22Oct

Betting and Gaming Council Announces Game Design Code of Conduct

22nd October 2020 Jessica Wilson 339

On 25 September 2020, the Betting and Gaming Council (“BGC”) announced the new Game Design Code of Conduct (the “Code”). The Code is a product of the industry’s Safer Products Working Group which was formed in January 2020 and tasked with pursuing the opportunity to reduce gambling harm through game and product design.

Compliance with the Code is to be undertaken by BGC members, including where operators use non-BGC game suppliers.

The Code applies to online slot products and is intended to be a “living document, evolving as the research base and understanding around game design continues to develop”. The Code sets out 14 principles to show a commitment to “transparency, player education, innovation and research with the overarching aim of enhancing player safety” which can be categorised into the following areas:

Game Characteristics:	Working with academics, regulators, consumers, individuals with lived experience of gambling related harm and other technical experts to identify and agree on features that are correlated to greater player risk.
Informed Player Choice:	Empowering customers to play more safely through the provision of clearer information on product and game rules, including mathematical properties such as risk, the chances of winning and optimal strategies.
Enhancing Control Innovation:	Improvements in safer gambling tools that help players both monitor and control their gambling, including spend, loss, win and time-based measures.
Governance and Continuous Improvements:	Process for reviewing and updating any Code of Conduct, in addition to transparency, disclosure and independent evaluation.

The Code is divided into two phases:

Phase 1

This phase introduces four standards of game design. The requirements are in line with the Gambling Commission’s recent consultation on online slots game design which aims to make these standards applicable to the whole industry. The Code of Conduct requires BGC members to have the measures in place by 30 September 2020, making BGC members “amongst the first to commit to these standards”.

The four standards are as follows:

1. Minimum game cycle speed of 2.5 seconds

A game cycle starts when a player has paid for an initial wager and depresses the ‘start’ or ‘spin’ button or takes equivalent action to initiate the game and ends when all money or money’s worth staked or won during the game has been either lost or delivered to, or made available for collection by the player and the start button or equivalent becomes available to initiate the next game. Where auto play or auto start is permitted then a game cycle is measured from the point at which the game is initiated by the system (equivalent to the player depressing the start button) to the point at which it is able to automatically start the next game.

2. Removal of turbo play

Turbo play or equivalent features will be not be allowed. Such features enable the player to speed-up the base game cycle speed of the game.

3. Removal of base game slam stops

Slam stops or equivalent features will not be allowed within the base game. This is the ability for the customer to interact with the base game to end it before it has naturally concluded e.g., by hitting or pressing a button whether online or on a physical machine. This includes promotional free wagers paid for by the operator.

4. Removal of multi-slot play within a single gaming client

Functionality that allow players to place multiple, separate stakes on multiple slots games within a single gaming client will not be allowed.

Phase 2

Phase 2 requires BGC members to implement additional measures for new games by 31 January 2021 to “enhance transparency and add friction for players”.

1. Wins below the stake size

Total wins below the stake will be informative and will be differentiated from wins that are equal to or greater than the stake. Specifically:

The win amount will be displayed
- The win line is displayed long enough for player to understand the impact of the bet (in line with existing RTS 7E)
- A brief sound can be used to make the player aware of the result (the return of funds to wallet)

In contrast, total wins equal to or greater than the stake may be celebratory and allow the following elements:

The win amount can be displayed in a differentiating manner e.g., the win display could be in a text size that is greater and could utilise dynamic win animations, for example coin showers
- The win line can be displayed with additional animation permitted
- Celebratory sound effects can be used.

2. Bonus game notifications

Bonus games outside the base game will not be automatically triggered without a customer intervention, e.g., clicking a button to acknowledge that a bonus game has been won and can now be entered. In addition, after the end of a bonus game, the player will receive a notification informing them the bonus game has finished before re-entering the base game. If Auto-play is used during the bonus game, it will automatically stop before re-entering the base game. In the exceptional case that a bonus game is not triggered before the platform would normally time out, the operator has the right to clear down the game with any winnings being added to the player’s balance.

The implementation timeframe of the following two measures will be agreed in the coming months:

1. Access to safer gambling information

While a player is playing a game, the display will include a link to safer gambling information that will be available to view within a prominent place on the gaming client. This will display a safer gambling icon and messaging and contain links to the customer account pages of the operator, with quick links to all limit setting functionality (e.g., deposit, loss, time, timeouts, and self-exclusion).

2. Mandatory player interaction

A mandatory player interaction will be initiated every 60 minutes or at the conclusion of the subsequent game cycle. This will require the customer to acknowledge the message.

The BGC has stated that it may recommend to the Gambling Commission that the Phase 2 measures are adopted as part of the Gambling Commission Remote Technical Standards.

Innovation and Testing Lab

The BGC have created a work programme for the BGC Innovation and Testing Lab to use an evidence-based approach to development of the Code and to inform future changes. The BGC intends to be “transparent in the reporting of findings, methodology and data”.

