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Customer interaction guidance for remote gambling operators: Consultation Response

This response sets out our position in relation to the consultation around the guidance on new, more prescriptive, customer interaction requirements for operators.

Published: 23 August 2023

Last updated: 23 August 2023

This version was printed or saved on: 27 February 2024

Online version: https://www.gamblingcommission.gov.uk/consultation-response/customer-interaction-guidance-for-remote-gambling-operators-consultation

Executive summary

The Gambling Commission sets requirements for gambling businesses to conduct customer interaction in order to identify and protect customers at risk of harm. This forms part of a wider programme of work by the Commission to drive and support industry best practice in identifying customers at risk of harm and taking action to reduce the risk of harm, in support of the third licensing objective to ‘protect children and the vulnerable from being harmed or exploited by gambling’.

The Commission introduced new, more prescriptive, customer interaction requirements for remote gambling operators in Social Responsibility (SR) Code Provision 3.4.3, and the majority of these came into force on 12 September 2022, with requirement 10 coming into force on 12 February 2023. The requirements connected with taking into account the guidance will come into force on 31 October 2023.

In January 2023, we closed a consultation on proposed guidance relating to these new requirements (opens in new tab) which we proposed gambling operators would be required to take into account. The Commission has considered the responses received in relation to this consultation before making a fresh decision on guidance related to Social Responsibility (SR) Code Provision 3.4.3.

The Commission does not always consult on guidance. On this occasion, there was a specific opportunity to use the consultation exercise to explore recent experiences of stakeholders in the implementation of a set of new requirements and we hoped that there would be examples of good practice to share during the consultation period.

Following the consultation, the Commission has amended the Customer interaction guidance - for remote gambling licensees (Formal guidance under SR Code 3.4.3). We have published the revised guidance alongside this response and our website will also be updated over the coming weeks. Remote gambling operators will be required to take into account the new guidance from 31 October 2023.

Introduction

We received 51 written responses to the consultation from the following categories of respondents:

We also held a workshop with gambling operators in December 2022, during the consultation period, to gather feedback and answer any queries associated with the consultation. The workshop was with gambling operators as the proposed guidance sets out detailed information about how a gambling operator can meet the requirements and it is important to take account of gambling operator experiences of implementing the requirements.

This consultation related to proposed guidance associated with Social Responsibility (SR) Code Provision 3.4.3. The following issues were not within the scope of this consultation exercise:

On the topic of financial risk, the Commission committed to a separate consultation on the three key financial risks which it has identified in that context: significant unaffordable losses over a short period (binge gambling), significant unaffordable losses over a sustained period, and customers who are particularly financially vulnerable. Following the publication of the white paper connected with the Government's Review of the Gambling Act 2005 (opens in new tab), the Commission launched a consultation on 26 July 2023 on proposed changes to Licence Conditions and Codes of Practice (LCCP), Remote Gambling and Software Technical Standards (RTS), and arrangements for Regulatory Panels (opens in new tab). This consultation includes our proposals for financial risk and financial vulnerability checks.

Some of the consultation responses covered issues connected with the substance of the requirements of Social Responsibility (SR) Code Provision 3.4.3, rather than the guidance associated with these requirements. This feedback has been noted, but changes to the requirements were not considered due to such changes not being in scope of the consultation and the requirements having previously been subject to consultation.

Introductory consultation questions

In this consultation, the Commission piloted some new introductory questions. These were to help us better understand the perspective of the responses we receive to inform and tailor our policy decisions. They included questions about the frequency with which people gamble, whether they have gambled online in the past four weeks and whether they have experienced negative consequences as a result of their own or someone else’s gambling.

We received feedback that these questions were not relevant for people who were responding on behalf of an organisation and have amended them for future consultations. They will now only be asked primarily of people responding as individuals.

Summary of responses

Topic 1: The overall format, structure and language of guidance

Proposals

The consultation proposed that guidance would be structured into the following 4 main sections:

In relation to each requirement, the document would adopt the following structure:

Language such as 'must' or 'the Commission expects' would be used in contexts where the guidance is intended to reflect the requirements of Social Responsibility (SR) Code Provision 3.4.3.

Language such as ‘should’, would be used to denote an approach or action that is not required by Social Responsibility (SR) Code Provision 3.4.3, but which gambling operators would be required to consider.

Consultation questions

  • To what extent do you agree that guidance should include additional information which may assist operators but which they are not required to take into account?
  • Do you have any comments on the overall structure, language and format of the proposed guidance document?

Respondents’ views

Responses on the format of the guidance were broadly positive, including that it was clear and easy to understand and that the format was straightforward. Some respondents said the document was well-structured, where others highlighted areas for improvement. Suggestions from respondents included parts they considered would be better suited to be included in Social Responsibility (SR) Code Provision 3.4.3 itself (rather than guidance) and particular areas where they considered that the guidance should be more explicit. These issues are explored further in relation to Sections B, C and D of the proposed guidance.

