As UK land-based gambling premises start to re-open – betting shops this week with casinos, bingo clubs, AGCs and FECs to follow in the coming weeks – the issue of mobile, contactless and cash-free payments has come more to the fore whilst the UK remains subject to Covid-19 restrictions.
Operators are reminded that, in addition to its recent “Information for gambling operators re-opening land-based gambling premises”, the Gambling Commission has published on its website guidance entitled “Cashless payment technologies in gambling premises” (that you can download below).
In addition to the important minimisation of gambling related harm considerations set out in that guidance, operators should take particular note of the Commission’s comment that:
“Our view is that card payments that originate from contactless mobile payment systems such as Apple Pay, Android Pay or Samsung Pay should be regarded as the same as payments ….. by means of a card itself. This is because the device used for such types of payment (eg a smartphone or watch) is essentially just a medium by which a contactless card payment is made (ie the debit card sat behind the payment system is charged directly and the customer’s bank account is debited; the same as for any payment where the debit card itself is used)”.
Albeit that it refers to debit cards, this is similar logic to that applied by the Commission in relation to the credit card ban for all forms of remote gambling and for non-remote betting that came into force on 14 April 2020, that was re-emphasised in the Commission’s “Guidance on credit card payments made through Money Service Businesses” published on 10 June 2020.
Prior to that credit card ban, a prohibition on accepting payments for gambling by way of credit cards already existed in the case of:
- land-based casino and bingo operators by section 81(2) of the Gambling Act 2005 and
- AGCs and FECs by Licence Condition 6.1.1
The Gambling Commission’s above-mentioned “Cashless payment technologies in gambling premises” guidance (that was published prior to the above-mentioned credit card ban on 14 April 2020) states as follows:
Cashless payment technologies in gambling premises
In recent years there have been significant innovations in payment technologies available in the retail economy, allowing consumers much greater choice in how they can pay for goods and services.
The increasing popularity of debit card and contactless payments, and advances in technology that enable payments via phones, watches and wristbands, has coincided with a significant decline in the use of cash by consumers. It is predicted that such trends will continue (Payments UK, Changing Payments Landscape; How 2017 will change the way we pay for good, January 2017).
Gambling businesses are keen to ensure that they can offer their customers the same level of choice in payment options as other sectors of the leisure industry. Several operators have sought advice and guidance from us on their specific proposals for cashless facilities.
While such developments in payment technology were not foreseen when the Gambling Act 2005 and supporting regulations were drafted, the legislation does, in most respects, permit operators to innovate and make cashless forms of payment available. However, the legislation also provides some important consumer protection measures. These aim to reduce the risks of customers spending more on gambling than they might be able to afford, or exceeding their budgets for a gambling session (for example, there are specific restrictions in relation to payments to use gaming machines, detailed further below).
We are supportive of innovation, provided the way in which it is done is consistent with the licensing objectives. We expect operators to ensure they are mitigating and minimising the risks of gambling-related harm when they make new payment facilities available in their premises. Operators should also be leading the way on identifying how innovation in products and services can support innovation in protecting and empowering consumers.
The responsibility rests with operators to be able to demonstrate that their payment solutions have been designed and made available with player protection measures in place. We may consider taking regulatory action in individual cases if, for example, an operator was to increase the risk of harm to its customers without providing appropriate mitigations. More generally, we may also consider options such as changes to our Licence Conditions and Codes of Practice (LCCP) or advising government, in order to strengthen controls where necessary.
Minimising gambling-related harm
Key considerations for operators
Research evidence demonstrates that individuals can frequently gamble more money than they intended during gambling sessions, making impulsive decisions that override their initial intentions to allocate a set amount of money with which to gamble (seeKey issues in product-based harm minimisation by Parke A, Parke J and Blaszczynski, A, published by Gamble Aware in December 2016, for a summary of the research evidence). Easy access to additional funds in gambling premises can therefore be a risk factor for problem gambling.
Research also shows that non-cash payment methods in gambling can lead to consumers over-spending, as such methods require less thinking about the actual cost and affordability implications of a transaction ie the amounts being spent, compared to cash payments.
It is for operators to consider how player protection and empowerment can be most effectively delivered in practice. They are best placed to assess which measures are most effective in mitigating the risk of customers spending more on gambling than they might be able to afford, and which are most effective in enabling customers to retain control over their own gambling spend. Operators may need to take account of specific risks such as the layout of their premises or vulnerabilities for particular customers.
As part of their assessments, however, and subject to them being able to evidence that they can implement any other suitable alternative for mitigating harm which is equally or more effective, operators must consider how they can facilitate the following:
Customers should be required to take a break from gambling before they access and use new funds to continue gambling.
- While there is no evidence to suggest what the optimum duration of a break should be, wherever possible the customer should at least be required to cease gambling at, and physically leave, the machine, terminal or table at which they are situated, so as to provide some time away from the gambling facilities before they are able to access and use new funds (consistent with the mandatory conditions attached to all premises licences that any ATM is located in a place that requires customers to cease gambling and leave the gambling product in order to use it).
- In any circumstance where customers might be able to access new gambling funds with only a limited or no physical break from the gambling product (for example, where customers might be able to use a debit card to replenish an app-based digital gambling ‘wallet’, or otherwise fund that wallet directly from their bank account), the operator must nevertheless ensure that customers are otherwise provided a break from, or an interruption in, gambling before those funds can be used.
