September 8, 2022
The Gambling Commission has got itself into something of a mess with the implementation of both its new Social Responsibility Code Provision (“SRCP”) regarding customer interaction and the associated customer interaction guidance (the “Guidance”).
Taking the Guidance first, it is, as readers will recall, the detailed implementational advice, incorporated into the LCCP by reference in the current SRCP 3.4.1 and the new SRCP 3.4.3. It requires gambling operators to interact with their customers so as to prevent or minimise harm by way of gambling. The Guidance fleshes out the high-level objectives set out in the SRCP itself.
The current iteration of the Guidance provides some fifteen pages of detail, structured around the three heads of identification, interaction and evaluation. In general terms, the Guidance sets out how licensees should identify potential harmful gambling, how and when they should interact with affected (or at-risk) customers, and how they should evaluate whether that intervention has been successful and whether further escalatory intervention is warranted.
The recent history of the regulation of this element of the licensing objectives is somewhat tortuous. The current version of the Guidance was issued in July 2019 and came into force in October 2019. This was supplemented in May 2020 by some additional COVID-inspired ‘emergency’ guidance which (as a generalisation) asked licensees to turn up the dial on the sensitivity of their systems, so as proactively to identify customers who might be exposed to greater vulnerability due to the pressures of the pandemic. The Commission presented this as an amendment to the Guidance and we previously expressed our views on the Commission’s failing to follow statutory process in doing so.
On 3rd November 2020 the Commission published a full consultation on the issue of customer interaction which was schedule to close on 12th January 2021. On 18th January 2021, in response to criticism that the initial consultation was not designed to elicit responses from the regular punter, the Commission published a further ‘short survey’ on customer interaction focussing on the vexed and complex issue of affordability, a sub-element of the overall concept of ‘harm’.
On 14th April 2022 (more than a year later) the Commission announced its response, mandating a new SRCP, 3.4.3, that would apply to remote operators, and which was stated to take effect on 12th September 2022. On 20th June 2022, the Commission published its new Guidance to accompany this new SRCP, which was also intended to come into effect on 12th September 2022, synchronously with the SRCP itself.
Suddenly, and out of the blue, the Commission announced, on 2nd September 2022, that part of the new SRCP 3.4.3, and the entirety of the new Guidance, would now not take effect on 12th September 2022. The Commission’s press release accounted for this as follows:
‘The industry has requested an extension to the timeframe…it would be beneficial to use the time now available to conduct further consultation…on the guidance associated with SR Code 3.4.3 by way of a consultation on the guidance document itself…to be launched during late September and will last six weeks’.
The Commission further stated that due to all of this, the ‘postponed’ parts of SRCP 3.4.3 and the Guidance will come into effect on 12th February 2023 (“subject to consultation”). So, as of 12th September 2022, licensees are faced with a situation in which the detailed guidance for a crucial element of their social responsibility compliance, an area subject to frequent, severe enforcement action, is at best uncertain and, ostensibly, missing.
Turning to the actual provisions of the new SRCP 3.4.3 themselves, those that are effective and those that are ineffective as of 12th September 2022 are as follows:
Some comment is needed on this.
Firstly, much of this new SRCP 3.4.3 reproduces or duplicates, variously, either what licensees are already doing pursuant to the general customer interaction requirement at SRCP 3.4.1, or what they are already doing pursuant to the existing 2019 Guidance (as ‘amended by the enhanced COVID requirements), or what they are already doing in response to the Commission’s public statements associated with its enforcement actions.
Secondly, the Commission’s compliance and enforcement officers already assess the compliance of licensees according to the above expectations, or most of them, regardless of their statutory, or regulatory status, something which we will return to below. So, by and large, there is not a great deal of this new regulation that licensees will not already have implemented or will have in contemplation.
The regulatory difficulty, however, comes from the fact that the numerous requirements set out in the new SRCP that are effective from 12th September 2022, namely SR Code 3.4.3 (1), (4)-(9) and (11)-(14), will benefit from no associated guidance. The requirement to ‘take into account’ the Commission’s 2019 Guidance remains in SR Code 3.4.1, but will ‘apply to non-remote operators only from 12 September 2022’. This situation is confusing. Does the Commission intend that remote operators must continue to take into account the existing 2019 Guidance until February 2023, even though SR Code 3.4.1 will no longer apply to remote licences, and despite the fact that it contains no explicit guidance on the new de facto licence conditions as introduced by SR Code 3.4.3? Or does the Commission expect licensees to edit the new ‘not in effect’ 12th September guidance and pick out the guidance applicable to the in-effect bits of SR Code 3.4.3 – whilst ignoring the guidance relating to the postponed provisions, SR Code 3.4.3 (2), (3) and (10)?
In the House of Lords on 20th July 2022 the Parliamentary Under-Secretary of State, DCMS, Lord Parkinson of Whitley Bay, responded to various questions put to him in relation to the forthcoming gambling ‘White Paper’ in the following terms. His collective responses set out an approach which, had it been adopted by the Commission, could have avoided the current regulatory confusion:
‘The right reverend Prelate is right to point out the need for better data. We welcome work and encourage work to build the high-quality evidence base which is needed to inform policy…we have of course engaged with lots of people, including from the gambling industry, many of whom have been taking forward important actions to make sure that people can gamble safely…All the thoughts we have through [the DCMS’s] consultation will be reflected in the White Paper’.
Hopefully from 12th September 2022 through until next February there can take place a robust and well-informed discussion around the manner in which this crucial element of the licensing objectives must be implemented by licensees. A wide consultation on the SR Code 3.4.3 guidance will hopefully give operators a clear understanding of their compliance obligations and serve further to reduce the very welcome downturn in rates of problem gambling as set out in the Commission’s ‘The Statistics on participation and problem gambling for the year to March 2022’.
The Commission’s recent update can be read here.