The Innovation and Testing lab will be focussing on the following projects:

Game labelling – work on creating a consistent safer gambling icon and a common game labelling scheme for key features such as volatility and persistence
Increased staking – work to assess the prevalence of increased staking in slots sessions, whether this behaviours correlates to a risk of harm and how safer gambling messaging can be incorporated to enhance player safety
Auto-play – work on the relationship between auto-play and staking behaviour and whether any risk mitigation is required
Display of net position and elapsed time – work on providing players with quick access to information on their net spend and time elapsed

BGC’s Game Design Code of Conduct has introduced significant changes to the design and functionality of online slots games. The industry should expect to see more changes due to ongoing work in the industry and the awaited Gambling Commission response to its consultation on online slots which closed on 3 September 2020. See our blog on 10 July 2020 for further details. BGC members, and those supplying BGC members, are reminded of the Phase 1 measures were implemented on 30 September 2020.

14Oct

Gambling Industry Code for Socially Responsible Advertising, Sixth Edition

14th October 2020 Ting Fung 330

“From ancient times in China, Egypt and Rome, it has been present as a pastime, affording enjoyment for many, corrupting some and harming not a few…”

Of gods and mortals

In his introduction in the Chambers and Partners Gaming Law Global Practice Guide, Julian Harris writes of Palamedes, the god to which the Greeks ascribed the invention of dice, as well as weights and measures. With the publication of the sixth edition of the Gambling Industry Code for Socially Responsible Advertising (the “Industry Code”), now under the custody of the Betting and Gaming Council (“BGC”), it is this dichotomy of play and balance that is held in mind.

As technology and its consumption changes and continues to advance, consumers across industries are more exposed to advertising than ever, maximising fun but also magnifying potential harm. With the scope of online advertising presenting the greatest influence, and arguably the most risk, it is unsurprising that one of the key areas of update in the Industry Code relates to social media, in respect of marketing and its use to promote consumer awareness.

What licensees need to know

From 1 October 2020, Gambling Commission-licensed operators are required to enforce the following:

Sponsored/paid-for social media advertisements must be targeted at consumers aged 25+. This requirement relates solely to prospecting campaigns where the targeted audience is not already verified through an operator’s own age verification processes;
Given improvements in identification technology if a social media platform can verifiably prove that its age gating systems can prevent under 18s from accessing the gambling advertising content, a possibility exists that the above age filter may be reduced to 18+;
Organic YouTube content produced by an operator as well an operator’s own YouTube channels must be age-restricted to 18+ to ensure users log in to age-verified accounts in order to view content;
Operators should undertake reasonable endeavours to exclude from their paid-for social media campaigns (a) customers with an active self-exclusion or cool-off period and (b) those assessed by an operator as ‘higher risk’;
Operators must use their own social media pages to post frequent safer gambling related information; and
Operators must provide information (in an easily accessible and sufficiently prominent manner) on how customers can limit their exposure to gambling advertising across social media platforms.

In other areas, further changes to the Industry Code include:

Search activity

Search advertisements must clearly contain 18+ messaging in the advertisement copy, along with safer gambling messaging within the core ad format;
The BGC will collate (and regularly update) a shared blacklist of negative keywords, against which no gambling advertising should be served. This blacklist will include keywords that (a) indicate vulnerability and (b) relate to children. Operators must, “in a timely fashion”, incorporate the keyword blacklist into all relevant campaigns where applicable;
These requirements will also apply to any affiliate marketing carried out on behalf of an operator.

Affiliate compliance

All affiliates must be subject to due diligence and PEPS/sanctions checks. KYC checks should also be conducted, wherever relevant.
Affiliates must comply with all relevant regulatory and legislative requirements including CAP’s guidance on ensuring advertisements are obviously identifiable as such. In order to promote consistency, all relevant affiliate ads should be clearly and prominently marked ‘#ad’;
Relevant affiliates must share safer gambling related content on a regular basis with each individual operator with whom that affiliate has an agreement;
It is expected that (a) compliance with the above requirements will be managed by way of contractual obligations imposed by operators and (b) operators will terminate relationships with affiliates that cannot or do not comply, the Industry Code adding that this will be “preferably on a one strike and you’re out rule” basis.

As many will already be aware, ordinary code provision 5.1.8 of the Licence Conditions and Codes of Practice states: “icensees should follow any relevant industry code on advertising, notably the Gambling Industry Code for Socially Responsible Advertising”.

The Industry Code states that it aims for the above changes to “better protect children and vulnerable consumers online”, with BGC Chief Executive, Michael Dugher, further adding:

“We have made excellent progress in recent times and the Industry Code for Socially Responsible Advertising is updated as technology evolves. The latest edition is further evidence of our determination to continue to ensure that standards are rising and are as high as they can possibly be”.

The measures are certainly timely in light of the Advertising Standards Authority’s findings published in August 2020, which revealed that four operators had breached age-restricted advertising rules.