Responses concerning the language of the proposed guidance document were mixed. A number of respondents said the guidance document should be very clear on what ‘must’, ‘should’ and ‘could’ means, although they did not highlight specific examples where they considered the draft guidance used inappropriate language. Some of the responses centred not on the guidance document itself, but on what their experiences might be undergoing regulatory compliance processes, such as compliance assessments. We have ensured that relevant departments within the Gambling Commission are aware of the nature of these responses.

Respondents' views on the use of additional information were split, with a very small majority preferring that it would be included.

Our position

As stated in the Gambling Commission’s Statement of Principles for Licensing and Regulation, ‘the Commission will generally use the least intrusive regulatory tool to achieve compliance and will ensure that any regulatory action is proportionate to the importance of the matters to which it relates, having regard to its risk assessment'.

We consider that the principle of issuing guidance which gambling operators must take into account remains appropriate, meets the test of the least intrusive regulatory intervention required to meet the policy aims, and is designed to be helpful to gambling operators at this time.

We have decided to retain the overall structure of the document: Overarching customer interaction processes, Identification of customers at risk of harm, Take action for customers at risk of harm and Evaluate. We consider this structure to be helpful to sit alongside the requirements of Social Responsibility (SR) Code 3.4.3.

We have reviewed the use of language in the guidance and ensured that we consistently apply 'must' language when quoting or referring to the requirements, and use 'should' language when referring to guidance which must be taken into account.

We have decided that the guidance document will include additional information to assist gambling operators. In order to address comments by respondents about clarity, we have taken steps to ensure that such content is clearly marked. The alternatives would be either to remove content which we consider may be helpful, or to include it as content which gambling operators are required to take into account. Neither of these alternatives were considered the best solution - we did not consider removing all content which may be helpful to gambling operators to be desirable, and we also did not consider it desirable to elevate all such content to a level where it was required to be taken into account. We have therefore retained some of the additional information sections and marked clearly that these are not required to be taken into account.

We have changed the numbering in the guidance document to a solely numbered format rather than the previous number and letter, therefore, for example 1A becomes 1.1. This was to avoid any confusion when referencing to paragraphs in the guidance and requirements in the provision itself.

Topic 2: Introduction and Section A of the guidance – overarching content

Proposals

We proposed that the introduction section in the guidance document explains how the Gambling Commission intends the guidance to be used by gambling operators and how the Commission will itself use the guidance on Social Responsibility (SR) Code Provision 3.4.3. We explained that we are interested in views on the approach set out.

We also proposed that the first main section of the guidance document (Section A) addressed requirements 1 and 2, which relate to the overarching requirement for customer interaction and the requirement to take into account the guidance.

Consultation question

    Do you have any other comments on the introduction section or on Section A of the proposed guidance document?

Respondents’ views

A number of respondents to this question discussed the importance of informal and ongoing collaboration between the Commission and gambling operators, to allow for engagement outside of formal compliance assessments.

Some respondents commented that introduction and Section A clearly demonstrate the Commission’s expectations and would allow gambling operators to have a clear understanding and clear definitions to refer back to. One respondent also said that the guidance creates sufficient scope for a variety of approaches between gambling operators.

Our position

We have retained an introduction section which sets out the Gambling Commission's approach to using the guidance.

In particular, in the paragraph ‘How the Commission will use this guidance’, the guidance document states: ‘Social responsibility (SR) Code Provision 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’. We consider that this helps gambling operators understand how the Commission will use the guidance in its work, a query that was raised in some responses.

We have also decided to retain Section A in order to explain the overarching requirement to conduct customer interaction.

We will continue to engage with the gambling industry outside of formal assessment through regular engagement at Chair and Chief Executive Officer (CEO) Roundtables and through ad hoc discussions. The guidance is designed to evolve as necessary over time, and it is important that we receive information about good practice and lessons learned. Although not a statutory requirement, when considered appropriate we may consult on guidance and engage in other ways.

Topic 3: Section B of the guidance – Identify customers at risk of harm

Proposals

The consultation proposed guidance relating to the indicators of harm listed at requirement 5. We explored the issue of whether more detailed guidance should be provided about what are to be considered 'strong’ indicators of harm. We asked for views on the increasing scale of indicators - and explored whether the 'stronger' category should be reclassified as 'medium-strong' in order to be clear about the increasing scale.

Consultation questions

  • Indicators: Do you have any comments on the extent to which the Commission should provide further guidance about the types of indicators that should lead to different levels of action?
  • Strong indicators: To what extent do you consider that the Commission should set out good practice examples of ‘strong’ indicators of harm? Please explain what examples could be included in the guidance document about operator good practice in setting a level for ‘strong’ indicators of harm.
  • Do you have any other comments on Section B of the proposed guidance document?

Respondents’ views

Responses were mixed about the amount of detail that should be included in Section B of the guidance relating to indicators of harm. Some respondents considered that more detail would be helpful, but others said less detail would be more appropriate. For example, some respondents requested further information on how to implement and operationalise the indicators, whereas others felt that giving more detail in the guidance would be unnecessary and may reduce innovation by gambling operators in customer interaction approaches.

Those respondents who sought additional guidance most frequently requested further information on the use of gambling management tools and when their use becomes an indicator of harm. One requested the guidance go further and specify values in some areas, such as time and spend.

