Customer interaction guidance - for remote gambling licensees (Formal guidance under SR Code 3.4.3 - not in effect)
This guidance was originally published in June 2022. It is not in effect and operators are not required to take it into account.
Following our consultation on customer interaction, Social Responsibility Code Provision 3.4.3 for remote gambling licensees has been introduced and the majority of requirements are in effect from 12 September 2022.
We have issued this update on the regulatory requirements and status of formal guidance regarding customer interaction for remote gambling operators. We intend to conduct further consultation on matters to be addressed in the guidance associated with Social Responsibility Code Provision 3.4.3, by way of a consultation on the guidance document itself, likely to commence in late September. This consultation will be available on our consultations page.
When there are indicators that a customer may be experiencing harm, acting early and quickly could help stop or prevent the harm worsening. Spotting signs of harm and taking early action can be a preventative measure, designed to enable a customer to gamble safely. It can also be reactive, to support a customer when harm is being experienced to reduce or stop gambling - even when it is reactive, it is most effective if the harm is identified early and responded to quickly.
Your regulatory responsibilities
All licensees are required to implement customer interaction in a way which minimises the risk of customers experiencing harms associated with gambling, as set out in Social Responsibility Code Provision 3.4.3 of the Licence Conditions and Codes of Practice (LCCP).
Social Responsibility Code Provision 3.4.3
The in effect dates are as follows:
- in paragraph 1, the words ‘as explained in the Commission’s guidance (see paragraph 2)’; and the entirety of requirements 2 and 3 are not yet in effect
- paragraph 10 will come into effect on 12 February 2023
- the remainder of Social Responsibility Code Provision 3.4.3 is in effect from 12 September 2022.
In effect dates were updated in this document on 12 September 2022.
Remote customer interaction
All remote licences, except any remote lottery licence the holder of which does not provide facilities for participation in instant win or high frequency lotteries1, remote gaming machine technical, gambling software, host, ancillary remote bingo, ancillary remote casino, ancillary remote betting, remote betting intermediary (trading rooms only) and remote general betting limited licences.
1. Licensees must implement effective customer interaction systems and processes in a way which minimises the risk of customers experiencing harms associated with gambling. These systems and processes must embed the three elements of customer interaction – identify, act and evaluate – and which reflect that customer interaction is an ongoing process as explained in the Commission’s guidance (see paragraph 2).
2. Licensees must take into account the Commission’s guidance on customer interaction for remote licensees as published and revised from time to time (‘the Guidance’).
3. Licensees must consider the factors that might make a customer more vulnerable to experiencing gambling harms and implement systems and processes to take appropriate and timely action where indicators of vulnerability are identified. Licensees must take account of the Commission’s approach to vulnerability as set out in the Commission’s Guidance.
4. Licensees must have in place effective systems and processes to monitor customer activity to identify harm or potential harm associated with gambling, from the point when an account is opened.
5. Licensees must use a range of indicators relevant to their customer and the nature of the gambling facilities provided in order to identify harm or potential harm associated with gambling. These must include:
- a. customer spend
- b. patterns of spend
- c. time spent gambling
- d. gambling behaviour indicators
- e. customer-led contact
- f. use of gambling management tools
- g. account indicators.
6. In accordance with SR Code Provision 1.1.2, licensees are responsible for ensuring compliance with the requirements. In particular, if the licensee contracts with third party business-to-business providers to offer any aspect of the licensee’s business related to the licensed activities, the licensee is responsible for ensuring that systems and processes are in place to monitor the activity on the account for each of the indicators in paragraph 5 (a-g) and in a timely way as set out in paragraphs 7 and 8.
7. A licensee’s systems and processes for customer interaction must flag indicators of risk of harm in a timely manner for manual intervention, and feed into automated processes as required by paragraph 11.
8. Licensees must take appropriate action in a timely manner when they have identified the risk of harm.
9. Licensees must tailor the type of action they take based on the number and level of indicators of harm exhibited. This must include, but not be limited to, systems and processes which deliver:
- a. tailored action at lower levels of indicators of harm which seeks to minimise future harm
- b. increasing action where earlier stages have not had the impact required
- c. strong or stronger action as the immediate next step in cases where that is appropriate, rather than increasing action gradually
- d. reducing or preventing marketing or the take-up of bonus offers where appropriate
- e. ending the business relationship where necessary.