Whistle-blowing at its finest

By contrast, in other avenues of advertising, the ‘whistle-to-whistle’ ban (introduced under John Hagan’s leadership as former Chair of IGRG) has proven markedly effective, with the BGC noting that betting advertisements seen by children has since fallen by 97% and that the amount of gambling advertisements viewed by children has fallen by 70% over the full duration of live sport programmes.

09Oct

Gamcare releases first of its kind financial harms toolkit

9th October 2020 Lucy Paterson 314

This week, Gamcare released its Gambling Related Harm: Core Messages and Financial Harm Toolkit, which is aimed at organisations helping customers affected by gambling harm, including gambling operators, financial institutions and debt advice agencies. The toolkit sets out Gamcare’s core messages and draws together information on the various tools customers can be signposted to for assistance controlling their gambling, including safety tips that can be provided to customers who do not wish to stop gambling completely.

The toolkit, which is the result of a cross-sector collaboration initiative by Gamcare and the first of its kind in the UK, is intended to be a comprehensive guide for organisations across the UK to help them recognise, support and refer customers experiencing gambling-related financial harms and provide consistent communications across all points of the customer journey.

The materials draw together best practice and are informed by the experiences both of those who have been harmed by gambling and experts from each sector, in order to tangibly improve customer interactions in future. The toolkit contains referral pathway guidelines tailored to each sector and guidance on training staff to provide them with the confidence to support customers who are impacted by gambling harms.

Gambling related financial harm is an important area of focus for Gamcare, which reports that 70% of callers to the National Gambling Helpline mention some level of gambling debt and/or financial hardship. Gamcare’s progress in this area has now seen eight banks offer customers the option to place blocks and ‘cooling off’ periods on gambling transactions to assist in controlling their gambling.

Gamcare hopes that the toolkit will help frontline staff in key industries provide effective, sensitive support to customers in order to ensure they receive the help they need.

Anna Hemmings, CEO at GamCare, said:

“People struggling with gambling present in different ways and often opportunities are missed to provide the support they need. Ensuring that frontline staff are equipped to help and refer to appropriate support is a huge step in improving the outcomes these customers experience. This toolkit, with the support of businesses, charities and gambling operators themselves, is vital to putting those pathways in place.”

20Jul

Gambling Commission Consultation on High Value Customers

20th July 2020 Julian Harris 323

Introduction

Following a breakfast briefing conducted by Neil McArthur in October 2019, the Gambling Commission announced the formation of three industry working groups, one of which was to focus on high value customer incentives.

The proposals from the working groups, co-ordinated by the Betting and Gaming Council (BGC), was published on 1 April 2020 with operators agreeing to implement the changes rapidly, some by as soon as 14 April. At the time of publication of the proposals the Gambling Commission stated that it “would launch formal consultations to ensure that the new measures are incorporated into its regulatory framework.” The Gambling Commission further stated that it “expects the industry to implement its code as soon as possible and considers most measures should be implemented within 3 months” and that it “will monitor and support implementation of the industry’s code as an interim measure.”

The proposals made were to:

Restrict and prevent customers under 25 years of age from being recruited to high value customer schemes.
All customers must first pass through checks relating to spend, safe gambling and enhanced due diligence before becoming eligible for high value customer incentives.
Reward programmes will also be required to have full audit trails detailing decision making with specified senior oversight and accountability.

The consultation was published on 26 June 2020 and closes on 14 August 2020.

New Licence Condition

The Gambling Commission proposes to introduce a new licence condition on rewards and bonuses. This will apply to all licences, except gaming machine technical and gambling software licences and will require that:-

any incentive or reward scheme must be designed to ensure that the circumstances and conditions are clearly set out and readily accessible to customers to whom it is offered;
neither the receipt nor the value is dependent on gambling for a pre-determined length of time or frequency, or alters or increases if the activity or spend is reached within a shorter time;
if the benefit comprises free or subsidised travel or accommodation the terms are not directly related to the level of gambling
if incentives or reward schemes are offered to customers designated “high value”, “VIP”, or equivalent, they must be offered in a manner consistent with the licensing objectives.

Most importantly, licensees are required – by use of the word “must” – take into account the Gambling Commission’s guidance on high value customer initiatives.

New Guidance

In its guidance, the Gambling Commission goes further than the three points that are outlined above. For example, in addition to those, it requires:-

Specific policies and procedures for the operation and governance of HVC schemes, to include authority levels for key decision making, and appropriate oversight arrangements.
A named individual, at senior executive level or equivalent, accountable for the programme’s compliance. Except for small scale operators this should be a PML holder.
Licensees should consider what additional steps are required to ensure staff are equipped and motivated to manage HVCs effectively, including enhanced training on safer gambling and AML risks specific to HVC management; job descriptions reflecting that protection of the licensing objectives are the basis for all activity carried out by staff involved with HVC rewards programmes; staff should not be incentivised or remunerated based on a customer’s loss, spend, or activity; the performance management of HVC staff should be consistent with the principle that commercial pressures should never override regulatory considerations or customer welfare; and ensuring staff managing multiple accounts retain their ability to assess risk on an individual basis.
HVC incentives should not be used to exploit vulnerable customers or to encourage problematic behaviour. Licensees must be able to evidence how their rewards and bonuses are compliant with the provisions in section 5.1 of the codes of practice.
Licensees will be expected to take all reasonable steps to verify the information provided to them and conduct ongoing checks, with frequency of checks to be determined by the assessment of risk from ongoing monitoring of the customer’s activity, behaviour and circumstances. In the absence of any change in the risk assessment, licensees should as a minimum undertake a review of a HVC’s account at least quarterly.