Respondents shared examples of what could be included in the guidance. The key examples that were referenced in these responses were:

Some respondents provided positive feedback on this section of the guidance, agreeing with the indicators and stating that the guidance which accompanies the indicators was helpful. Some highlighted that, although the indicators and guidance were in line with current studies, they should be future-proofed and be updated as new research is published and keep up with the pace of industry developments in this area. One respondent fed back that it was positive that ‘time indicators’ have been included.

A number of respondents commented on the indicators in requirement 5 itself which they considered to be too vague or broad. Some said that it could be difficult for gambling operators to demonstrate compliance during assessments and asked for further clarity on how to operationalise the guidance.

One respondent said that ‘strong indicator’ may be interpreted in two ways as an indicator on its own that may be strongly indicative of harm or as a behaviour that appears particularly pronounced or unusual. Respondents requested that more information be included on assessing multiple indicators collectively, and raised that strong indicators are rarely present in isolation. A number of respondents said that the Gambling Commission should set out good practice examples of ‘strong’ indicators of harm.

We received examples from members of the public and a charity (referring to their service users) of their experiences of gambling related harms.

As customer spend is an indicator included in the list, some gambling operators responded to this question to highlight their feedback and concerns about affordability and financial risk matters. Some respondents believed all references to spend should be removed from the guidance before the consultation on this topic following the white paper connected with the Government's Review of the Gambling Act 2005 (opens in new tab) is completed.

Some respondents from gambling operators shared examples of software systems they have developed that allow them to monitor, evaluate and act on player behaviour, as well as case studies of how they might integrate the indicators into their systems.

Our position

We have added detail to the guidance connected with comments made by respondents about how indicators can be assessed as 'strong':

  • there could be one indicator which itself is a strong indicator
  • there may be a behaviour that is an indicator because it is particularly pronounced or unusual
  • there may also be a number of less serious indicators might cumulatively amount to a ‘strong’ indicator.

This point - concerning multiple indicators which cumulatively indicate a more concerning picture - is a point which the Gambling Commission has often made in connection with indicators of harm and customer interaction, and which we agree would be helpful to make explicit in the guidance.

However, we want to allow some flexibility on the method of implementation. We have therefore not specified which indicators are 'strong' in the requirements - this allows the facts of each case to be considered. To cover which indicators we consider are strong in the guidance would be to set out very detailed information about the form and nature of gambling operator algorithms and this level of detail was not considered appropriate at this time. Although some respondents (including gambling operators) did argue for such detail, this is at odds with other industry responses and our wider conversations with gambling operators where they frequently call for some flexibility on the method of implementation and the ability to trial different approaches.

We have amended the guidance to reflect comments made during the consultation about the suggestions for detail - including making reference to evasiveness, expressing anger, and not withdrawing winnings within the guidance for indicators of harm.

Some suggestions by respondents for further detail for the guidance related to issues which were already covered by the proposed guidance - for example, previous self-exclusions and making complaints. Previous self-exclusion is included in the guidance - this has been set out in previous Commission documents that gambling operators should take particular care in relation to previous self-excluded customers care - such as when new indicators of harm are flagged.

Suggestions for further detail on spend will be considered in connection with the consultation on financial vulnerability and financial risk (opens in new tab) that was launched on 26 July 2023.

We note the responses from members of the public and a charity (referring to their service users) of their experiences of gambling related harms. These examples added further weight to the inclusion and/or retention of the indicators of harm that had been proposed in the consultation.

Topic 4: Section B of the guidance continued – Identify vulnerability

Proposals

Customers who are vulnerable may be significantly less able to understand the risks of gambling and the terms and conditions, and they may be at higher risk of experiencing negative outcomes from gambling. This is why we considered it important that the guidance supports the requirements of Social Responsibility (SR) Code Provision 3.4.3 by providing more information about which factors may suggest that a customer is in a vulnerable situation, and the types of action that a gambling operator can take.

We proposed in the consultation to explain in the guidance that a customer in a vulnerable situation is ‘somebody who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care’. This general approach was adopted in the Gambling Commission’s first Corporate Strategy 2018 - 2021 (PDF), where the Commission discussed the importance of an approach which took account of both the personal circumstances of the consumer and the actions of firms, as well as consideration of vulnerability which may be temporary or intermittent. This more dynamic approach to vulnerability has underpinned our proposed approach in the guidance document which we set out for consultation.

The proposed guidance document also set out the factors which we considered might make an individual more vulnerable to experiencing gambling related harm. These are personal and demographic, situational, behavioural, market related, and access issues. These issues were identified following an assessment of the approaches to vulnerability adopted by other regulators and a range of international bodies.

Consultation questions

  • Vulnerability: Do you have any comments on the factors which might make a customer more vulnerable to experiencing gambling related harms or examples of how operators should identify vulnerable customers and take action?
  • Indicators: Do you have any comments on the extent to which the Commission should provide further guidance about the types of indicators that should lead to different levels of action?
  • Strong indicators: To what extent do you consider that the Commission should set out good practice examples of ‘strong’ indicators of harm? Please explain what examples could be included in the guidance document about operator good practice in setting a level for ‘strong’ indicators of harm.
  • Do you have any other comments on Section B of the proposed guidance document?

