unsatisfactory customer experience
  • impact social engagement for the elderly and vulnerable
  • prevent generic forms of marketing being sent out to customers
  • see slots being classified as a casino product which would confuse customers (40 percent of land-based bingo players also play slots according to an operator submission)
  • clarify whether staff talking to customers could be considered marketing and require a separate channel preference.

Many respondents suggested that the proposal cuts across and goes above and beyond existing primary legislation and regulations such as the Data Protection Act (DPA), PECR, the Regulators Code, Advertising Standards Authority (ASA/CAP) Codes and more significantly, the Data Protection and Digital Bill which is currently going through Parliament. This Bill is set to relax marketing practices for charities and other non-commercial organisations. Several respondents felt that the Information Commissioner's Office (ICO) should have sole responsibility for consulting on direct marketing.

A number of respondents suggested that the consultation should not proceed without the cross-selling evidence mentioned in the consultation document and that this evidence should inform current proposals. Some respondents felt that the current evidence does not provide a firm basis for introducing significant change. There were also views from industry that this consultation should have been combined with the Socially Responsible Incentives (SRI) consultation as they are linked.

Some respondents highlighted potential unintended consequences, which might include:

  • that there will be a sudden increase in marketing to engage with millions of customers and seek preferences
  • marketing to customers who are currently opted-out of receiving marketing to check their preferences
  • an inability to retain existing customers and loss of customer databases
  • operators providing strong inducements or incentives to encourage website visits
  • operators encouraging or discouraging certain preferences
  • persistent requests from operators if customers fail to respond to their communications
  • an actual reduction in ‘blanket marketing’ opt-outs due to more customer choice
  • a delay in obtaining seasonal gamblers’ preferences
  • the need to regularly review, amend and update marketing preferences and channels.

Our position

We have considered the comments and concerns raised by stakeholders in the consultation responses and addressed them below.

Land based gambling was originally included in scope of the proposal as it was considered worth exploring how feasible it would be to improve customer choice across the entire gambling industry. Online accounts can also be opened from some land-based premises.

There was concern from the lottery sector around our proposal removing their ability to rely on legitimate interest for wider fundraising activities. As the regulator for gambling in Great Britain, any activity that is not related to licensed gambling was not in scope of our proposal.

Our engagement and the written consultation responses have shown that the scale of the task required for land-based and lottery operators to develop a solution to seek customer marketing preferences (for all existing and new customers) appears to be disproportionate to the benefit afforded to their customers at this time. Our past 12 months contact centre data does not feature complaints about lottery marketing.

Given the complexities faced by such operators and our focus on remote gambling marketing, we will not include land-based gambling and the lottery sectors in scope of this requirement.

The Gambling Commission will continue to monitor and review gambling marketing and may revisit this decision at a later date if we receive complaints about relevant marketing or if the evidence base otherwise changes.

The ICO is the supervisory authority for data protection and enforces the General Data Protection Regulation (GDPR) and PECR. There are other rules and codes of practice relating to marketing, which are regulated by other bodies such as the ASA. However, this does not preclude regulators such as the Commission taking steps to mitigate sector specific risks or improve the options customers have to control gambling marketing.

The proposed requirement in the consultation would not have required operators to ensure that all marketing campaigns were issued by all channels where customers had expressed a preference. For example, an email marketing campaign could be sent by email only - it was not intended that an operator must also send out this campaign via SMS because some customers had opted into an SMS only preference.

We considered whether it was appropriate to combine this consultation with the (at the time upcoming) work on SRI. This consultation focused on improving customer marketing preferences whereas the SRI consultation is looking at the mechanics of inducements in detail. It did not seem necessary to delay this consultation when the focus was markedly different, but the Commission is mindful of the links between the topics and is joined up internally.

As set out in our consultation paper, the Commission conducted further research into promotional offers and incentives, the findings of which were published in November 2023. As a part of the Consumer Voice research programme, Yonder’s qualitative approach found that persistent marketing increases engagement in promotional offers that are unrelated to the customer’s primary form of gambling.

Initially, consumers justified their engagement with newer, secondary types of gambling as a way to fund their primary type of gambling. Some customers may gamble on new gambling products from promotions despite not having a full understanding of the offer or of the game itself, which can lead to increased potential for gambling-related harm.

Consumers rarely adapted their cumulative gambling budget to cater for the greater quantity of gambling activities they engaged with. Instead, they typically allocated a separate budget for the new form of gambling on top of their original gambling budget, effectively increasing the amount they were willing to lose. This is particularly enhanced when offers have removed the feeling that the individual has staked their own money. Whilst initially used as a means to fund their main gambling activity, new gambling activities become a staple within their gambling routine. The research found that, over time, offers increase the prevalence of customers gambling on a wider range of products and this engagement can continue even without the use of offers.

While the research is not definitive about the impact of cross-selling, it is clear that some customers may feel incentivised by offers to participate in different gambling activities in addition to their primary gambling activity and this can increase their potential for gambling harm, particularly if they do not understand or enjoy the product.

Channel options

We included explicit options in the consultation proposals for channel preferences to aid consistency across the gambling industry.

We note the inclusion of a channel for push notifications appears unnecessary given the user control on the device which already exists. It may also cause confusion as customers could have conflicting preferences across device and gambling account settings. Similar arguments mean that the proposed channels for social media and ‘other’ would add complexity that may not be helpful.