It is important to note the Gambling Commission’s statement at paragraph 1.5 of the proposed guidance: “We have used the word ‘must’ to denote a legal obligation, while the word ‘should’ is a recommendation of good practice, and is the standard that we expect licensees to adopt and evidence. We expect licensees to be able to explain the reasons for any departures from that standard.”

The Gambling Commission has consulted on these proposals, as it is required to do under section 24(10) of the Gambling Act 2005, before issuing or amending a code of practice. However, the addition of lengthy and detailed guidance bears resemblance to the approach the Gambling Commission has taken to customer interaction. The VIP guidance makes it explicitly clear from the wording above that, despite using the word “should”, it expects licensees to adopt the standards set out and maintain evidence of doing so. This is essentially a requirement. The manner by which the guidance has been issued, arguably opens the door to the Commission taking similar steps to that which it took in relation to customer interaction, this time in relation to the requirements for VIP customers. Essentially the Gambling Commission will be able to amend this guidance, perhaps substantially, and to add onerous additional requirements, without consultation. Whether they will do so remains to be seen, but we highlight the point as a warning to operators to be watchful. The guidance is detailed, and as we know, the devil lurks in the detail.

We recommend to operators that they reply to the consultation, seek clarity as to paragraph 1.5, and make it clear that they expect the Gambling Commission to consult prior to amending its guidance further.

With thanks to my colleague David Whyte for his invaluable co-authorship.

10Jul

Gambling Commission Consultation on Online Slots Game Design and Reverse Withdrawals

10th July 2020 Bahar Alaeddini 378

On 9 July 2020, the Gambling Commission announced a consultation on online slots game design and reverse withdrawals. The former follows the work of the Safer Product Working Group, which we wrote about in our blog on 2 April 2020, and the draft Betting and Gaming Council industry code, which is due to be published in September 2020.

In April 2020, the industry and Safer Product Working Group agreed to:

A minimum spin speed of 2.5 seconds on all slots.
Removal of game features which may encourage intensive play such as slam stops and turbo buttons.
Removal of split-screen slots which have been associated with potential loss of control.
A more detailed work plan which will include in-game messaging and the creation of a Betting and Gaming Council Testing Lab to investigate other game features.
Publication of the final industry code in September 2020.

Reason for the consultation

In its introduction to the consultation, the Gambling Commission explains:

“Our interest in online slots is because it is the largest online gambling product by Gross Gambling Yield (GGY) – played by relatively few but with a high average spend. Structurally it has a number of features which can combine to significantly increase intensity of play. This means it poses a relatively high risk, reflected in its associated problem and moderate-risk gambling rates.”

Slots are the largest online gambling product in Great Britain by GGY. 1.2% of adults participate in online slots and GGY from online slots has grown by approximately 50% since November 2014. The Gambling Commission believes “this implies a sharp increase in average spend per consumer”.

In a section titled Why are we consulting the Gambling Commission explains the industry proposals are insufficient and the “consultation goes further to keep slots players safe in a number of other additional areas”. It goes on to add that “the strength in the proposals will come from effective compliance by operators… the industry can expect what has described as “relentless escalation” to continue when see consumers not being protected from harm.”

The Gambling Commission is particularly concerned about the accelerating intensity of slot games which aim to increase the time and spend of players. The stated aim of the consultation is to make play of online slots safer by adopting an industry-wide and consistent approach, not just an industry code for Betting and Gaming Council members, and going further by implementing additional measures above the draft industry code.

It acknowledges these are not the only ways to improve player protection and invites views on other aspects of game design to consider for future changes. It refers to its interim Experts by Experience Group, which has suggested stake levels and different product labels to help customers understand potential risk better. The Gambling Commission’s Digital Advisory Panel highlighted the need for friction to reduce the likelihood of players placing impulsive bets.

New controls aimed at reducing potential harm of online slots

The consultation proposes to amend the Remote gambling and software technical standards (RTS) as follows:

Insert a high-level definition of slots: “casino games of a reel-based type (includes games that have non-traditional reels)”.
Add a new requirement RTS 14C: “The gambling system must prevent multiple slots games from being played by a single account at the same time.”
Add a new requirement RTS 14D: “It must be a minimum of 2.5 seconds from the time a game is started until a player can commence the next game cycle. It must always be necessary to release and then depress the ‘start button’ or take equivalent action to commence a game cycle.”
Add a new requirement RTS 14E: “The gambling system must not permit a customer to reduce the time until the result is presented.”
Add a new requirement RTS 8C: “The gambling system must require a customer to commit to each game cycle individually. Providing autoplay for slots is not permitted.”
Add a new requirement RTS 14F: “The gambling system must not celebrate a return which is less than or equal to the total amount staked.”
Add a new requirement RTS 2E: “All gaming sessions must clearly display the net position, in the currency of their account or product (e.g. pounds sterling, dollar, Euro) since the session started.”

