Greater transparency required for customers – do they know who they're participating against?
We want licensees to put the interests of customers first, by treating them fairly and communicating with them in a clear way that allows them to make properly informed decisions.
We are aware that some licensees, across a number of sectors, participate in their own products either directly or indirectly through a Group company. Whilst not intended to be an exhaustive list, examples include seeding markets or hedging other liabilities on a betting exchange and purchasing entries into a betting pool, lottery or bingo game.
We are also aware that some licensees have agreements with individuals or companies to play in their products. These agreements, typically provided to high-volume customers, may include enhanced incentives or rewards which wouldn’t be widely available to the significant majority of the customer base. Examples may include reduced commission rates or refunds/rebates.
These practices are generally undertaken to make products more attractive to the wider customer base by providing more gambling opportunities and/or making prizes larger.
The acts of participating in your own product or providing enhanced incentives or rewards to certain customers to play your products should be made clear to all customers as part of providing fair and open gambling. Good practice would also see operators making it clear if their employees are allowed to participate in their own gambling products against other customers. This information should be made readily available to customers and set out in plain language.
Licensees should also ensure that all customers are treated fairly. For example, within the responses document to our pool betting consultation, we documented our expectation that all customers must be treated fairly through the application of a single pool closing time and the provision of consistent information about pool sizes and selections made. The same principles would apply across other gambling products.
In addition to the above guidance we would also like to remind operators of the new licence condition 126.96.36.199 which came into effect on 31 October 2018. This requires that licensees do not commit any unfair commercial practices within the meaning of the Consumer Protection from Unfair Trading Regulations 2008. Unfair commercial practices include misleading omissions as defined in section 6 of the Regulations, and omitting material information “… and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.”
To assess whether you are treating your customers fairly in this area, licensees should ask themselves the following questions:
- Do we participate within our own product, either directly or indirectly through a Group company? If so, is this made clear to our customers in plain language?
- Do we offer enhanced incentives or rewards to some customers which wouldn’t be widely available to the significant majority of the customer base? If so, is this made clear to our customers in plain language?
- Do we allow our employees to participate in our product against other customers? Is our approach clear to employees? If employee participation is allowed, is this made clear to our other customers? How do we ensure our employees don’t have an unfair advantage over other customers?
- Can we evidence to the Commission that all customers are treated fairly?
Licensees are reminded of the licensing objective of ensuring that gambling is conducted in a fair and open way.