Respondents’ views

We received examples from consumers of the interactions they have had with gambling operators, and in some cases how these were perceived to be too little or too late, missing opportunities to identify and act on clear indicators of harm.

Other respondents (including those representing charities) shared relevant research and case studies about gambling and vulnerability.

We also received examples from gambling operators of how they are already identifying and monitoring vulnerability. These included developing a ‘vulnerability policy’ and training programme, automated systems and ongoing monitoring and more efficient communication channels.

A number of responses from gambling operators to the question relating to vulnerability suggested that the factors that might make a customer more vulnerable to gambling related harms were ‘too broad’. There were concerns that this could lead to a disproportionate amount of customer interactions taking place which would be inconvenient to customers, cause significant costs to gambling operators and impede the protection of genuinely vulnerable people. Industry respondents considered that this part of the guidance could be exploited to increase the risk of fraudulent claims being made.

Some respondents suggested additional factors that they felt should be added to the table. Some respondents requested further examples of vulnerability, including more information on intermittent, temporary and permanent vulnerabilities and how these might be monitored. Some asked for further information on factors such as age and vulnerability (particularly in reference to ‘young adults’ - those aged 18 to 24 years of age).

Some suggested that the approach indicated that gambling operators have a ‘duty of care’, which they do not believe exists in the Gambling Act 2005 (opens in new tab).

Some respondents requested that the guidance include a definition of ‘gambling related harms’.

Respondents from gambling operators also raised concerns here about the expectations that the guidance places on employees to have discussions with customers about their experiences of vulnerability, and the impact this could have on them. While many agreed that staff should be well trained in identifying obvious signs when a customer is vulnerable, they requested that the guidance acknowledge that they are not trained medical professionals and 'may not always make perfect decisions'. Some also asked for further guidance on whether the Commission expects gambling operators to actively seek out information from customers on vulnerability.

Our position

We consider it is absolutely right that remote gambling operators consider how consumers might be in a vulnerable situation and how they can support them if they are aware of this situation. This is why the requirements of Social Responsibility (SR) Code 3.4.3 include requirements relating to vulnerability.

There is no requirement to screen all customers for all these vulnerabilities - at this time, we consider this would represent a disproportionate burden on customers as well as gambling operators.

As set out in the consultation, the Gambling Commission does not require in Social Responsibility (SR) Code Provision 3.4.3, or set out in the guidance document that gambling operators should assess all of their customers for all forms of vulnerability - requiring all customers to provide detailed health information in order to assess any factors which may indicate that a customer is vulnerable to gambling related harm is likely to be disproportionate to the risks and may have a disproportionate negative impact on persons with certain protected characteristics. This was borne out in the responses where a number of respondents misunderstood the requirements and considered that screening all customers was a requirement, and that this would be an unnecessary intrusion into the private lives of customers. We can therefore reassure and reiterate that our requirements on vulnerability, and the proposed guidance associated with vulnerability, primarily focus on circumstances where gambling operators should identify indicators of vulnerability from information already available to them.

Following consultation, we have added additional wording to the 'Aim' section of the guidance associated with this requirement, reiterating our position that: 'It is not the aim of this requirement that licensees screen all customers for each of the factors of vulnerability which are listed in the guidance, but rather that they consider and act on information that they have available to them.' This reflects that there have been compliance and enforcement cases where a gambling operator was aware of a customer in a vulnerable situation but did not consider this vulnerability indicator of harm when considering appropriate customer interaction approaches.

Following consultation, we also consider it appropriate for the guidance to take the following approaches:

  • include all the factors that were listed in the proposed guidance - whilst the factors of vulnerability are broad, the requirement in Social Responsibility (SR) Code Provision 3.4.3 relating to what action must be taken and the associated guidance about how this should be achieved are proportionate
  • however, we have made some changes within the guidance relating to examples associated with these factors for clarity and to focus on the examples we considered would be most useful and relevant. For example, we have reordered some content to show the escalating nature of some of the actions that can be taken - showing lighter-touch actions first
  • in the 'Access' subcategory, we removed the example of dyslexia, considering that the wording of 'poor literacy or numeracy skills' more accurately describes the key issue relating to Access which may indicate - but not necessarily will indicate - that a customer is more vulnerable. We have retained the example actions that a gambling operator might take in response to concerns about Access factors of vulnerability that they have been made aware which were ensuring easily digestible information is made available for all customers, and reviewing the customer account for other indicators of harm, and continuing to monitor closely
  • emphasise the importance of temporary or intermittent vulnerable situations or factors - the guidance has been amended to show how some of the existing examples in the guidance set out for consultation related to temporary or intermittent situations
  • reiterate the importance of gambling operators using all information available to them as part of their customer interaction approaches and taking action to reduce harm to consumers
  • include further detail on the considerations relating to young adults, who we consider to be vulnerable to help explain the content of the guidance more fully
  • include in the ‘additional information’ section links to research about gambling harms which gambling operators may wish to consider further over time. This additional information is not required to be taken into account. We did not consider it necessary to define gambling harms in this section of the guidance as the relevant research helps provide any additional information that may help gambling operators in their consideration of harms.

