It states that its “experience through compliance activity and case work suggests that a prescribed set of requirements can lead to assumptions amongst operators that simply following a ‘checklist’ will mean that harm cannot occur, or that the operator is in any case compliant”, concluding that it does “not think this is an appropriate approach to customer interaction, as operators may focus on compliance with technical details rather than on achieving the key outcome that the code provision intends”.

The Commission proposes to introduce a requirement to the LCCP that licensees must take into account the Commission’s guidance on customer interaction. This guidance is structured along the three key outcomes operators will be expected to meet: i.e. identify – interact – evaluate. It explains this approach as follows:

1  Identify

Not all customers who may be experiencing harms will display signs in the same way, and what may be indicative of healthy and controlled gambling activity in one individual could be harmful in another.

In order to increase the likelihood of identifying harmful gambling, operators need to use a range of different indicators that are appropriate to the gambling product, the environment and what is known about the customer, or can be inferred. These need to be supported with robust, proportionate and effective systems for monitoring and recording.

The indicators will vary depending on the type of gambling. Operators must use the appropriate indicators for their business, based on research, experience and shared practice. These may include:

• Time – such as the frequency of gambling sessions or visits, the length of time spent gambling and the time of day of the gambling session.
• Money – the amount of money deposited, the frequency of deposits etc.
• Staking behaviours – such as chasing losses, erratic betting patterns
• Product choice – high risk (eg high volatility/low RTP games, or betting on outcomes that the customer is unlikely to have made an informed choice about such as niche overseas sports markets)
• Account and transactional – multiple funding sources, declined payments, cancelled withdrawals, using credit cards or other higher risk payment sources and wallets
• Use of gambling management tools – such as changing deposit limits, the remote time-out facility, records of previous self exclusions or customer interactions
• Customer contact – signs of distress, agitation or complaints
• Physical/visual signs – changes to or deteriorating physical appearance

2  Interact

It is not enough to be able to identify customers who may be experiencing harms associated with gambling. Gambling operators are required to interact with the customer in order to find out whether they may need help or support in managing their gambling, or to stop or restrict their gambling.

Each operator will need to implement systems and processes appropriate to their business in order to meet the outcomes required by the proposed SR code provision, taking account of the following principles:

• Customers receive the same levels of protection regardless of when or where they gamble. They are not placed at greater risk because they gamble overnight or at weekends, or because a venue is busy.
• Operators interact promptly and early to reduce the risk of greater harm occurring.
• Operators are prepared to refuse business or prevent the customer from gambling, in order to minimise the risk of further harm.

In some situations, the interaction may need to take place at a later time, for example if the customer was displaying signs of agitation, distress or aggression which may inhibit a customer interaction. These incidents must be noted, and the interaction take place at a time when the customer may be more receptive to the interaction, and when the circumstances and situation are more conducive to interacting.

A customer interaction itself has three parts:

• Observation – which triggers the interaction
• Action – to make contact with the customer
• Outcome – what happened as a result

(1) Observation

This is the behaviour or activity which prompts an interaction. There are few hard and fast rules about how harm can manifest itself in a customer’s behaviour, but this can be a combination of:

• displaying any or a combination of the indicators of harm
• a spike or change in gambling behaviour or patterns
• other information held, known or that could be inferred about the customer • records of previous interactions.

(2) Action

This is the act of interacting. How an operator interacts will depend on the circumstances, the product and environment. There is no one single method of interacting that will always be the best option. Considerations include:

• the method appropriate to the situation – this could be an automated or personalised email, pop up message, phone call, chat-room contact or face-to-face
• the ‘strength’ of interaction appropriate to the severity of the harmful behaviour – which could be anything between a brief intervention or break in play, through to the licensee taking direct action
• the type of information that the customer needs – this could include telling them what prompted the interaction, and options for providing help or support, such as:
  • advice or suggestions to help the customer manage their gambling, or to take a break from their gambling
  • recommendation of tools or signposting to support
  • taking direct action, such as when there are ongoing concerns but the customer does not take action themselves. This could include ceasing advertising, imposing limits, suspending accounts until the customer engages, increasing visibility or promoting gambling management tools.

(3) Outcome

There will not always be a clear outcome to each interaction, and sometimes the first interaction will be all that is needed to draw the customer’s attention to what could develop into harmful gambling. In some cases, further monitoring of the customer’s gambling may be needed to spot any change and identify early any further behaviours which could indicate an increased risk. This monitoring process can be manual or automated.

The customer interaction guidance builds on the above to provide further information and suggestions around interacting with customers who may be at risk of or experiencing harms associated with gambling.

3  Evaluate

In more recent discussions about customer interaction, we have referred to the importance of evaluation, by which we mean understanding the impact of the interaction on the customer and the effectiveness of the licensee’s approach to interaction.

Evaluation means finding out whether something works, which in turn will help improve methods for identifying and interacting with customers.

