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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.

Proposed changes to social responsibility code provision 3.2.13

Proposed changes to social responsibility code provision 3.2.13 - access to gambling by children and young persons – remote SR code provision applying to remote lottery licences

To ensure consistency within the LCCP we also proposed to remove the current ‘72-hour’ rule as it applies to society lotteries and external lottery managers (ELMs) so that certain lotteries are required to verify age before a customer can deposit and gamble. In doing so, we noted that the current LCCP provides different age verification requirements for subscription and low-frequency lotteries (defined in the LCCP as a series of lotteries, promoted on behalf of the same non-commercial society, in respect of which there is a period of at least two days between lotteries). We did not intend to amend the requirements for these lower risk lotteries.

The proposal was to require lottery licensees that provide, for example, online instant win and digital scratchcards, or higher frequency lotteries such as daily play, to verify the age of customers before they can participate in such lotteries. Instant win lotteries are a higher risk product than draw-based lotteries due to the frequency and intensity with which customers can participate in such products.

We also proposed that such lotteries should verify the age of customers before allowing them to access any play-for-free versions of lotteries (e.g. scratchcards).

We understand that only a very small number of lottery licensees are likely to be affected by our proposals to amend SR Code 3.2.13. However, any lottery that changed its operational model to start offering free-to-play lottery products, frequent lottery draws or online scratchcards would of course become subject to the proposals.

Consultation question 9:

Do you agree that lotteries should verify the age of customers before they are able to participate in online instant wins/digital scratchcards or any lottery (other than a subscription or low frequency lottery)?

Respondents’ views

Respondents supported the proposal overall. Licensees from the betting and gaming sectors were in favour of the proposal as they considered that all gambling sectors should be subject to the same requirements. Consequently, they thought that subscription and lower frequency lotteries should also be subject to the requirement to verify age before participation.

A small number of major lottery licensees responded to this question and were supportive of verifying age before participation.

Consultation question 10:

Do you agree that lotteries should verify the age of customers before they are able to access any free-to-play versions of lotteries online (for example, online instant wins or digital scratch cards)?

Respondents’ views

Respondents were supportive of the proposal overall. Again, several betting and gaming licensees supported this proposal as they thought all licensees across the remote gambling sectors should be required to comply with standardised requirements.

One lottery licensee was not in favour of this proposal, arguing that free-to-play games are not gambling.

Our position:

We propose to introduce the requirements on age verification for lotteries as outlined in our consultation document. This means that remote lottery licensees- except subscription and low frequency lotteries (as defined in LCCP) - will be required to verify the age of customers before they can:

  • participate in a lottery
  • access any free-to-lay versions of lottery products (e.g. online instant win scratchcards).

Our position on free-to-play games and social casino games is outlined in more detail above, in respect of consultation questions 4 and 5.

We continue to view subscription and low frequency lotteries as representing a lower risk to the licensing objectives, and as such it would be disproportionate to introduce the same levels of age and identity verification requirements to such licensees.

Consultation question 11:

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 3.2.13. 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

Only a small number of lotteries responded to this question, which was as expected given that very few lotteries currently offer online scratchcards or higher frequency draws. One licensee said that they would not incur any costs as their systems were already compliant. Another said that they would incur costs in the tens of thousands to implement system changes.

Consultation question 12:

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 3.2.13?

Respondents’ views

Again, there were only a couple of responses to this question with one licensee quoting 3 months but another estimating between 6 and 9 months including development and testing.

Our position:

We have included lotteries’ cost estimates as part of our Business Impact Target (BIT) assessment which we must submit to the Regulatory Policy Committee, as per requirements under enterprise legislation to assess the economic impact on businesses from regulatory change.

We intend to proceed with implementation as soon as possible, to ensure consistency with the changes to verification requirements for remote betting and gaming operators, and therefore to ensure consistency of consumer protections for higher risk remote gambling. The changes to LCCP will come into effect on 7 May 2019.

We would therefore expect licensees to now prioritise their resources to comply with the new LCCP requirements.

Social responsibility code provision 3.2.13 – amended version to take effect 7 May 2019

Access to gambling by children and young persons – remote lottery SR code All remote lottery 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:

  • warning potential customers that underage gambling is an offence
  • requiring customers to affirm that they are of legal age
  • 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 anyone who sells lottery tickets including canvassers and 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;
  • the following age verification procedures:
    • in the case of both subscription lotteries and low frequency lotteries1, and provided it is clear in the terms and conditions that those under the age of 16 are not permitted to participate and that the prizes will not be paid out to those found to be under 16, customers must be required to verify their age before being able to make any subscription or purchase entry into the lottery. (The licensee is expected to conduct a programme of random checks of users who self-verify for compliance with age restrictions)
    • in every other case, licensees must verify the age of a customer before the customer is able to:
      • access any free-to-play versions of lotteries (for example, instant win or digital scratchcard lotteries) that the licensee may make available
      • in any case, participate in a lottery.

References

1 A ‘low frequency lottery’ is one of a series of separate lotteries promoted on behalf of the same non-commercial society or local authority, or as part of the same multiple society lottery scheme, in respect of which there is a period of at least two days between each lottery draw.

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Proposed changes to social responsibility code provision 3.2.11
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