We do not consider it necessary or appropriate to include content in the guidance relating to staff wellbeing for those who may be handling customer interactions. This is a matter for gambling operators as employers to consider as is the case for businesses which handle sensitive matters in other sectors (for example customer service representatives in the financial or energy sectors dealing with sensitive issues such as challenges in paying bills). However, it is not necessary for us to specify this in the guidance as a matter which gambling operators would be required to take into account. We recognise that gambling staff are not trained medical professionals but note that there is nothing in the requirements themselves or the associated guidance that indicates a need for staff to be medical professionals or to diagnose medical conditions.

Further equalities considerations

In the consultation, we set out that the Commission has due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations. We explored two issues in particular in relation to potential equalities impacts associated with the guidance and asked for views.

In setting the requirements for customer interaction, and drafting the proposed guidance, the Commission considers that any decisions to cease a customer relationship or place restrictions on a customer should be tailored to the customer’s individual circumstances and not based solely on personal, demographic or other relevant factors for the customer. We flagged that we considered that the latter approach could have a disproportionate effect on persons with certain protected characteristics.

Not everyone who is in the different circumstances set out in the guidance is automatically vulnerable to gambling harm - the factors may not be a representation of vulnerability in any given situation. Importantly, our use of the factors within the guidance also does not mean that the Commission seeks for set responses to every customer in these same circumstances - vulnerabilities differ and the appropriate response will depend on the situation.

Following consultation, we reiterate that decisions for customer interaction should take account of the full information that is available to the gambling operator and not be based on any one vulnerability factor. This is because - as respondents rightly pointed out - a customer may be in vulnerable circumstances which do not affect their gambling and should not influence decisions on customer interaction.

The final guidance indicates that action must be tailored to the individual circumstances, depending on the number and severity of the indicators of harm, and it may most often be appropriate to offer support to customers who may be in a vulnerable situation, rather than impose any restriction on gambling.

Expanding on the position set out in the consultation document, we consider that the imposition of any restrictions that were not tailored to the individual circumstances of a customer could have a disproportionate effect on persons with certain protected characteristics. We therefore do not seek in the guidance to support any such one-size fits all approach.

Data protection considerations

We received some queries as part of the consultation responses concerning data protection considerations.

Some key points to take into account are as follows.

Gambling operators are already required to process personal data for the purposes of consumer protection. This includes for the purposes of self-exclusion and those gambling operators who are trialling the sharing of information about customers at risk of harm in the GamProtect model. Therefore gambling operators already have processes in place for the processing of personal data, which at times may include Special Category Data.

Customer interaction requirements have been in place for many years. This requires gambling operators to take account of indicators of harm and process that data in order to conduct customer interaction to minimise the risk of harm. Some gambling operators told us in their responses that they already process data in relation to vulnerability due to their introduction of vulnerability policies. These vulnerability policies should already be taking account of the processing of personal data, which at times may include Special Category Data.

The Information Commissioner’s Office (ICO) provides detailed guidance about the lawful bases for legal processing of data, including where relevant Special Category Data. However, please note the points in the previous paragraphs that reflect that the Commission is not suggesting that gambling operators routinely gather and process data about all the different factors of vulnerability for all customers as this would be unduly intrusive and disproportionate.

In compliance cases where vulnerability indicators of harm had not been acted on, the gambling operator was already collecting and processing data about the vulnerability. For example, in a case about a customer who had received a lump sum for ill-health retirement, the information about ill-health retirement was being processed in relation to source of funds, but was not acted on in relation to vulnerability. Therefore, gambling operators should already be considering how they are storing and processing such data.

Gambling operators may wish in particular to consider ICO guidance in relation to the legal obligation basis for data processing (opens in new tab) and the ICO guidance in relation to special category data (opens in new tab). This guidance includes information about how in order to lawfully process special category data, including that a gambling operator must identify both a lawful basis under Article 6 of the United Kingdom (UK) General Data Protection Regulation (GDPR) and a separate condition for processing under Article 9.

Particular attention is drawn to Paragraph 18 of Schedule 1 of the Data Protection Act 2018 (opens in new tab), which relates to Safeguarding of children and of individuals at risk, and to the ICO's information about an appropriate policy document. An appropriate policy document is a short document outlining your compliance measures and retention policies for special category data. The Data Protection Act 2018 says you must have one in place for almost all of the substantial public interest conditions (and also for the employment, social security and social protection condition), as a specific accountability and documentation measure.

Topic 5: Section C of the guidance – Take action for customers at risk of harm

Proposals

The proposed guidance included a scale of interactions which is also reflected in a diagram setting out a visualisation of the types of actions at increasing strength levels (from early generic customer interactions through to very strong customer interactions). We explored whether changes should be considered to make the increasing scale of actions clearer in the guidance.

The proposed guidance in relation to the take up of new bonus offers confirmed that where strong indicators of harm have been identified, the take up of new bonuses should be prevented as soon as practicable. The proposed guidance content was intended to assist gambling operators to identify:

In the consultation, we set out that the draft guidance was intended to assist gambling operators to implement automated processes to ensure that strong indicators of harm are acted on in a timely manner, in line with data protection requirements.

