May 12, 2020

We have previously published a blog piece explaining how gambling operators must ensure that children and vulnerable people are protected where it can be shown the risks of harm arising from online gambling during the current lockdown period. The Gambling Commission has now issued further guidance to ensure that “consumers are further protected following the publication of new evidence that shows some gamblers may be at greater risk of harm during lockdown.”

This new guidance, issued today, for online operators significantly amends Social Responsibility code 3.4.1 (“SRCP 3.4.1”), which covers the requirements of operators to “interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling”. Included as part of SRCP 3.4.1 is a requirement to adhere to formal guidance issued by the Commission. It issued such guidance in July 2019 and has today taken the step of introducing significant amendments to that guidance without, as far as we are aware, releasing any details of the consultation that is mandated by s.24 of the Gambling Act 2005 for any such code change. One might argue the code provision has not actually been changed, rather the guidance has been changed (without notice).  Yet, the Commission did consult the industry and other relevant stakeholders when it last published an updated version of the guidance in July 2019, with a 12 week consultation process.

A brief summary of the Commission’s amends to SRCP 3.4.1 can be found below, which makes clear that online operators should:

• prevent reverse withdrawal options for customers until further notice;
• cease to offer bonuses or promotions to all customers who are displaying indicators of harm;
• interact with customers who have been playing for an hour in a single session of play;
• review thresholds and triggers for new customers to reflect the operator’s lack of knowledge of that individual’s play and spend patterns;
• conduct affordability assessments for individuals picked up by existing or new thresholds and triggers which indicate consumers experiencing harm – limiting or blocking further play until those checks have been concluded and supporting evidence obtained, and;
• implement processes that ensure the continual monitoring of their customer base – identifying patterns of play, spend or behaviours have changed in recent weeks.

It is noteworthy that the Commission has taken the step of issuing a set of requirements that operators need to adhere to “as soon as possible”.  There are numerous, potentially relevant, process requirements the Commission needs to observe when varying codes of practice, including one to consult with the industry before a change is implemented. The Commission may, ‘without giving notice’ make any necessary changes ‘if the Commission thinks it necessary by reason of urgency’ to licence conditions but, although SRCP 3.4.1 may have the weight of a licence condition, it is actually a code provision.

To accompany the changes to SRCP 3.4.1, the Commission has published data showing the impact that Covid-19 is having on consumers and the industry.  This can be found here and here. The Commission explains that:

“Collected through the gambling industry and also through YouGov surveys this data shows that during lockdown gambling participation is down overall. This reflects the closure of land based venues and the cancellation of sporting events, with only a small number of people starting to gamble for the first time.

However, while there is no evidence to suggest an increase in problem gambling, the shift in the market as a result of Covid-19 evidence shows an increase in the use of certain gambling products such as online slots, poker, casino gaming and virtual sports.  

The majority of those gambling indicate that they have not increased the time or money they have spent, two thirds (64%) of more engaged gamblers reported that they have increased the time or money that they are spending on at least one online gambling activity including National Lottery products.

The data also shows that in terms of time spent gambling, while overall session length has decreased, there has been an increase in the number of sessions that are played for over an hour.”

The data, generated from a YouGov survey of just over 2000 people shows a small increase in their use of certain gambling products (for example 2% of those surveyed said they spent more money on online slots, 1% on virtual sports and 0.6% on virtual sports in the preceding 4 week period).  The data obtained from industry itself suggests a material year-on-year increase in the use of certain products. Given that there are no sporting events, it is not surprising that other gambling products, such as casino, virtual events and poker, will become more popular as a result of fewer products being available in the market. Various insightful analyses of the data are doing the rounds on Twitter, clearly demonstrating differences in interpretation. The Commission itself is relatively vague as to why the data justifies such an urgent regulatory intervention.

In addition to an immediate amendment of SRCP 3.4.1, the Commission has further explained that they “will bring forward plans to consult on whether further targeted player protection measures are required on a permanent basis”. The industry needs to prepare itself to input on such a consultation to ensure any permanent changes are justified, reasonable and proportionate to achieve their stated aims.

Finally, it is worth noting that the Commission clearly state “these measures will be kept under periodic review by the Commission and may be revised in responses to change in circumstance”. On the basis the changes announced today are presented as a response to the potential consequences of the lockdown, one would expect the Commission’s upcoming consultation to attract industry response on whether it would be proportionate for such provisions to remain in place, as is, post-lockdown.

A link to the Commission’s update can be found here.