In August 2014 the Gambling Commission (GC) published for consultation a range of proposals for strengthening the social responsibility provisions in the licence conditions and codes of practice (LCCP).
The results of that consultation have now been published along with the proposed revisions to the LCCP, most of which come in to force from the 8th May 2015.
It is acknowledged in the response from the GC that the “fundamental tension at the heart of gambling policy – that gambling benefits a lot of people a little and harms a few people a lot – runs right through the statutory framework for the regulation of gambling”. Nevertheless, and as a consequence of the consultation, a number of proposed changes in the LCCP have been identified. We highlight below some of the more significant changes identifying which are Social Responsibility Code provisions and which are Ordinary Code provisions.
Social Responsibility Code Provision (SR) – compliance with these conditions is a condition of licences. Any breach may lead to a review of the operator’s licence, which in turn may lead to suspension, revocation or financial penalty.
Ordinary Code Provision (OC) – these do not have the status or operator licence conditions but set out good practice.
Access to Gambling by children
So as to ensure that licensed premises are not accessed by children a new SR code provision will be added as follows:
- Licensees must ensure that their policies and procedures take account of the structure and layout of their gambling premises
In practice, this does not mean that structural alterations to premises must be made. Operators will need to consider for example the use of cctv, mirrors, positioning and the number of staff. Only when these measures have been exhausted would it become necessary for an operator to consider making physical alterations to the premises.
Most large operators within the gaming sector, in common with their counter parts within the alcohol sector, carry out regular test purchase exercises, using third party organisations. Invariably these results are shared with the GC. A new SR code provision will be added to the larger operators of AGC’s, bingo and betting premises as well as to all non-remote casinos:
- Licensees must conduct test purchasing or take part in collective test purchasing programmes as a means of providing reasonable assurance that they have effective policies and procedures to prevent underage gambling, and must provide their test purchase results to the GC (exclude smaller operators)
Smaller operators will now need to consider how they monitor the effectiveness of their policies and procedures for preventing underage gambling, and to be in a position to share these with the GC. This does not necessarily require smaller operators to carry out test purchases, although it could well form part of the policy addressing this concern.
A proposal to replace Think 21 with Challenge 25, and bring the sector in to line with alcohol retailers has, for the time being, been placed on hold.
The GC views this as a key area for development. As a consequence a new SR code provision will be added to the LCCP for all retail operators which will require them to:
- Use all relevant sources of information to ensure effective decision making and to guide and deliver effective customer interactions, in particular to identify at risk customers who may NOT be displaying signs associated with problem gambling; specific provisions in relation to high value customers and specific provisions in relation to customers demonstrating signs of agitation, distress, intimidation or aggression. The practical effect of this for operators will be a need to demonstrate increased levels of training – both induction and refresher – for staff to ensure that the required levels of effective interaction are implemented.
The GC are also introducing as an OC provision a request that “all operators…work together to share experience and deliver good practice across a range of social responsibility requirements for customer interaction”
Multi operator exclusion
Aligned to customer interaction is the GC’s proposal that there should be a multi operator self-exclusion scheme in place for both remote and non-remote operators.
In so far as on line operators are concerned, they will be required to “participate in the national multi- operator self-exclusion scheme” within one month of the scheme being established.
In so far as non-remote operators are concerned a new OC provision requires all operators to “contribute to and participate in the development and effective implementation of a multi operator self-exclusion scheme” with a view to this being implemented on the 6th April 2016.
Time and monetary limits
All betting offices will have a new SR Code provision that address B2 time and monetary thresholds which will require licensees to “ensure that all B2 machines that they make available for use require customers to make an active choice whether to set time and monetary thresholds for customer and staff alerts”.
In conjunction with these proposed changes is the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015. These regulations will mean users of B2 machines in betting office premises who pay more than £50 for use of a machine will be subject to what are to be known as an identification condition; a supervisions condition; and a proceeds condition.
These regulations come in to force on the 6th April 2015.