Consultation questions

  • Increasing scale of actions: Do you have any comments on the proposed scale of actions which operators can take, to reflect how actions should increase according to the nature of the indicators of harm?
  • Targeting bonus offers: Do you have any comments on the guidance on the requirement to prevent the take-up of new bonus offers and the guidance on issues for customers who are part way through a bonus offer?
  • Automated solutions and manual review: Do you have any views on the guidance relating to automated processing and the possible alternative approach to a manual review which would mean operators undertake a substantive review only where the decision was contested by the customer?
  • Other comments Section C: Do you have any other comments on Section C of the proposed guidance which relates to taking action when there are indicators of harm?

Respondents’ views

Increasing scale of actions

A small number of respondents drew attention to the volume of interactions that gambling operators are already undertaking, both directly through an employee and those which are automated in nature.

Some positive feedback was received. Two gambling operators stated that the proposal was reflective of current practice and others used language such as logical and appropriate, sensible and very clear and welcomed, to indicate their support. A member of the public considered that this approach was very sound.

With regard to the ‘strong’ and ‘stronger’ categorisation of actions in the visualisation, some respondents were of the view that in its current format, this could cause confusion. There was support for renaming the ‘stronger’ category as ‘medium-strong’ to aid understanding.

There were calls for more detailed guidance on strong and stronger indicators of harm and their application; though also calls for less guidance and more flexibility.

Recommendations included the consideration of signposting to support at every scale of action.

Concern was noted around the potential for the categories to be interpreted as a rigid requirement which could curtail flexible gambling operator practices in this space, to cater for their particular customer base. This could also mean that where harm is identified, it may not be acted upon as swiftly as it should.

Bonus offers

Responses were broadly positive about the requirement that customers displaying strong indicators of harm must not receive marketing or take up new bonus offers and were also generally positive about the associated guidance (but with some exceptions and requests for additional detail as set out further in the following paragraphs).

Some members of the public raised concerns here about the risks of harms associated with bonus offers. These included that they target the vulnerable, are particularly appealing to people when desperate and encourage people back into gambling when they have tried to stop. They suggested that bonus offers be banned or restricted more generally - that is not just where there are strong indicators of harm.

Some gambling operators raised concerns about possible unintended consequences of this part of the requirements and/or guidance: including that a ban on bonus offers could drive customers to spend more of their own funds on gambling, disincentivise them to use gambling-management tools or move to gambling with an unlicensed operator.

Some gambling operators asked whether this part of the guidance is in line with the licensing objective to ‘ensure that gambling is conducted in a fair and open way’, as they considered it to be potentially unfair to customers. One example of this was whether we had considered the consistency with Consumer Protection Regulation of providing advice to gambling operators about an offer that was partially completed when the customer was identified as displaying strong indicators of harm.

Some respondents flagged that they considered it difficult to implement requirement 10 relating to bonus offers without guidance in place. Gambling operator respondents requested further information in the following areas:

Some gambling operators raised concerns about the technical challenges they may face in implementing the requirement in relation to a block on some promotions, and the impact on time and on cost, with one respondent saying it could be particularly difficult if this function is managed by a third party.

Partway through bonuses

Some respondents flagged that they considered it unnecessary to provide guidance about partway through bonuses as these were beyond the scope of the requirements, which relate to new bonus offers.

Non-monetary processing

Some respondents flagged that they considered it unnecessary to provide guidance about non-monetary bonuses as the requirement does not apply to non-monetary bonuses. The responses also flagged that if the guidance is to refer to non-monetary bonuses, a definition would be helpful.

Automated processing

A number of respondents questioned the proposed guidance for this requirement - they were of the view that the draft guidance went beyond what was required by data protection law. They also pointed to the potentially onerous resourcing and financial implications of manual processing. A point was made that if a manual review was applied in every case, the processes would no longer be fully automated and would effectively disentitle respondents from challenging the decision at law.

Positive feedback was received for the alternative approach proposed in the consultation (that is to include content in the guidance making clear the circumstances in which the Commission considers a manual review necessary) which was considered to be compatible with data protection requirements, sensible and desirable for gambling operators and customers.

Finally, some suggestions for good practice were received such as always engaging with customers when taking action to restrict their gambling and that manual reviews should form part of player protection models, even when customers are not contesting automated decisions.

Our position

Increasing scale of actions

In order to have a clear increasing scale of indicators of harm, we have reclassified the category previously labelled as 'stronger' as 'medium-strong'.

In addition, we amended the wording on marketing within the medium category to say limiting marketing rather than preventing marketing as this format more neatly illustrates the increasing scale.

We have also removed content about generic safer gambling messaging from the visualisation of the increasing scale of customer interactions, as we considered that it would be clearer to describe this type of safer gambling activity separately from customer interaction.

Bonus offers

In response to comments received during the consultation period, we have added more information to explain the Gambling Commission's approach to considerations of what constitutes a bonus offer and whether there has been a new bonus offer to assist gambling operators to understand the approach.