10. Licensees must prevent marketing and the take up of new bonus offers where strong indicators of harm, as defined within the licensee’s processes, have been identified.
11. Licensees must ensure that strong indicators of harm, as defined within the licensee’s processes, are acted on in a timely manner by implementing automated processes. Where such automated processes are applied, the licensee must manually review their operation in each individual customer’s case and the licensee must allow the customer the opportunity to contest any automated decision which affects them.
12. Licensees must implement processes to understand the impact of individual interactions and actions on a customer’s behaviour, the continued risk of harm and therefore whether and, if so, what further action is needed.
13. Licensees must take all reasonable steps to evaluate the effectiveness of their overall approach, for example by trialling and measuring impact, and be able to demonstrate to the Commission the outcomes of their evaluation.
14. Licensees must take account of problem gambling rates for the relevant gambling activity as published by the Commission2, in order to check whether the number of customer interactions is, at a minimum, in line with this level. For the avoidance of doubt, this provision is not intended to mandate the outcome of those customer interactions.
Licensees are required to take into account this guidance. It has been developed to support effective delivery of customer interaction systems and processes in order to meet the outcomes of identifying and reducing harm.
Scope of Social Responsibility Code 3.4.3 and associated guidance
The Social Responsibility (SR) code 3.4.3 and this guidance applies to: all remote licences, except any remote lottery licence the holder of which does not provide facilities for participation in instant win or high frequency lotteries1, remote gaming machine technical, gambling software, host, ancillary remote bingo, ancillary remote casino, ancillary remote betting, remote betting intermediary (trading rooms only) and remote general betting limited licences.
Lottery licensees are therefore only within scope of these requirements if they offer instant win games or high frequency lotteries. High frequency lotteries are defined as a lottery in which any draw takes place less than one hour after a draw in a previous lottery promoted on behalf of the same non-commercial society or local authority or as part of the same multiple lottery scheme.
The code applies to all remote licences except those stated. Therefore, providers of telephone only services under a full remote licence are within scope of these requirements.
How to use this guidance
The guidance is intended to support compliance with LCCP SR code 3.4.3. We do this by setting out the individual requirements and for each one:
- explaining the aim of each individual requirement, so that licensees can develop their systems to address that aim
- providing formal guidance which operators must take into account and be able to demonstrate how they have done so
- supplying some additional guidance and information for further context.
How the Commission will use this guidance
Social responsibility code 3.4.3 sets out the requirements relevant licensees must comply with in relation to remote customer interaction. For compliance and enforcement purposes, we will expect licensees to demonstrate how their policies, procedures and practices meet the required outcomes. This can be through implementing relevant parts of the guidance or demonstrating how and why implementing alternative solutions equally meet the outcomes.
Amending this guidance over time
Our understanding of gambling harms and how they manifest is constantly evolving, and industry continue to trial and assess best practice in addressing those harms. So, for the purposes of raising standards, protecting customer interests, and preventing harm to customers, we will update and re-issue guidance. New guidance may be appropriate for example where new evidence or risks emerge which may have a meaningful impact on how the outcomes can be met, or to reflect lessons learned from compliance and enforcement activity.
At the time of publishing, we know of a number of key points when the guidance will be reviewed and may be updated:
Algorithms best practice
The Commission has kickstarted a project on best practice in the use of algorithms in identifying and taking action to minimise harm. This is a means of operators collaborating and sharing best practice as they implement the customer interaction requirements and take account of this guidance. The Commission will consider any relevant lessons learned from that project and may make amendments to this guidance as a result.
Further customer interaction consultation
The Commission has committed to a consultation on how to tackle the following three key financial risks for customers:
- significant unaffordable losses over a short period (binge gambling)
- significant unaffordable losses over time
- customers who are in a financially vulnerable situation.
Following the consultation on these new requirements, this guidance will be updated.
The guidance cross-refers to the Commission’s official statistics on problem gambling prevalence. When these statistics are updated, and where other relevant research relating to harm and vulnerability emerges, this guidance will also be updated.
1A high frequency lottery is a lottery in which any draw takes place less than one hour after a draw in a previous lottery promoted on behalf of the same non-commercial society or local authority or as part of the same multiple lottery scheme.
2 Problem gambling rates for the relevant gambling activities are available on our website.
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Section A - General requirements - Customer interaction guidance for remote gambling licensees (SR Code 3.4.3)
Last updated: 15 September 2022
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