Much has already been written about the Gambling Commission’s September 2018 consultation on proposals to introduce new licence conditions. These include bolstering requirements for operators to verify the age and identity of customers before depositing and gameplay is permitted.
This was identified as a priority in March 2018, when the Commission published its Review of Online Gambling. Whatever the responses to the latest consultation, it’s inevitable that the Licence Codes and Conditions of Practice (LCCP) will be revised from April 2019 to bring these changes into force.
A more controversial proposal contained in the Commission’s Review of Online Gambling, which is referred to but not part of the consultation is the proposal to introduce mandatory limits on customers’ gambling activity.
The Commission has stated that it intends to consult “at a further date” on these proposals, which it considers will reduce gambling-related harm. Under the future proposals, operators will have to impose financial limits until further information about the customer’s financial means have been verified and an increase is justified.
Mandatory financial limits will represent a departure from the current method of giving customers the option to set limits on their own activity, to one introducing restrictions on deposits or losses by default.
Under the current LCCP and Remote Technical Standards (RTS), remote licensees must apply policies and procedures for customer interaction where they have concerns that a customer’s behaviour may indicate problem gambling. Such procedures must include interacting with customers who are showing signs of obvious and overt problem gambling — but also talking to customers who are not displaying those signs, by reference to time or money spent.
Specific player protection measures are required for high value or VIP customers. In addition, RTS 12 requires that customers must have the ability to set their own deposit or spend limits on registration, or at any time after registration.
Operators must offer financial limit facilities for periods of 24 hours, seven days or one month, and a 24 hour “cooling off” period (with subsequent confirmation by the customer) is required before an operator can increase a previously set limit.
When combined with “time spent gambling” notification requirements and the option to set reality checks, as required by RTS 13, there are already quite comprehensive measures in place to protect consumers.
However, crucially, the current measures are reliant on customers using these optional features to protect themselves from harm. Often it will be the very people who are at risk from gambling who will ignore these facilities and will carry on gambling regardless.
The Commission is now proposing that it will take matters out of the hands of consumers and will impose financial deposit or loss limits by default.
Prescribed limits
In the consultation, the Commission asks respondents to provide information or evidence of good practice that helps licensees to ensure gambling remains fair and safe. The Commission seeks evidence of both existing good practice and what measures are possible, with a view to formulating future proposals for mandatory account limits. Licensees, identity verification providers and gambling customers are encouraged to respond, with a view to influencing the future proposals.
At present, there is no indication from the Commission of what these mandatory account limits might be and when they would apply. For example, we don’t know yet if they would relate to deposits, spending or losses.
It’s possible that the same financial limits will not apply across the board, but that different customers could be allocated different financial limits for example, utilising postcode deprivation indices, economic data and credit searches. It’s possible that the Commission will consider imposing variable limits tailored to each customer.
The Commission asks for evidence of “risk factors” of harm, which can be detected early on in a relationship with a new customer, such as failed deposits at first attempt, use of high interest credit cards, large numbers of payment methods registered, bonus and void requests and patterns of play. It is particularly keen to hear from operators who have voluntarily applied limits to customer accounts and how effective those measures have been.
These proposals will be ringing alarm bells with some remote operators, particularly casino operators with a large number of “high value” or VIP customers. Staking and losses for these players are likely to far exceed any mandatory limits that may be imposed. Even if the default limits could be increased further down the line once more information is known about a customer’s financial means and behaviour, mandatory restrictions are likely to hit operators’ turnover and profits.
It’s interesting to note that these proposals are being progressed despite data published by the Gambling Commission itself which indicates that rates of problem gambling in the UK are static.
Of course, the Commission has an obligation to protect the vulnerable from harm, including those in this static group, but there is likely to be criticism in some quarters about the creep of the nanny state. While restrictions on products such as alcohol and tobacco can easily be justified as they are fundamentally harmful to health, the major risk of gambling addiction is financial.
For some, it’s quite a step to move from giving individuals options to monitor and rein in their gambling outlay, to preventing them from spending their own money however they wish. Clearly society needs to consider where we are heading with these types of proposals. Shopping can be addictive – if we follow this path, how long will it be before places such as car showrooms, handbag and shoe shops will be required to display warnings about irresponsible spending?
While a considerable number of individuals use gambling as a harmless leisure pursuit, there will always be people at the extreme end of any compulsive activity. The question is, what active measures are justified to protect those individuals from harming themselves?
Richard Williams is a partner and joint head of the gambling, licensing and regulatory team at Joelson.