We note the comments from respondents who had concerns about bonus offers more generally and in particular that they considered that they targeted vulnerable customers and should be restricted further than requirement 10 already does.

Further restrictions on bonus offers were beyond the scope of this consultation although we flag that the Commission has committed to consult further on the topic of socially responsible inducements as part of our work to implement commitments we made as part of the government's Review of the Gambling Act 2005, and that interested parties may wish to respond to that future consultation on these matters.

We note the comments made by gambling operators about the potential unintended consequences of restricting bonus offers and also the position that some respondents took that requirement 10 itself may be unfair to customers. These matters are beyond the scope of this consultation which considered the guidance associated with Social Responsibility (SR) Code Provision 3.4.3 rather than the code itself. However, we consider that it is appropriate to take steps to prevent targeting customers with bonus offers where they are showing strong indicators of harm, and we note that many respondents to the consultation (including some gambling operators) also considered on balance that preventing targeted bonus offers was a necessary step to respond to serious indicators of harm.

We noted that some industry respondents considered it difficult to implement requirement 10 without guidance in place. We therefore answered any queries we received from gambling operators outside of the consultation exercise about this requirement to help gambling operators to be compliant.

Partway through bonuses

We have kept guidance content about bonus offers that are partway through but have added further wording to reinforce that the requirements themselves relate only to new bonus offers. There are no requirements in Social Responsibility (SR) Code Provision 3.4.3 relating to bonus offers which a customer is partway through.

It is nevertheless appropriate to include guidance related to bonus offers which are partway through to enable gambling operators to consider what is good practice in these circumstances. The guidance aims to encourage a transparent and fair outcome for customers that are identified as displaying a strong indicator of harm when they are partially through a bonus offer, and we consider it to be consistent with consumer protection law. A gambling operator is therefore required to take into account the guidance on this topic of bonuses which are partway through. References to other relevant Licence Conditions and Codes of Practice (LCCP) requirements are included to remind gambling operators of these requirements.

Non-monetary bonuses

We have taken a similar approach in relation to non-monetary bonuses where we have made amendments to the guidance to reinforce even further that there is no requirement in Social Responsibility (SR) Code Provision 3.4.3 for gambling operators to prevent non-monetary bonuses. However, we consider it appropriate to provide good practice guidance to help support gambling operators in their consideration, and we have cross-referred to other relevant LCCP requirements in relation to non-monetary bonuses to assist gambling operators in understanding what are non-monetary bonuses.

Automated processing

Whilst compliance with the United Kingdom (UK) General Data Protection Regulation (GDPR) is a matter for each gambling operator and ultimately the Information Commissioner’s Office (ICO) and/or the courts, the guidance in relation to requirement 11 is intended to support gambling operator's compliance with the provisions relating to automated processing laid down by Article 22 of the UK GDPR and act consistently with good practice.

We have decided to implement the possible alternative approach to guidance which we explored in the consultation. This is to explain in the guidance that requirement 11 requires a gambling operator to contact the customer and inform them of an automated decision which has legal effects or similarly significantly affects the customer (such as by disrupting customer choice), and their right to contest a fully automated decision. If a customer contests the automated decision, the gambling operator will then be required to conduct a substantive review of the automated decision; but a substantive review of the decision is not required by requirement 11 if the decision is not contested by the customer.

Topic 6: Section D of the guidance – Evaluate

Proposals

In Section D of the proposed guidance, we grouped guidance associated with requirements 12 to 14 which relate to evaluating the impact of the effectiveness of customer interaction.

The key issue associated with Section D of the proposed guidance is guidance associated with ensuring interactions are, at a minimum, in line with problem gambling rates. The requirement is intended as a backstop protection to ensure a certain level of interaction is taking place, but the guidance did not specify what type of customer interaction should be counted towards this.

Consultation questions

  • Problem gambling rates: Do you have any comments on the guidance for operators who offer more than one gambling activity to show how they should calculate one overall problem gambling rate in proportion to the activities they offer?
  • Other comments Section D: Do you have any other comments about Section D of the proposed guidance document, relating to evaluation?

Respondents’ views

Some respondents felt that the proposals for guidance relating to evaluation had positive attributes, and these were predominantly:

In relation to assessing customer interaction levels in line with problem gambling rates for the relevant product and in proportion to Gross Gambling Yield (GGY)1, respondents made a number of comments as set out in the following paragraphs.

Industry respondents said that using quotas may deplete the quality of interaction or encourage gambling operators to only hit those quotas and could shift them to looking at a narrow indicator for harm, rather than taking a holistic approach.

Customers who play across lots of products may not be correctly assigned to a category and there is a risk that creating one problem gambling rate across products may mask the risk in those products where problem gambling rates are higher.

The 12 month targets for interaction do not reflect seasonal fluctuations in gambling behaviour across the year.

Industry respondents expressed concerns with the evidence being used due to three main issues; timeliness, relevance (as they said problem gambling rates are reducing and there was a mismatch between Health Survey and quarterly telephone survey results) and robustness of the data (due to the inability to prove causation). These respondents also suggested the following changes:

Other respondents commented that there is a risk that gambling operators will be double counting interactions with individual customers, preventing sensible read-across to problem gambling rates, and that gambling operators may count very light-touch interactions in the figures. Overall, these respondents felt that the proposed guidance did not specify enough detail to ensure consistency and meaningful evaluation.

