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UK LEGAL COMMENT


accords with its views expressed over the past couple of years, and asks for additional evidence to be provided to consider in setting this threshold. Considering what would be required for a compliant


affordability check, the Commission’s view is that open source data giving figures from e.g. local average salaries is unlikely to be sufficient. In responding to the consultation, operators may wish to emphasise the usefulness of such data at least as an initial assessment at the lowest trigger level, with more personalised information required as spend increases. What is missing from the Commission’s analysis in the consultation document is that, as with other compliance matters, affordability checks should be scaled using a risk-based approach. It is obviously much more difficult to specify figures to trigger vulnerability assessments, so this will be subject to further guidance, with a particular focus on what actions operators can take when they identify vulnerability. Turning to time spent gambling, the Commission has


already specified in recent customer interaction guidance that there should be an interaction after one hour of play and seeks views on the impact that has had. It recognises that different gambling products such as poker or bingo have different typical session lengths so may be amenable to a more nuanced approach.


Interaction


New SRCP provisions would state that licensees must interact and take “appropriate” action in a timely manner when they identify risk of harm and must tailor the type of action based upon the number and level of indicators of harm exhibited. This makes it clear that the Commission could take action against an operator who took timely action upon identifying an indicator of harm, however, the action was insufficient in light of the risks – for example they used a pop-up message when a personal interaction was needed, or implemented a spend limit when the customer should have been suspended. It may be difficult for smaller operators to meet these requirements if the scale of the business does not justify having someone qualified to make these judgments available 24/7. The consultation invites comments on a proposed


categorisation of levels of interaction, ranging from “early generic” interactions such as safer gambling messaging to the “very strong” measure of ending the customer relationship.


Evaluation


The Commission proposes to make it a requirement for operators to “implement processes to understand the impact of individual interactions” and “take all reasonable steps to evaluate the effectiveness” of their approach. This is a slight change from the current wording of SRCP 3.4.1, but is quite helpful to operators as under the current drafting the way they interact with customers “must include: understanding the impact of the interaction on the customer, and the effectiveness of [their] approach”. The Commission might find any operator who does not understand the impact or effectiveness of an interaction in breach under 3.4.1, however, the new wording only requires processes to be implemented and reasonable steps to be taken.


Bonuses and offers


Finally, the Commission is considering the circumstances in which operators should be prevented from giving customers bonus offers. In particular, it states that it does “not consider the direct marketing of futures bonuses to consumers identified as displaying indicators of harm is appropriate”. Further, the Commission is considering a requirement to prevent customers from taking up bonus offers in such cases, but recognises that in some circumstances revoking an offer may breach consumer rights legislation, for example if a customer has already spent money in the expectation of receiving a bonus.


Unintended consequences


The Commission has specifically considered potential unintended consequences of its proposals in this consultation and asks respondents to add any others which have not been considered, along with suggestions for mitigating the potential issues. The consequences considered by the Commission focus on the impact of the proposed measures on the customer experience. The Commission has a statutory duty to permit gambling in so far as it accords with the licensing objectives, but two of these objectives may come into conflict in relation to some of the proposals – vulnerable persons should be protected from being harmed by gambling, however, gambling must also be conducted in a fair and open way. Customers may well find it unfair that they are required to provide evidence of their income and resources before being permitted to gamble at a certain level, or that they are prevented from receiving an offer made available to others due to spending more time gambling. Any requirements added by the Commission will need


to be carefully drafted, otherwise operators may be put in the difficult position of deciding between the risk of regulatory action by the Commission and the risk of legal action by the customer. The risk of higher spending customers being driven to illegal unlicensed operators is very likely to increase as a result of the proposals, so the Commission will need to step up its enforcement activity.


Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of


new technology for gambling products and novel product ideas.


NOVEMBER 2020 31


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