The purpose of the break or interruption in play is to reduce the risk of harm to players that could arise from their losing track of the time and money they have spent gambling. By interrupting their state of dissociation, a break in play can give customers an opportunity to evaluate and reappraise their own gambling behaviours, and could therefore facilitate better control (see Operator-based approaches to harm minimisation in gambling, by Parke A, Parke J, Blaszczynski, A and Rigbye J, published by Gamble Aware in 2014). A break or interruption in play could therefore involve, for example, slowing the transactional process and providing delays before new funds are made available to the player for use; perhaps combined with informative messaging, so as to support the player’s control and awareness of their gambling spend.
Operators should use these new opportunities to support innovation in the protection and empowerment of consumers. For example, cashless payment technology may assist operators in tracking their customers’ play, allowing them to collect better data on their customers’ gambling behaviour and therefore helping to inform an assessment of those who may be at risk of gambling-related harm.
The new technologies may also assist in the provision of tailored responsible gambling information to customers, including transactional information on the sums of money they have spent or withdrawn; or the development of player-led controls to enable better self-management of the customer’s gambling (eg allowing customers to set their own spend or withdrawal limits).
We encourage operators to consider how they can gather data both before and after the implementation of any measure so that they can demonstrate the impact of control measures.
Licence conditions and codes of practice (LCCP)
There are certain conditions and codes of practice that must be adhered to when providing cashless payment facilities. These include, for example, the need to implement effective policies and procedures for minimising certain risks to the licensing objectives; and provisions that limit the circumstances in which credit can be provided, or credit cards accepted (and where the Gambling Act does not otherwise prohibit or restrict any such facility). Operators should refer to the LCCP for full details of the relevant requirements below:
- Licence condition 5.1 – cash and cash equivalents, payment methods and services [NB Since 14 April 2020, regard should also be had to Licence condition 6.1.2 – use of credit cards]
- Social responsibility code provision 3.7.1 – credit cards [NB this SR code provision was removed from the LCCP on 14 April 2020]
- Social responsibility code provision 3.7.2 – provision of credit [NB this SR code provision was renumbered 3.7.1 on 14 April 2020]
Specific matters in relation to gaming machine payments
The Gaming Machines (Circumstances of Use) Regulations 2007 provide prohibitions and restrictions on the use of debit and credit cards for payments to play machines, which are straightforward safeguards intended to prevent consumers from gambling more than they can afford via a card.
Our view is that card payments that originate from contactless mobile payment systems such as Apple Pay, Android Pay or Samsung Pay should be regarded as the same as payments to use a gaming machine by means of a card itself. This is because the device used for such types of payment (eg a smartphone or watch) is essentially just a medium by which a contactless card payment is made (ie the debit card sat behind the payment system is charged directly and the customer’s bank account is debited; the same as for any payment where the debit card itself is used).
Both contactless card and mobile payment system transactions can be completed quite rapidly, and so the risks to the consumer are largely identical.
The regulations also prescribe limits as to the amounts an individual can deposit onto a gaming machine in any single action, and separately the (non-refundable) amount a player can commit to play the machine. These measures were designed to ensure consumers make regular decisions as to how much money they wish to commit to play a machine, and they must be observed regardless of the means of payment. That is, whether the customer has inserted cash into the machine, or whether they have transferred funds from a debit card via indirect means, a TITO (ticket-in, ticket-out) method or an operator-provided app-based digital wallet, a customer must only be able to deposit and commit funds to the gaming machine’s meters in accordance with these limits.
Checklist of considerations
We welcome sight of novel product or concept developments before they are deployed in the market. We do not, however, approve individual products, and the responsibility rests with operators to ensure that their developments are compliant and will help to deliver the licensing objectives of the Gambling Act. It is recommended that businesses obtain their own legal advice in this regard.
To assist developers however, we have provided below a broad checklist of items that we expect them to have considered before contacting us. The list is not exhaustive and must not be considered in isolation from the advice above, but it provides a basic list of key issues.
In respect of the cashless technology product or system you are developing, you should be able to fully explain:
- How exactly you will ensure that consumers are required to have a break from gambling before they are able to access and use new funds?
- How you have satisfied yourself that you will be compliant with the Gaming Machine (Circumstances of Use) Regulations in respect of the use of debit or credit cards, payment limits and committed payment limits?
- What anti-money laundering controls you have considered in designing your solution. For example, would a player be able to fund a gambling product via cash and then withdraw funds via an app or digital wallet?
There are also a variety of harm mitigation and consumer empowerment measures that you should consider. You should ask yourself:
- What information can your product provide to the consumer about their own gambling? For example, will consumers be able to access information on their transactional gambling history, such as their total gambling win and loss (or account deposit and spend) over certain periods of time?
- Are you able to provide tools that enable the user to manage their gambling? For example, can the consumer use the product to set limits on the amount of money they are able to deposit or spend over a certain period of time? Is there a range of limits available? What alerts would be triggered when a limit is reached? How will the limit-setting be made effective in terms of reducing the risk of gambling-related harm?
- Does the product allow for users to voluntarily stop themselves from using the product for gambling purposes for a period of time? Or provide a period of cooling off whereby the product cannot be used for gambling for a certain period of time after limits have been amended by the consumer?
- If the product or system is to be made available for use with different gambling products (including different categories of gaming machine), how will you ensure that your solution is sufficiently versatile to respond to the different nature of each gambling product and the associated risks or legal requirements?
- Does your solution enable you or a gambling operator to monitor customer behaviour (eg the gambling spend or intensity of an individual customer) over a period of time?
- How can you prevent, or assist in the prevention of, underage gambling?
As indicated above, the above-mentioned “Cashless payment technologies in gambling premises” guidance was first published by the Gambling Commission prior to implementation of the credit card ban for all forms of remote gambling and for non-remote betting, which is why – pending the guidance being updated by the Commission – we have inserted above reference to the current applicable LCCP provisions.