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  3. Fourth National Lottery Licence: Regulatory Handbook

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Fourth National Lottery Licence: Regulatory Handbook

The Commission’s regulatory handbook sets out our regulatory approach to the National Lottery.

Published
1 February 2024

Last updated
8 February 2024 - Changes

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  1. Contents
  2. Volume two: Monitoring Performance Framework
  3. 11. Condition 8: Protecting Participants’ Interests

11. Condition 8: Protecting Participants’ Interests

11.1 This section provides guidance on the factors and types of evidence we may have regard to in the context of compliance with Condition 8.

11.2 Whilst Condition 8 concerns the protection of Participant interests in the context of the overall running of the National Lottery, similar obligations and outcomes are set out in Section 6 Licences regarding the protection of Participant interests in the context of the promotion of specific Games. As such, the material in this section also applies to Section 6 Licence obligations where relevant. Section 20 provides some additional guidance in relation to subject matters, images and themes used in the promotion of Games and their potential impact on Participant interests.

11.3 As set out in Condition 8.21, the same standards for protection of Participant interests apply equally to Games licensed under Section 6 of the Act and to any Free Games that may be offered by the Licensee. Therefore, the information in this section also applies to Free Games, where applicable.

11.4 This section covers:

  • general guidance on demonstrating compliance
  • illustrative examples of factors and types of evidence that we may consider relevant, in relation to Participant’s interests specified in Condition 8.2, namely:
    • preventing play by persons under the Legal Age Limit
    • not encouraging excessive play
    • restricting use of credit
    • provision of adequate information about Games
    • an adequate complaints and redress system
    • payment of Prizes
    • protection and support for Prize winners.

General guidance on demonstrating compliance

11.5 At a general level, when considering compliance with Condition 8 we may have regard to the Licensee’s organisational approach to protecting Participants’ interests, including through developing a Participant Protection Strategy in accordance with Conditions 8.17 and 8.18, and supporting it with financial contributions (or equivalent measures) towards research, prevention and treatment of gambling-related harms in accordance with Condition 8.19. We will also consider how the Licensee evaluates its approach, and implementation of its Participant Protection Strategy.

11.6 Where the Licensee’s Application included specific proposals in relation to the implementation of its Participant Protection Strategy, we may take account of any failure by the Licensee to implement those proposals in full, in assessing whether the Licensee has fulfilled the requirements of Condition 8.1. At the same time, we recognise that the Licensee’s approach may reasonably change over time in order to meet the outcomes set out in the Fourth Licence.

11.7 Therefore, we may also consider if and how the Licensee's approach has developed over time, including in response to:

  • a range of evidence on the effectiveness of its Participant Protection Strategy
  • market, legal, regulatory or technological developments relevant to the National Lottery
  • relevant changes in circumstances that might affect the Licensee’s ability to protect Participants’ interests. These include changes in the Licensee’s conduct (for example, changes in marketing strategy); and changes outside the control of the Licensee (for example, broader shifts in relevant consumer behaviour or legislation).

11.8 In any assessment of compliance we will have regard to relevant evidence from the research community, and evidence of Best Practice, including from lottery and gambling operators in the UK and internationally, and as highlighted in relevant publications such as our National Strategy to Reduce Gambling Harms.

11.9 For the avoidance of doubt, when considering any evidence related to gambling harm, we will take into consideration the extent to which such harm appears to be linked to the National Lottery as opposed to other products or activities.

11.10 Further considerations in relation to specific elements of Participants’ interests are set out below, including potential factors that we may have regard to in each case.

11.11 In the context of assessing the Licensee’s compliance with Condition 8.3, we may have regard to factors such as the Licensee’s approach in the following areas:

  • providing any training and guidance to relevant third parties (including Retailers), and evaluating its effectiveness
  • verifying the age of Participants, including any evidence on effectiveness and alignment with Best Practice
  • assessing risks of play by persons under the Legal Age Limit and integrating these in relevant operational decision making, including in relation to customer interaction, Game design and research, marketing and advertising, and changes to the use of distribution channels
  • responding to and addressing identified failings in the above areas
  • promoting awareness and education related to prevention of underage play, for example among parents.

11.12 Examples of relevant evidence on the extent and risks of play by persons under the Legal Age Limit may include, among other things:

  • measures capturing incidents of underage play, reported or otherwise identified
  • survey evidence, for example, our 2019 Young People Survey found that three percent of 11–15-year-olds claim to have played National Lottery Games online using their parents' accounts with permission, and a further one percent without parental permission
  • and/or results from any sample-based tests concerned with likely success of attempts by persons who are under the Legal Age Limit to play any Game.