Testing

Licensees must satisfy themselves that they are offering compliant games. Where they are not sure, any existing game will require third party retesting.

All new games published after the implementation date for these new requirements will need to be tested otherwise, they will need to be removed until retesting has been completed.

Although slots are casino games (and therefore not separately licensed), the Gambling Commission plans to stipulate testing reports to declare whether the game is identified as slots.

Reverse withdrawals

On 14 May 2020 we wrote about the Gambling Commission’s new “additional formal guidance” for online operators in response to “evidence that shows some gamblers may be at greater risk of harm during lockdown”. This included a prohibition on offering reverse withdrawals until further notice.

At the time, we questioned the reliability of the data used by the Gambling Commission because it showed a decrease in reverse withdrawals. It was clear to us that this measure was not based on the data published by the Gambling Commission, and we questioned whether it was necessary and proportionate. The Gambling Commission, supported by research, already considered reverse withdrawals to be a flag for potential gambling harms; however, action to tackle this through an industry consultation would have been more appropriate than a strict measure introduced under the guise of guidance. The Gambling Commission has now issued the consultation to make the change permanent, but without the evidence to support it.

This consultation will make it a permanent prohibition by adding a new requirement RTS 14B: “Consumers must not be given the option to cancel their withdrawal request.” Operators will be required to make this withdrawal process as “frictionless as possible”.

Respond to the consultation

The consultation closes on 3 September 2020.

09Jul

Gambling Commission Creates Interim Experts by Experience Group

9th July 2020 Bahar Alaeddini 333

On 19 June 2020, the Gambling Commission announced the creation of an interim Experts by Experience Group. The interim group “will provide advice, evidence and recommendations to the Commission to help inform decision making and raise standards, along with co-creating a permanent Experts by Experience Advisory Group to advise the regulator on a more established basis.”

An unidentified spokesperson for the interim group said:

“ comprises a group of people who have suffered a wide range of gambling harms, including recovering gambling addicts, family and partners of addicts, and those who have lost children to gambling suicides…the establishment of the group is long overdue. We are determined…to play a continuing and much more active role in the deliberations and decision making across the whole remit of the Commission as part of the National Strategy to reduce gambling harms. We bring a new and vital perspective on key issues of regulation and even how the Commission itself works.”

The interim group will be in place for at least six months, at which point the Gambling Commission plans to move to a permanent Experts by Experience Advisory Group, similar to the Advisory Board for Safer Gambling and the Digital Advisory Panel.

No terms of reference are published for the interim Experts by Experience Group and its members are not known. Names may be sensitive or confidential; however, at a minimum, the number of members, members’ backgrounds, the reason for their appointment and a register of interests should be published. Otherwise, the interim group runs the risk of being labelled a quasi-lobby group, financed and supported by the Gambling Commission.

Although it is only an interim group, plainly, it has a strong level of influence over the Gambling Commission’s work. It should, therefore, be treated no differently from the Advisory Board for Safer Gambling and the Digital Advisory Panel.

The objective bystander might wonder why the interim group’s members only comprise those who have experienced gambling harms when there are 400,000 people classified as problem gamblers and 32 million gamblers in Great Britain.

Unfortunately, the Gambling Commission’s lack of transparency detracts from the real and genuine value of the Experts by Experience Group and devalues contributions made by its members. To build a sustainable gambling industry, we could all learn and develop significantly from the work of the interim group and the experiences of its members. This requires us to work in partnership and adopt a balanced approach.

It seems the Gambling Commission has failed, again, to be transparent, balanced and independent.

14May

New Gambling Commission Guidance for Online Operators

14th May 2020 Jessica Wilson 357

On 12 May 2020, the Gambling Commission issued new “additional formal guidance” for online operators in response to “evidence that shows some gamblers may be at greater risk of harm during lockdown”.

Online operators must now take this new guidance into account and they are “expected to make changes to act on this guidance as soon as possible”.

The new guidance is issued under social responsibility code provision 3.4.1 of the LCCP which requires licensees to interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This includes identifying customers, interacting with customers, understanding the impact of the interaction, and taking into account the Gambling Commission’s guidance on customer interaction, which now includes the new guidance of 12 May 2020.

