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Sector Insights

Upping the stakes on responsible gambling

10.04.2019 Regulatory solutions, Gaming & betting

Andrew Tait

Andrew Tait Partner

This article was first published in EGR Compliance, April 2019.

Now that the anti-gambling lobby has won the battle over reduced stakes on FOBTs, attention has turned back to the online sector. Despite the rates of problem gambling remaining static at 0.8% of the UK population, this still leaves us with 340,000 or so problem gamblers. Therefore, as identified by Tracey Crouch, the then DCMS minister, in her May 2018 review, the next area of focus is the online sector

This started with a consultation and subsequent tightening of advertising-related LCCPs to align with CMA and ASA changes on transparency and fairness of promotions, which came into effect on 31 October 2018. On top of this there's an important ongoing consultation, ending 9 May 2019, which imposes more proactive requirements on operators to interact with customers to reduce problem gambling. LCCP changes coming on the back of this are likely to be in place by the end of the year.

Level playing field

Customer interaction is of paramount importance as a preventive measure. However, it's particularly difficult for an operator to get right as they must not only balance the commercial needs to encourage responsible customer spend but also to protect the customer by knowing more about them. The proposed changes to the LCCP involve scrapping the existing codes (SR 3.4.1 and OR 3.4.2) and replacing them with a much more streamlined SR code. No doubt the Commission felt it had to take this action due to the inconsistent implementation of the existing code across the operator base. This now creates a level playing field, requiring all operators to invest resources in this area before the inevitable assessment and enforce by the Commission next year.

The first step in player interaction is to identify customers who may be at risk. operators are now specifically required to research relevant indicators of this in the context of their own business. They should review generic research in this area and conduct their own historical data analysis.

The second step is interaction itself. This should be consistent irrespective of the time of day or night. Operators need to implement specific types of interaction, ranging from automated warnings to imposing limits or even suspending accounts. Therefore a segmented and graduated approach needs to be in place with reliance on comprehensive staff training and supervision.

The third step of evaluation requires operators to analyse the effectiveness of their interactions and make improvements based on real data. It’s therefore essential to compare behaviours before and after measures are taken ad have records to support this.

Credit card use is next in line for possible banning or restrictions following recommendations from the Responsible Gambling Strategy Board. This is despite the fact that customers can load eWallets with credit cards, which circumvents this restriction or, even more alarmingly, take out pay day loans and overdrafts and continue to play irrespectively. It’s therefore important that the industry points out the fallacy of such an outright ban while at the same time negating the need to impose it in the first place by demonstrating their successful implementation of the player interaction measures.

At the end of the day the online sector has by its very nature much more real-time information on the player activity than the offline sector and should be able to better detect and prevent problem gambling. It needs to use these strengths to create a safer and more sustainable environment, otherwise it may be treated the same as the offline sector when it comes to imposing stake limits and pay outs.

Article authors:

Andrew Tait