Not encouraging excessive play

11.13 In the context of compliance with Condition 8.4, we may have regard to factors such as the Licensee’s approach in the following areas:

  • providing training and guidance to relevant third parties (including relevant Retailers), and evaluating its effectiveness
  • assessing risks of excessive play and integrating these in relevant operational decision making, including in relation to customer interaction, Game design and research, marketing and advertising, and changes to the use of distribution channels
  • identifying potential cases of excessive play and/or Participants who are at risk of excessive play
  • providing information to Participants that may mitigate risks of excessive play. This may include arrangements for self-exclusion, and/or information about other support and tools
  • responding to and addressing identified failings in the above areas.

11.14 Examples of relevant evidence on the extent and risks of excessive play could include, among other things:

  • measures aimed at capturing the incidence of excessive play. For example, survey evidence we may collect. We will also have regard to the Licensee’s own research on the percentage of National Lottery Participants who report or exhibit signs of excessive play
  • methods to identify specific instances of excessive play, or Participants who are at risk of excessive play. For example, findings from the use of algorithms to identify markers of harm
  • measures aimed at estimating the extent to which Retailers are taking steps to prevent excessive play based on observed Participant behaviour
  • measures related to specific Games or Game characteristics that help to assess the risk of encouraging excessive play (including through the use of appropriate tools, for example Asterig or GamGard)
  • data on play patterns, spending patterns and distribution, including the percentage of Participants who meet or exceed specific spending or frequency of play thresholds
  • survey evidence, for example concerning awareness and use of self-control tools.

11.15 We expect to have particular regard to those Games or Game types that we consider are more conducive to excessive play. For example, based on the current Game portfolio, we expect our consideration of risks of excessive play might include a greater emphasis on scratchcards and interactive instant win Games than on Draw-based Games. Similarly, we may have particular regard to any specific socio-demographic groups that, based on relevant evidence, may be more vulnerable or susceptible to excessive play15 .

11.16 We consider that the notion of excessive play may be dependent on individual characteristics; for example, a certain pattern of play may be excessive for one Participant but not for another due, to differences in individual circumstances (for example financial).

Restricting use of credit

11.17 Conditions 8.5 and 8.6 require the Licensee to restrict the ability of Participants to pay for Games through the use of credit cards or other credit facilities. The Licence drafting is intended to capture restrictions to use of credit where it is reasonably within the control of the Licensee. For example, Conditions 8.5 and 8.6:

  • would not prohibit the use of a credit card to purchase a Game in a supermarket or over a supermarket website (assuming not operated by the Licensee or a Related Party) as this is not reasonably within the control of the Licensee
  • would prohibit the use of credit cards or credit facilities on a website operated by the Licensee or a Related Party, where the Licensee could reasonably put in place controls to prohibit the use of credit
  • would prohibit the Licensee or Related Parties from providing credit facilities to Participants.

11.18 We expect the Licensee to consider how it effectively meets this requirement throughout the Fourth Licence Term as payment technology and consumer behaviour evolves. This may be in response to:

  • technological advances that improve the ability of the Licensee to restrict the use of credit to purchase Games
  • introduction of new credit products.

11.19 We expect the Licensee to consider how the availability of credit may interact with the protection of Participant interests more broadly. For example, with regard to the training, guidance and evidence mentioned in paragraphs 11.3 and 11.4 above in relation to Retailers, the Licensee may have regard to any steps that Retailers can take in cases where use of a credit card by certain Participants appears to facilitate excessive play.

Provision of adequate information about Games

11.20 In assessing compliance with Condition 8.9 we expect to take into account that Participants may have an interest in accessing various types of information relating to the National Lottery. Examples may include information that allows people to:

  • access and play National Lottery Games in accordance with applicable rules
  • form an opinion on potential risks associated with playing National Lottery Games
  • monitor or control their play
  • understand the level of Prizes available and likelihood of winning
  • check if they have won a Prize and how they should collect it
  • seek redress, including how to make complaints and access alternative dispute resolution, if required.

11.21 In the context of compliance with Condition 8.9, we may have regard to factors such as the Licensee’s approach in the following areas:

  • providing training and guidance to Retailers related to information about Games
  • developing channels of information provision that align with Best Practice and satisfy Participant needs, including as Participant needs evolve
  • receiving and handling of enquiries
  • addressing any observed or reported identified failings in the above areas.

11.22 Examples of relevant evidence on the extent and quality of information provision, as well as any relevant risks, could include:

  • measures aimed at capturing the extent, accuracy and quality of any information made available at point of sale
  • survey evidence measuring the extent of Participants’ satisfaction with the accessibility and quality of information available at point of sale
  • survey evidence measuring Participants’ understanding of the information about Games and any barriers they experience in accessing this information
  • details of complaints from Participants in relation to information about Games.