We have also removed the requirement to include post as a form of direct marketing. We do think there is merit in customers having full control over their gambling marketing via all channels however the inclusion of post would go beyond the scope of PECR and bring only limited benefits for customers.

As per our original aims, we want to extend the principles of PECR to all customers, including existing customers. The main direct marketing channels that are covered by PECR are phone calls, emails, texts (SMS) and faxes.

However, we are not aware of gambling marketing being sent by fax and will therefore update the channel preferences that are required to be offered (where applicable) to phone calls, emails and texts.

We may revisit this if the need arises, such as customer complaints about postal or other types of gambling marketing.

Product options

In relation to product options, we have removed reference to lotteries as they are no longer in scope of the requirement.

We are not persuaded to use the term gaming to capture non-betting products. Remote gambling licences are issued for distinct activities, such as real event betting, casino and bingo. Whilst bingo is not specifically defined in the Act, the Commission has set out its long-standing position on bingo in the form of an advice note, the core of which, is that bingo is a game of equal chance and therefore not a casino game under the Act.

Operators are licensed for activities they offer and not all remote casino operators offer bingo and vice versa. It could be confusing for customers to see the term gaming used to refer to casino only marketing and separately used for bingo only marketing. We want customers to be clear about the type of gambling product they wish to receive marketing for.

In summary, we will proceed with the product options listed in the consultation except for lotteries. The product options must include betting, casino, bingo and make clear to customers which products are covered in each category.

Implementation

We have removed the need to stop marketing to customers that have not set marketing preferences in line with the proposed product options. Operators were concerned about losing their ability to contact customers including those that only login occasionally.

However, we do not think it would be appropriate to introduce requirements intended to provide customers with better control over the marketing they receive, if they are unlikely to be noticed or considered by customers. Operators were keen to point out that customers do not engage with a high percentage of emails or other types of contact, and we do not want these preferences to be set by new signups only. In order to achieve the aim of ensuring customers are made aware of these preferences, operators will be required to reconfirm marketing preferences with customers upon first login after the requirement comes into effect, as was proposed in the consultation. This can be achieved in a variety of ways, and it will be up to the operator on how to make sure a customer is required to make an active choice before continuing to gamble.

In order to ensure customer’s make an informed decision about their marketing preferences:

  • the information provided to customers should be clear and explain that new granular marketing preferences are being sought to give customers greater control over the gambling marketing they wish to receive
  • the selection page could be designed in a way that requires a customer to make an active choice before they can continue past the page, providing the option to receive no marketing is still an option. For example, by having an explicit box to select ‘no marketing’ along with the options to select channel and product preferences.

For clarity, remote operators can obtain a customer’s updated marketing preferences at any point and do not need to wait until the implementation date. Following the commencement date, marketing can continue as per the existing consent that has been obtained until a customer logs-in to their account. Upon log-in after the commencement date, any customer that had not set preferences in line with the requirement will need to do so before they are allowed to gamble. Customers that have already set preferences in line with the requirement do not need to be asked again.

For operators that already offer marketing preferences including product and channel options, there is likely to be no change as customers will have already consented to receive marketing based on the updated preferences required by the provision.

All options presented to the customer must be presented with blank (unticked) options that require the customer to make a conscious choice. Presenting the options as ‘off’ by default means customers who have opted out of marketing are presented with their correct choice.

Final wording

This requirement will come into force on 1 May 2025. This date, and paragraph 6 of the SR code, was updated on the 27 August 2024. You can read more about the update and implementation extension to upcoming SR Code - 5.1.12 here.

Applies to: All remote casino, bingo and betting licences other than ancillary, host, remote betting intermediary (trading room only) and remote general betting (limited) licences.

SR Code - 5.1.12 - Direct marketing preferences

  1. Licensees must provide customers with options to opt-in to direct marketing on a per product and per channel basis. The options must cover all products and channels provided by the licensee and be set to opt-out by default. These options must be offered as part of the registration process and be updateable should customers change their preference. This requirement applies to all new and existing customers.
  2. Channel options must include phone call, email and text messages (SMS) as applicable.
  3. Product options must include betting, casino, bingo, as applicable. Operators must make clear to customers which products they offer are covered under relevant categories.
  4. Where an operator seeks an additional step for customers to confirm their chosen marketing preferences, the structure and wording of that step must be presented in a manner which only asks for confirmation to progress those choices with one click to proceed. There must be no encouragement or option to change selection; only the option to accept or decline their selection.
  5. Customers must not receive direct marketing that contravenes their channel or product preferences.
  6. Existing customers who have not already opted out of marketing must be asked at their first log-in after commencement of this provision to confirm their marketing preferences if they have not done so already. Existing preferences can be copied over providing they match the format of this requirement.

We are committed to giving consideration to potential equalities impacts, having regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations between those who share a protected characteristic and those who do not. As part of this consultation, we invited evidence and information to assist us in considering any equalities impacts, within the meaning of section 149 of the Equality Act 2010, in the context of the proposals. Respondents did not raise any issues about the proposals which we are taking forward following consultation.

Our consideration is that the policy changes being implemented do not present a negative impact on the protected characteristics stated within the Equality Act 2010, and they do not contribute towards unlawful discrimination, harassment or victimisation and/or other conduct prohibited by the Act, and we do not consider that the changes will reduce equality of opportunity or foster poor relations between people who share a protected characteristic and those who do not.

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