From September 12th, new customer interaction rules are coming into effect for UK slot sites and online operators. They follow a string of recent measures that have geared up player protections and come ahead of the Government’s Gambling Review. The new rules have been added to the operator Licensing Conditions and Codes of Practice and apply to all remote license holders, except lottery licenses. Let’s look at the new rules and what they mean for UK gambling brands.

What are the new rules?

The new rules, which can be located in the LCCP, section 3.4.3, are as follows:

1. Effective customer interaction systems and processes must be implemented to minimise the risk to players experiencing gambling harm. They must embody the fundamental principles of “identify, act and evaluate”.

2. Licensees must stay current and account for revised advice from the Commission on customer interaction.

3. Factors that increase vulnerability to gambling harms must be considered, and licensees must take timely action when indicators of harm are identified.

4. There must be effective systems to process and monitor customer activity to identify harms and potential harms from the point of account opening.

5. The range of indicators used to identify harms or potential harms must include:

• • customer spend
  • patterns of spend
  • time spent gambling
  • gambling behaviour indicators 
  • customer-led contact 
  • use of gambling management tools
  • account indicators.

6. The licensee is responsible for ensuring compliance, even if a third-party service is contracted.

7. Appropriate action must be taken promptly once harm has been identified.

8. The action must be tailored based on the identified number and level of harm indicators. This must include:

• • Tailored action at lower levels minimising future harm.
  • Increasing action where earlier stages have not had the required impact.
  • Strong action as the next step, rather than gradually increasing efforts.
  • Reducing or preventing marketing or the take-up of new bonuses where appropriate.
  • Ending the relationship where necessary. 

9. Marketing and the uptake of bonuses must be prevented in the case of strong indicators of harm.

10. In the case of strong harm indicators, processes should be automated to ensure timely assistance to players. In these cases, the licensee must manually review each case and allow the customer a chance to contest the measures.

11. Licensees must have processes to understand the impact of individual interactions on customers’ behaviour to evaluate if further action is needed.

12. All “reasonable steps” must be taken to evaluate the effectiveness of the licensees’ approach. The outcomes of such evaluation must be demonstrated to the Commission upon request.

13. Lastly, problem gambling rates must be taken into account by licensees as a minimum benchmark to ensure the minimum level of customer interactions is within the same rate.

What problems do they solve?

During the consultation and call for evidence, The UKGC found that while operators could interact with players experiencing gambling harm, they didn’t always opt to or, in many cases, were too slow, leading to damage. There have been clear cases in the past where operators have allowed gambling harms to occur due to non-action, such as the VIP scheme fiasco that allowed players to spend irresponsibly without proper account checks in place.

The new social responsibility code provisions aim to protect all players better and, in the case of severe harm indicators, as the interaction processes will be automated, remove the ability of operators not to act. In particular, the new rules will prevent:

• unaffordable binge gambling
• significant unaffordable losses over time
• failure to identify consumers who are particularly financially vulnerable

It’s worth noting that the current rate of problem gambling in the UK is 0.2% (a drop from 0.4% in the preceding year), with moderate and low-risk rates also stable at 0.9% and 1.4%, respectively, according to the UKGC, 2022.

What effect are the new rules going to have?

The expectation is that the new rules will protect players from gambling harm, better identify problem gamblers and stop players who are showing indicators of damage from slipping through the net. 

For UK slot sites, this means implementing new systems for identifying potential harms based on indicators, inputting automatic and manual processing, and continually evaluating said measures. In many cases, these changes will likely be implemented using algorithms, with a team in charge of the manual implementation of interactions, account limitations, and the evidencing of actions as prescribed in the rules. This will come at a cost for online operators, which may also be twinned by a drop in revenue (albeit an arguably necessary drop due to increased player protections across the board) and makes the UK market less attractive to gambling brands.

In the broader context, it comes as yet another increase in the regulatory UK gambling environment, which some industry stakeholders, namely the Betting and Gaming Council and PwC report, have argued will lead to higher rates of offshore gambling, putting more players at greater risk rather than protecting them (evidence shows the size of the UK black market has doubled in the last two years, corresponding with greater regulation). The growth of the black market in tandem with increasing regulation has been evidenced in other European countries, like France and Norway. It also comes at a time when players are voicing concern about greater regulation, with a recent YouGov Poll recording two-thirds of UK bettors saying they would opt for offshore sites should the UK implement mandatory player budgets.

However, as this guidance specifically uses problem gambling indicators and measures behaviours carefully, prescribing measures based on the number of indicators displayed by players, as well as allowing them the chance to contest the actions (point 10 in the rules above), they cannot be considered as blanket measures that affect all players as the suggested player budgets could.