11.23 The unavailability of information, or provision of inaccurate or incomplete information, may constitute non-compliance with Condition 8.9. When considering any such instances we will consider factors such as the materiality of any adverse impacts on specific Participants, as well as the breadth of impact in terms of the number of individuals affected16.

11.24 At the start of the Fourth Licence, we expect the Licensee to consider how it manages any changes in the way information is provided to Participants, including for Games that have been carried over from the Third Licence. In doing so, we expect the Licensee to consider any risk of harm to Participant interests from such changes and how this may be mitigated, for example in the event that the location of information (or the process for accessing it) is changed.

Provision of an adequate complaints and redress system

11.25 In the context of compliance with Conditions 8.10 and 8.11, we may have regard to factors such as the Licensee’s approach in the following areas:

  • receiving and handling of complaints
  • identifying and addressing any instances where the complaints have not been adequately addressed
  • aligning with relevant guidance and standards related to complaints and alternative dispute resolution as published by us, as well as any other relevant third-party guidance, Best Practice, or standards
  • providing training and guidance to staff related to complaints and redress, and monitoring staff performance in this area.

11.26 Examples of relevant evidence on the extent to which complaints can be easily pursued and are quickly and openly resolved may include: - measures aimed at capturing the speed, accuracy and quality of the process: for example, the length of time to reach resolution, and the volume of complaints being escalated to an independent dispute resolution mechanism before resolution

  • measures aimed at capturing any barriers to the effective resolution of complaints: for example, metrics detailing the length of time of any periods where complaints or redress online systems were unavailable, or not of a reasonable speed of access
  • survey evidence of Participant satisfaction with the complaints process, including whether Participants have found it easy to pursue a complaint and reach resolution, and whether they have perceived the process as transparent.

Payment of Prizes

11.27 In the context of compliance with Condition 8.13, we may have regard to factors such as the Licensee’s approach in the following areas:

  • communicating Game results or outcomes
  • paying Prizes
  • addressing any observed or reported identified failings in the above areas (including for example due to fraud).

11.28 Examples of relevant evidence on the speed and accuracy of the payment of Prizes and information about winning tickets, as well as any relevant risks, could include:

  • measures aimed at capturing the extent, accuracy and quality of information made available to Prize winners and the speed and accuracy of payments to Prize winners: for example, metrics capturing the number of payments found to be of an incorrect value and requiring compensation under Condition 8.13(c)
  • survey evidence of Participant satisfaction with the ease of finding out whether they have won, and with the process for receiving payment where applicable
  • the numbers and total value of unclaimed Prizes
  • details of any complaints from Participants related to the payment of Prizes or to finding out whether they have won.

Protection of and support for Prize winners

11.29 In the context of compliance with Conditions 8.14 to 8.16, we may have regard to factors such as the Licensee’s approach in the following areas:

  • determining which Prize winners are offered support and what degree and type of support is provided
  • identifying and addressing any instances where Prize winners may not have received adequate protection and support
  • providing training and guidance to staff related to the protection and support of Prize winners.

11.30 Examples of relevant evidence on the extent and quality of the protection (for example, Prize winner anonymity) and support for Prize winners, as well as any relevant risks, could include, among other things, details of any complaints from Participants in relation to the protection and support of Prize winners

References

15 While we do not seek to provide a prescriptive definition of Participants who may be more vulnerable or susceptible to excessive play, these are likely to include (but are not limited to):

  • Vulnerable Participants, which is likely to include people who gamble more than they want to, people who gamble beyond their means and people who may not be able to make informed or balanced decisions about gambling due to, for example, mental health, a learning disability or substance abuse relating to alcohol or drugs. Vulnerability may be long-lasting or temporary.
  • Problem gamblers, meaning gamblers who experience severe or serious levels of harm. Problem gambling occurs when someone gambles to a degree that compromises, disrupts or damages family, personal or recreational pursuits.
  • Moderate risk gamblers, meaning gamblers who experience a moderate level of problems, leading to some negative consequences.

16 For reference, we publish details of Third Licence breaches due to the provision of inaccurate information (such as Prize outcomes) on our website, which provides examples of inaccuracies we have considered severe during the Third Licence Term. For the avoidance of doubt, any issues related to inaccurate information during the Fourth Licence is subject to the Fourth Licence conditions and to our Fourth Licence Regulatory Model.

Previous section
10. Conditions 6 and 7: Fitness and Propriety of Critical Function Employees, Lottery Beneficiaries and Lottery Supervisors Next section
12. Condition 9: Ensuring Access to the National Lottery
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