Ask the expert Q&A: What does the new consumer protection guidance mean for operators?

In June the Gambling Commission released new consumer protection guidance to help remote operators comply with new LCCP provisions concerning customer interaction.

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In June the Gambling Commission released new consumer protection guidance to help remote operators comply with new LCCP provisions concerning customer interaction.

The new rules, described by the regulator as “stronger and more prescriptive”, were announced in April and will come into effect on 12 September this year.

Among other things, the new guidance requires operators to monitor a range of indicators to identify gambling-related harm. 

At a minimum, these include customer spend, patterns of spend, time spent gambling, gambling behaviour indicators, customer-led contact, use of gambling management tools, and account indicators. As well as greater focus on identifying indicators of risk of harm in a timely manner.

Gambling industry and regulatory expert Richard Bradley, Partner at Poppleston Allen, gives some insight on what has changed and how operators should interpret the new guidance.

How did these changes come about?

The Gambling Commission began a consultation in November 2020, calling for evidence on the steps an operator undertakes to identify at-risk customers and what actions were being implemented as a result. That consultation closed in February last year and led to the introduction of the new LCCP provision and associated guidance.

Compliance with new Social Responsibility Code Provision 3.4.3 is, of course, mandatory and requires licensees to take into account the recently published guidance on customer interaction. An operator may determine elements of the guidance are not relevant to particular operations, business models or the relative risk of harm generated by its products, services and customer profile. However, an operator must review all relevant details and provide evidence on its own policies and procedures, evaluating methods as to how the LCCP requirements and outcomes are being met.

There is now a greater expectation that an operator looks holistically at customers’ circumstances and any information obtained. There is a lot more detail in the guidance in terms of markers of vulnerability which could flag potential issues, such as if a customer mentions ill health, an addiction or homelessness during an interaction

What are the main changes in the guidance?

Many of the fundamental principles in the new code and guidance remain the same and, considering previous best practice, many operators may already have systems in place that satisfy the new recommendations and requirements. However, the Commission has become more prescriptive with its guidance, providing scenarios, case studies and suitable actions it would expect to see implemented. Essentially, we now have more meat on the bones of the interaction framework: Identify, Interact and Evaluate.

What does this framework entail?

An operator must ‘identify any potential vulnerabilities of its customers using a combination of indicators of harm, automated processes, and normal customer interaction. Importantly, some of the interactions could include the use of online chat facilities and the assessment of customer complaints. An operator working with third parties such as B2B providers must retain oversight of all customer gambling activities. 

Interact has been replaced with ‘act’, which states it may be necessary to take immediate action, such as setting account limits or suspending an account, even before a manual review and interaction can take place. Automated processes should be able to act in real time. Actions need to adapt to particular circumstances and the level of risk or severity of harm presented. The guidance prescribes ‘early generic actions’, such as pop-ups and safer gambling messaging, ‘early tailored action’, which encourages the use of safer gambling tools, through to ‘very strong action’, such as account closure. 

An operator needs to ensure the prevention of marketing and take-up bonuses by any customers displaying indicators of harm. 

There is also a greater focus on how an operator ‘evaluates’ interactions and monitoring processes. This means looking at how customer behaviour changes following any actions taken and how this feeds back into a stronger response, where appropriate.   

Furthermore, an operator must review the effectiveness of approaches and tracking play data, along with follow-up interactions to understand changes in problem gambling status. Licensees should also monitor feedback from the wider industry to ensure that shared learning experiences can be reviewed, and strategies implemented. Published problem gambling rates should also be considered for each sector and the data evaluated against the number of interactions completed.

An operator shouldn’t shy away from interactions due to the more onerous requirements, as there is evidence showing that more interaction is better

What does this mean for operators?

There is now a greater expectation that an operator looks holistically at customers’ circumstances and any information obtained. There is a lot more detail in the guidance in terms of markers of vulnerability which could flag potential issues, such as if a customer mentions ill health, an addiction or homelessness during an interaction.    

While customers may not often volunteer up such details, a customer could discuss personal circumstances in a conversation, which may warrant further investigation.

Similarly, if a money laundering check identifies a customer’s source of funds is from a medical insurance payout or inheritance, this may lead to further affordability assessments and questions about responsible play. Even a customer complaint could give rise to concerns over a customer’s wellbeing. 

An operator should be looking at its policies, procedures and training to make sure it is prepared for the changes in September.

Does this mean all customer-facing staff will now need psychological expertise?

The Commission is expecting an operator to look very broadly at players, which could seem daunting. Some may question whether an operator is now expected to be a mental health expert, but I think this may be a step too far. However, it’s imperative that all customer-facing staff have appropriate training, even if the role is not primarily focused on responsible gambling, an operator may identify other concerns that should be referred to appropriate departments and escalated accordingly. Essentially, anybody involved in (inter)actions needs appropriate training.

Customers could be warned in advance about being contacted by a member of the responsible gambling team as it may elicit a better response compared to a call out of the blue

An operator shouldn’t shy away from interactions due to the more onerous requirements, as there is evidence showing that more interaction is better. Customers could be warned in advance about being contacted by a member of the responsible gambling team as it may elicit a better response compared to a call out of the blue.   

Are further changes in this area on the cards in the near future, bearing in mind the impending publication of the White Paper?

The Gambling Commission continues its evaluation on affordability and further amendments to its guidance can be expected. While the White Paper has been pushed back for the time being, this is certainly likely to have a significant impact on the remote industry.

The Gambling Commission has also mentioned its support for the Single Customer View in the announcement of its guidance, which could be another change to watch out for. The idea has potential, but significant hurdles remain, particularly in terms of how the data is managed and shared.

Richard Bradley also recently spoke to Gambling Insider about what personal licences are and who needs one. 

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