Local Risk Assessment
In the consultation document the GC proposed that operators who provide gambling facilities from licensed premises should take steps to address local risks to the licensing objectives. This would bring gambling premises and applications for gambling premises closer in to line with their counter parts under alcohol licensing legislation.
As a consequence of this, from the 6th April 2016 a new SR code provision will be introduced requiring all licensees to:
- Assess local risks to the licensing objectives pose by the provision of each of their premises and have policies, procedures and controls in place to mitigate those risks.
Local risk assessments should be reviewed on any significant change of circumstance, any change in the circumstances at the premises, when applying for a variation of a premises licence; and in any case when applying for a new premises licence.
Although perhaps not formalised as such as a “local risk assessment”, most, if not all, operators will already make a full local risk assessment of any new premise that they intend to open or, where for example, there is to be a change in the proposed operating hours. These current risk assessments would also go beyond addressing the licensing objectives under the Gambling Act 2005 and would address such issues as broader health and safety and safe working practices.
Marketing, advertising and unfair and open terms
Fair and open terms
The GC sought views on whether further action was needed to address operator’s terms and conditions in light of the impending Consumer Rights Bill. Specifically it considered if existing terms were considered unfair or unclear to consumers, whether more could be done to enhance the fairness of terms, whether existing/ future legislation was sufficient to cover gambling contracts and how operators should implement changes to terms and conditions.
While the GC concluded that current LCCP provisions were sufficient to enable it to take action on a case by case basis in relation to the fairness of an operator’s terms and conditions, it proposes to review the Governments general guidance to businesses on the Consumer Rights Bill which is expected in April 2015. The GC will, if appropriate, supplement that guidance with further gambling specific guidance to assist both industry and consumers in understanding fair and open terms.
Socially responsible rewards
Offering rewards that are dependent on a customer gambling for a pre-determined length of time or within a pre-determined frequency is unacceptable however the GC notes that it is not unreasonable for operators to define a qualifying level of activity in order to prevent ‘bonus abuse’.
The GC has stated that further work is required in this area in the interest of protecting socially responsible rewards and to help inform operators what is and is not acceptable. Industry can expect a further consultation on a revised code of practice that would seek to clarify the position in due course with any proposal likely to include illustrative examples of good and bad practice.
Fair and open marketing
To align more strongly with the existing UK advertising codes of practice, the GC has amended section 5.1.6 of LCCP clarifying that the provisions set out in the CAP and BCAP Codes and its subsequent guidance on gambling and, in particular, “free bet” offers, apply to all operator’s marketing activity.
In addition, in response to the level of public concern and political interest concerning bonus offers and the significant number of upheld ASA adjudications on such offers, a new social responsibility code will apply which explicitly requires that Licensees must satisfy themselves that all marketing activity adheres to the Consumer Protection from Unfair Trading Regulations (2008) and the relevant provisions as set out in the CAP and BCAP codes.
From 8 May 2015 operators will be need to be au fait with the Advertising Standards Authorities interpretation of the CAP and BCAP codes specifically in relation to the way in which significant material information and limitations should be communicated to consumers. In particular, operators will need to have a good understanding of how complex bonus incentives can be compliantly communicated in instances when a marketing communication is limited by time and/or space.
Operators have a relatively short period of time within which to re- align their business strategies so that they are compliant with the revised LCCP.
The revisions will see greater cross industry collaboration, which can only be a good thing, and which builds on the industries voluntary proposals to improve social responsibility following the establishment of the SENET Organisation.
There will also be greater responsibility on operators to train those members of staff who have direct interaction with customers, to ensure that they are better placed to identify those members of the public who are at risk but who are NOT displaying the recognised signs of problem gambling.
Finally, in the long term there is a clear steer from the GC that removing anonymity from those who gamble will become the norm for two principle reasons. Firstly there are common interests in finding better ways to prevent and reduce problem gambling. Secondly, and perhaps more importantly, it is increasingly being seen as, simply, the right thing to do.