The new measures, to be “implemented into customer interaction frameworks” by licensees, are as follows:

Reviews of all thresholds and triggers used to track vulnerability to ensure that they reflect changed financial circumstances that many consumers will be experiencing. An emphasis should be placed on those thresholds and triggers being proactively reset on a precautionary basis to ensure customers with emerging vulnerability, such as increased time spent at play or increased spend can be identified
Specifically, reviewing time indicators to capture play in excess of one hour as the Gambling Commission believes this is a proxy for potential harm.
Set additional or modify existing thresholds and triggers which are specific to new customers reflecting the operator’s lack of knowledge of that individual’s play and spend patterns.
Implement processes that ensure the continual monitoring of the operator’s customer base, identifying customers whose patterns of play, spend or behaviours have changed in the last few weeks.
Conduct affordability assessments for customers identified by existing or new thresholds and triggers which indicate customers experiencing harm. Consider limiting or blocking further play until the checks have been concluded and supporting evidence obtained.
Prevent reverse withdrawal options for customers until further notice.
Stop bonus offers or promotions to customers displaying indicators of harm.

Guidance or requirement

Whilst guidance may be appropriate to ensure vulnerable customers are protected, particularly during the current Covid-19 pandemic, it is questionable whether the measures can be considered to be “guidance” and whether they are wholly proportionate and necessary in the light of the data on which the Gambling Commission has based these measures. The wording of the measures appears to create an obligation on the part of licensees to “stop bonus offers” and “prevent reverse withdrawals” which give the impression of requirements, rather than guidance.

Data

The Gambling Commission published two sets of data. A first set collected through a YouGov survey and a second from “the biggest operators, covering approximately 80% of the online gambling market”.

YouGov data

The YouGov data was collected from just over 2,000 people, some of whom may have taken the survey multiple times. The data is based on gambling habits of customers within four weeks from “mid-March 2020”. Whilst the data does show increased spend on online gambling, for example a 2% increase on online slot games and 1.7% on sports betting, the biggest increase of 16.4% was on National Lottery products which are regulated separately and to whom the new guidance does not apply. The data analysis also fails to consider the potential adjustment of gambling habits due to the closure of land-based venues as an explanation for the increase of spend and time on certain products, as opposed to an increase in gambling habits.

Gambling Commission data

The second set of data was collected over the period 31 March 2019 to 31 March 2020. This period only covers one week in which the country was in lockdown. It follows that this data cannot be reliable evidence that customers are at a greater risk of harm during lockdown. Further, the data shows a decrease in reverse withdrawals. The new guidance at point 6 above includes the prevention of withdrawal options until further notice. It is clear that this measure was not based on the data published by the Gambling Commission, which questions whether it was necessary and proportionate to be included within this particular guidance. The Gambling Commission, supported by research, already considered reverse withdrawals to be a flag for potential gambling harms; however, action to tackle this through an industry consultation would have been more appropriate than a strict measure introduced under the guise of guidance.

Absence of consultation

The absence of an industry consultation on the guidance is particularly disappointing. When a code of practice is amended, the industry would usually be offered the opportunity to respond to a consultation on the proposed new amendments. This was the case when the Gambling Commission last issued guidance under social responsibility code 3.4.1 in July 2019. However, it seems that the Gambling Commission has decided to omit this stage due to lockdown being a present and continuing issue. The press statement notes that the Gambling Commission will bring forward plans to consult on whether further targeted protection measures are required on a permanent basis.

The Gambling Commission’s Statement of principles for licensing and regulation begins by stating that the Gambling Commission regulates in a “straight-forward, risk-based and transparent manner”. The lack of industry consultation here is plainly neither transparent, nor based on sufficient evidence of risk.

The new requirements are significant and will no doubt be burdensome for licensees to implement “as soon as possible”. However, they are likely to be welcomed by Culture Minister Nigel Huddleston (see our blog of 24 April 2020) and the Public Accounts Committee following Neil McArthur’s appearance at the session Gambling regulation: problem gambling and protecting vulnerable people on 27 April 2020.

To comply with the new measures significant updates are likely to be required to systems, customer terms and conditions and policies, each requiring input from different people, perhaps even third-parties, which will no doubt be a challenge given the current crisis. If, as the press release suggests, operators are expected to “interact with customers who have been playing for an hour in a single session of play” the impact will be significant, particularly for large operators who may have several thousand active customers at any one time. The threat of interim licence suspension, or licence review, increases this burden, which was thrown upon licensees without consultation, warning or a timeframe to implement the required changes.

As Julian Harris wrote in our previous blog, “for regulation to be effective it requires a healthy and collaborative working relationship between regulator and whom it regulates”. This statement is echoed here and whilst both the Gambling Commission and the industry as a whole are in agreement that new measures should be introduced to protect the most vulnerable during this novel and rare situation, any changes should be proportionate, necessary and founded upon strong and clear evidence.

A further blog post on the implementation of the new guidance will follow.

24Apr

Betting and Gaming Council Announces Safer Gambling Strategy

24th April 2020 Jessica Wilson 377

Last month the industry association, the Betting and Gaming Council, announced a new 10-point safer gambling action plan for its members in response to the COVID-19 pandemic. The action plan, which came into force on 27 March 2020, aims to strengthen consumer protection and build upon existing safer gambling measures implemented by its members.