Understanding the impact of individual interactions

Understanding the impact of the interaction on the customer includes being able to look at and compare:

• the behaviour before the interaction
• the change in behaviour or prompt for the interaction
• how the operator interacted and what was said or done, and
• what happened next.

By ‘impact of the interaction on the customer’, we are referring to a change in the customer’s gambling activity or behaviours which could be attributed to the interaction. Not every customer who receives an interaction will require active follow up, but some will. How the licensee makes that distinction should be proportionate to the severity of the harm being displayed, in order to minimise the risk of further harm.

Keeping records is an essential part of evaluation. Good record-keeping which captures the above, including where an interaction was prompted but did not take place, will help the licensee to consider whether the interactions have had a positive impact on the individual customer’s behaviour, to track over time whether the customer has responded to the interactions, and help to guide decisions about future interactions with that customer. Good record keeping allows operators to demonstrate when and why they have interacted with customers.

Evaluating the effectiveness of the approach

Records of interactions can also provide useful evidence of what types of indicators, methods of interacting and options for support work well for customers. They help the licensee to inform an evaluation of the effectiveness of its overall approach to customer interaction. Good evaluation enables operators to understand which aspects of their approach are the most effective at identifying the right customers, the forms or methods of communication that appear to resonate best with customers, and the types of tools or support that work well to help customers manage their gambling in a way that works for them.

As part of evaluating the effectiveness of their approach, operators should also understand what the prevalence of at-risk gambling is among their customer base. A starting point is the combined health surveys of England, Scotland and Wales. It should be noted however that rates will vary significantly between geographical areas and localities, for example with problem gambling rates in urban areas being higher than rural areas (see the Problem gambling in Leeds report as an example) and that when looking at the potential percentage of at-risk or problem gamblers within the customer base, operators should consider the percentage of gamblers, and not the percentage of the adult population.

Gambling operators submit data on the numbers of customer interactions and the numbers of customers who received an interaction, as part of regulatory returns. This is currently the only quantitative measure of whether operators are identifying and interacting with customers who may be experiencing harms associated with gambling. An analysis of this data suggests that some operators misunderstand or misinterpret the purpose of these fields, so the data is not completely reliable. Recently, the Commission has clarified the definitions in regulatory returns and issued guidance on customer interaction for remote gambling operators, which should go some way to addressing some of the data quality issues.

The Commission will continue to use regulatory returns to measure the levels of customer interactions taking place across all operators, but setting data quality aside, the numbers of interactions alone cannot tell us whether those interactions are with the right people or are having a positive impact on the individual customer’s gambling. This is why we need better evaluation.

The customer interaction guidance builds on the above to provide further information and suggestions around evaluating the impact of interactions and the overall approach to customer interaction.

Insofar as LCCP Ordinary code provision 3.4.2 is concerned, the Commission proposes to remove all three parts of it. Its rationale for this is as set out below:

OCP 3.4.2 1

We propose to remove OCP 3.4.2 1 – Operators should work together to share experience and deliver good practice across the full range of social responsibility requirements for customer interaction.

Recently, we have seen progress being made by the industry to work collaboratively to share their own practices, facilitated by the Commission or the industry itself. In the last 12 months in particular, more and more gambling businesses have worked together on a shared understanding of what gambling harms looks like, how these can manifest in their customers’ behaviours, and ways to interact effectively with those customers to reduce the risk of harm.

In particular, this collaboration has become apparent through Remote Gambling Association workshops on behavioural analytics, collaborative working at our Raising Standards conferences, and our recent co-creation workshop with operators looking at the use of customer data to identify harmful play.

The new national strategy to reduce gambling harms will include specific priorities for collaboration by gambling businesses on trialling and evaluating approaches for player protection. The strategy will be launched in April 2019.

OCP 3.4.2 2

We propose to remove 3.4.2 2 – Operators should keep a record of customer interactions, and where an interaction has been ruled out, the reasons for this. Where an interaction has taken place at a later date, this should also be recorded.

However, this does not mean that the need to record interactions is no longer necessary. We propose to include the necessity of accurate record-keeping, including where an interaction has not taken place, as part of the guidance. This is because there will be occasions when a customer displays behaviours which would ordinarily prompt a customer interaction, but it is not possible for staff to carry it out. In these situations, it is important that the behaviour is recorded, to inform staff and enable them to either carry out an interaction when possible, or to help establish a pattern of behaviour to help decide whether an interaction should take place.

OCP 3.4.2 3

We propose to remove 3.4.2 3 – In providing training to staff on their responsibilities for customer interaction, licensees should have, as a minimum, policies for induction training and refresher training.

We think that effective policies and procedures for staff training, including induction training and refresher training, are an essential factor in being able to meet the outcomes and should be inherent in each operator’s approach. Therefore, we think that including this requirement as an ordinary code provision is unnecessary.

If you require advice on:

• how these proposed changes might affect your business (including your social responsibility policies & procedures and the potential effect of such changes on your AML/CTF policies & procedures) and/or
• what you need to do to (a) respond to the consultation or (b) plan for implementation of the proposed changes,

please contact us. We will be pleased to help.