Our position

The Gambling Commission welcomes the commitment from industry respondents to continue to build evaluation processes for customer interaction to measure impact on the outcomes we seek.

In relation to the backstop protection of ensuring that the number of interactions are at a minimum in line with problem gambling rates, the responses often commented on the requirements of Social Responsibility (SR) Code Provision 3.4.3 rather than the guidance content. We have made no changes to the guidance at this time as we consider that the guidance content explained the requirements and how a gambling operator should be compliant in an effective manner. For example, we consider it helpful to explain the timeframe over which gambling operators should consider whether they have met the minimum proportion of interactions as annual.

As the proposed guidance stated, interactions - if designed to identify risk of harm - should be capable of identifying a broader range of people at an earlier stage to reduce risk of harm.

In relation to concerns about requirement 14 decreasing the quality of customer interactions in order for gambling operators to hit specified levels, we would like to stress that this requirement sits as part of all the new requirements in Social Responsibility (SR) Code Provision 3.4.3 which should be considered together. The aim of these requirements is ultimately to improve the quality and effectiveness of customer interactions whilst also ensuring a proportional amount of the customer base is being interacted with.

Customer interactions are actions taken by a gambling operator in response to indicators of harm in connection with a customer - the types of actions are set out at requirement 9. The requirement in relation to problem gambling rates specifies that: 'For the avoidance of doubt, this provision is not intended to mandate the outcome of... customer interactions'. Therefore, we have simply added a cross-reference to requirement 9 in this part of the guidance in order to assist gambling operators.

In relation to research, the Health Survey 2018 is currently the most relevant source of figures of problem gambling rates by activity. The Commission's quarterly telephone survey - when it was live - did not include rates by activity. The intention of the requirement and guidance is to seek to drive consistency in this between gambling operators.

The Commission will consider the timing and how to embed new participation and prevalence methodologies into the information we provide associated with this requirement following the new methodology being rolled out as official statistics.

Notes

1 The amount retained by gambling operators after the payment of winnings prior to operating cost deductions.

Topic 7: Further consultation questions

Proposals

The consultation document explored and asked open questions about the following three additional cross-cutting themes:

Consultation questions

  • Research: Are you aware of any recent developments in research which may suggest additional or different content for the guidance document?
  • Consumer experience: Do you have any experience of actions which have been taken by operators which may inform good practice in implementing the requirements?
  • Financial impact: Do you have any information or views about whether the proposed guidance would be likely to result in increased costs, above and beyond those costs that would be incurred in any event as a result of Social Responsibility (SR) Code Provision 3.4.3?
  • Equalities impact: Do you have any comments or evidence in relation to any potential equalities impacts of the proposed guidance? In particular, do you have any concerns that the guidance could have a negative or disproportionate impact on persons with protected characteristics?
  • Other matters: Do you have any other comments about any part of the proposed guidance document or any content which should be included in the guidance document?

Respondents’ views

In relation to research, we were pleased respondents shared a number of research studies with us in response to this question, which flagged that there was awareness of key components of the current key evidence base for these respondents.

There were a number of comments about potential costs - both stating that the costs would be negligible for responsible businesses, and also at the other end of the scale, that the increased staff costs of more granular customer interaction approaches which might be associated with the requirements may be significant and disproportionate. Some smaller gambling operators commented they considered the financial impacts would be more significant for them.

Some respondents suggested that the Gambling Commission should confirm that its guidance has been checked for compliance with the Equality Act as well as data protection laws. Some respondents suggested that a fuller detailed economic analysis would be appropriate.

One respondent stated that the industry accepts that implementing these systems will create a safer gambling environment and reduce problematic play.

Our position

The key evidence base for the Gambling Commission to inform the preparation of our guidance was the lessons learned from our casework. Information about our casework leading to regulatory sanctions can be reviewed on our Regulatory actions public register. We have also updated the guidance to link to additional information on the Commission's website where further evidence is available and also to work to build our evidence base which is currently is taking place.

The Commission continues to consider that the introduction of guidance which gambling operators are required to take into account is overall positive for gambling operators in understanding the Commission's approach. There is a cost to reviewing the Commission's guidance and taking it into account. However, the Commission considers that using the guidance to inform work taken in compliance and so on also reduces the costs of compliance as it helps give a clear picture of the Commission's approach when utilising the guidance. We consider this to be particularly relevant for smaller gambling operators

The Commission has considered equalities issues arising in the course of this consultation and specific considerations are contained in this document.

The responses to the consultation did not flag any issues relating to equalities impacts of the guidance which led us to consider changes to the guidance. However, we have added text to the content relating to customers in a vulnerable situation to reinforce and emphasise that not all factors automatically mean that a customer is vulnerable to gambling harm. It is important that any action in relation to vulnerability will include consideration of the entire picture for that customer and be tailored and proportionate to the risk.

The Commission has also considered issues associated with data protection implications of the proposed guidance and specific considerations are contained in this document.