Whilst overall gambling has dramatically declined due to cancellation of sporting events and the closure of betting shops and casinos, the Government’s lockdown and social-distancing guidelines mean more people are spending time in their homes. Customers may now be gambling online more frequently and, during this difficult time, could be at their most vulnerable and a greater risk of problem gambling. The Betting and Gaming Council’s action plan consists of 10 pledges which set out the standard expected of operators to increase their safer gambling measures and to protect customers during the crisis.

The 10 pledges are as follows:

Members will increase safer gambling messaging across all sites, apps and channels including inbox messaging to all existing and new customers reminding them of the safer gambling tools available.
Members will implement heightened monitoring and data collection in the knowledge that customers are required to abide by social distancing measures. Any material change in customer play patterns, including any increase in time and spend, beyond normal patterns before the crisis, indicates potential markers of harm and operators must step up interventions.
Members, operating heightened monitoring, shall actively promote deposit limits and send a deposit limit message with link to the tool to any player exhibiting abnormal patterns of play that are a marker of harm.
Members shall commit to an immediate and ongoing review of their marketing and advertising – in volume, content and targeting – and will act to ensure it is both appropriate and responsible given the increased risk.
Members will report to the BGC instances of illegal rogue and inappropriate advertising and the BGC will report these to the regulator.
These Pledges will fully apply to all affiliates. Members will enforce a strict one-strike-and-you’re-out policy for breaches of these pledges.
Members will sign-post to Gamcare advice and the 24-hour free to call National Gambling Helpline and GamStop for self-exclusion in their safer gambling messaging, particularly where issues around anxiety or isolation are apparent from monitoring systems or customer interactions.
Members restate their commitment to maintaining the vital flow of important funding for Research, Education and Treatment (“RET”).
Members shall conduct welfare checks on employees during this crisis.
Members should play a full part in supporting the Government’s ‘National Effort’ by encouraging staff to volunteer for community service, as well as offering premises where possible for use by those supporting the effort to tackle the Coronavirus.

Commenting on the pledges, Michael Dugher, chief executive of the Betting and Gaming Council, said:

“In this time of national crisis, with so many people self-isolating and social distancing at home, it is vital that we do everything possible to ensure safer gambling and to protect potentially vulnerable or at risk people.”

Building on these pledges, and in response to a letter from the Sports Minister, members have this week committed to further safer gambling measures, as detailed in a letter from Michael Dugher to the Sports Minister in which he says:

“I can give you 100 per cent assurance that despite the severe financial pressures the industry is under at present, our members in the regulated sector are fully committed to working with you and the Government to address all concerns on safeguarding customers.”

These additional measures include:

Responding to the Sports Minister’s request for safer gambling messages to be given more prominence in all adverts across all channels. This is being treated as an immediate high priority.
Ensuring that the Gambling Commission’s recent request for data is urgently provided.
Expediting agreed changes to VIPs, advertising technology and game design.
In addition to implementing restrictions on VIP accounts for anyone under 25, members will look to bring forward age-gating on advertising technology to help prevent under 25s receiving advertising along with all other measures.

The letter also provides an assurance that Betting and Gaming Council members are “firmly committed to increasing funding for RET despite the severe financial pressures.”

The pledges and additional measures, together with the marketing code for the Virtual Grand National which took place on Saturday 4 April 2020, demonstrate the industry’s renewed commitment to safeguarding customers and raising standards. This is despite the disappointing response to the current crisis from the Gambling Commission, which we wrote about in our blogs on 25 March 2020 and 3 April 2020.

08Apr

GAMSTOP, Prophet and Sportito – A Cautionary Tale

8th April 2020 Lucy Paterson 369

GAMSTOP is a multi-operator self-exclusion scheme which enables players to restrict their online gambling by self-excluding from online operators with a single request, rather than requesting exclusion from each operator individually. Through the scheme, which was launched in 2018, players in Great Britain can elect to self-exclude from online gambling websites and apps for a period of six months, one year, or five years. Once the minimum duration period has elapsed, the self-exclusion remains in force until the player requests that GAMSTOP remove them from the scheme.

Whilst initially, participation in the scheme was voluntary for operators, the Gambling Commission announced on 14 January 2020 that participation would become a licence condition on 31 March 2020, meaning that any of the more than 200 operators who had not integrated the scheme by that date would be in breach of a mandatory condition of their licence. The compulsory integration of the scheme, together with other initiatives such as gambling blocking software and payment card blocking, forms part of the Gambling Commission’s National Strategy for Reducing Gambling Harms, a three-year strategy which aims to drive and coordinate efforts to create a lasting impact on reducing gambling harms.

Indeed, the Gambling Commission did not delay in taking action against operators who had not complied by the 31 March 2020 deadline. On 3 April 2020, it announced that it had suspended the licences of two operators who had failed to integrate GAMSTOP – Dynamic Bets Inc, trading as Prophet, and Sportito.

Neil McArthur, CEO of the Gambling Commission, said:

“We have made it clear to operators that we are ready and willing to use our powers to protect consumers, as this action demonstrates. Self-exclusion is an important tool to protect vulnerable consumers, which is why we made it compulsory for all online operators to be signed up to GAMSTOP by 31 March. We took action because the operators had not complied by the deadline, which placed vulnerable consumers at risk.”

Though Prophet and Sportito have since integrated the scheme and had their licence suspensions lifted, the failure by both operators will now result in a review of their licences.

The swift action taken by the Gambling Commission highlights the absolute importance of licensees’ compliance in the current climate. The Gambling Commission has clearly shown that it will not be distracted by the global crisis and will continue to take whatever measures are necessary to protect consumers and protect the licensing objectives.

At a time when much of the gambling industry is in turmoil, licensees must ensure that they are not so distracted by protecting their commercial interests that they neglect their compliance obligations. Whilst ensuring the financial viability of the business will, understandably, be at the top of all gambling businesses’ agendas at this time, taking an eye off the ball when it comes to compliance may prove to be a very costly mistake further down the line.

Operators and suppliers should therefore ensure that they stay abreast of the Gambling Commission’s latest updates and are prepared to implement any required changes. Monday 14 April 2020, for example, will see the ban on the use of credit cards to gamble for all online and offline gambling products, with the exception of non-remote lotteries, come into effect, and operators must ensure that they are ready to implement this with immediate effect, or face similar action against their licence(s).

As mentioned in our blog post last week, operators should also be aware that the Gambling Commission will shortly launch consultations to amend the LCCP to:

introduce restrictions on customers under 25 years of age from being recruited to VIP incentive schemes;
require increased safer gambling, enhanced due diligence and spend checks before any customers are recruited to such schemes; and
require full audit trails detailing the decision-making process to require greater accountability when customers are recruited to such schemes.

Whilst no date has yet been set, these new requirements are expected to be in place no later than July 2020. It would therefore be wise for operators to consider how they will implement these changes now, in order to reduce workloads when gambling operations return to normal.

06Apr

Banks Tackling Gambling-Related Harm

6th April 2020 Lucy Paterson 374

Last year the Department for Digital, Culture, Media and Sport (“DCMS”) ministers met with banks and gambling operators to discuss their growing concerns, and how companies could use technology and customer data to help those at risk of developing gambling problems. Brigid Simmonds, chair of the Betting and Gaming Council, recently called for the banking industry to intervene with their customers in the same way that gambling operators are required to – but are banks now starting to play their part?

In November 2018, Barclays became the first high street bank to assist problem gamblers in controlling their gambling, by allowing customers to block payments relating to certain categories of spending, including gambling. Unhelpfully, it can be switched instantly on and off through its online banking app. Since then, many other high street banks have followed suit in making similar measures available to customers, which work by automatically declining any attempted payments within selected categories.

Payment blocking is just one way that banks are attempting to protect customers from gambling-related harm, and the range of measures on offer varies greatly between banks.

Whilst many banks provide the option of blocking gambling payments via both credit and debit card, at present NatWest, RBS and MBNA only offer blocking on credit card payments. When the Gambling Commission’s ban on credit cards comes into effect on 14 April 2020 and customers have no option but to use their debit cards should they want to gamble, these banks will need to review this feature if it is to provide any useful function for customers at all.

Some banks are carefully considering how best to protect their customers from gambling-related harms and are innovating new ways to do so. Starling Bank now:

signposts a customer removing a gambling payment block to the National Gambling Helpline; and

has an automatic 48-hour cooling off period before actioning a customer’s request to remove a gambling payment block.

Similar cooling-off periods are already offered by a number of other banks, including HSBC, Lloyds Bank and Royal Bank of Scotland, and is likely to prove a useful tool for problem gamblers. Research shows that providing customers with a break or interruption in play provides a valuable opportunity to reflect on their gambling and, therefore, their decision to remove the gambling payment block, minimising the risk of impulsive decisions.

Monzo and NatWest go one step further. Monzo requires customers to speak to customer services before the gambling payment block can be removed, creating friction and perhaps another opportunity to reflect on their spending.

NatWest recently launched free psychological counselling in-branch to anyone, whether or not they are a NatWest customer, who has a gambling problem. The scheme was initially launched in several branches in London and the South East, but will be extended based on demand from problem gamblers. HSBC, meanwhile, has sought the assistance of GamCare to train its staff to respond to calls from customers about gambling, and has announced that it will analyse data on card spending to see who might benefit from advice.

A holistic approach is undoubtedly the best way to help those experiencing gambling-related harms and is also the approach advocated by the Betting and Gaming Council in key action four of its Safer Gambling Commitments. It is therefore encouraging to see banks of all sizes accepting that they too have a part to play in tackling the issue, and it is hoped that banks will continue to work closely with the gambling industry, DCMS, the Gambling Commission and gambling charities to improve the tools already on offer and to innovate new ways to help customers manage their gambling.

Responsible Gambling

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Phase 2

Innovation and Testing Lab