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Changes afoot on Automated Self-Exclusion for Lotteries

Recently, I was approached by an External Lottery Manager (“ELM”) client who was concerned about one of the Gambling Commission’s (“GC”) changes to the social responsibility provisions of its Licence Conditions and Codes of Practice (“LCCP”). ELMs are the commercial partners of good causes who assist them in the administration of and promotion of their lottery and raffle schemes. They tend to have multiple charity clients.

The change that was troubling this client came into force on 31 October 2015. It took the form of a new Social Responsibility Code provision. Such provisions have the force of licence conditions and a breach of them by an operator may lead the GC to review the operator’s licence with a view to suspension, revocation or the imposition of a financial penalty and would also expose the operator to the risk of prosecution. The Code provision in question represents the introduction of a new requirement to enable customers to self-exclude by using a wholly automated process using remote communication, in addition to the method previously provided for, namely, contacting customer services.

The new Social Responsibility Code provision reads as follows:

“Customers must be given the opportunity to self-exclude by contacting customer services and in addition by entering an automated process using remote communication. In order to avoid inadvertent self-exclusion it is acceptable for an automated process to include an additional step that requires the customer to confirm that they wish to self-exclude. The licensee must ensure that all staff who are involved in direct customer service are aware of the self-exclusion system in place, and are able to direct that individual to an immediate point of contact with whom/which to complete that process.”

This new provision applies only to remote operators. My client was concerned because it helps a large number of charities run lotteries and raffles using remote communication. Its arrangement for enabling customers to self-exclude, which it provides to all its charity clients, involves placing information on their websites telling customers that it is possible to self-exclude but that, in order to do so, they must click on a link, and fill in a form requesting self-exclusion which they must then either post or email to the operator. I was asked to advise as to whether I thought that this process satisfies the requirements of a fully-automated self-exclusion procedure.

After considering the matter, I went back to the clients and advised that I was afraid that I didn’t believe that their current arrangements satisfy the Gambling Commission’s new requirement, but that I would take it up with the regulator. The rates of self-exclusion in the lotteries sector are very low indeed and in addition the new provision was, in my view, primarily addressed at remote gambling products that involve “instant win” or a high incidence of repetitive play. It is more targeted, for example, at online slot-machine-type games.

I discussed the matter with one of my contacts at the GC, who, in turn, sought the views of colleagues internally.

The new Code Provision is aimed at ensuring that customers can self-exclude in a simple and straightforward way, but does not detail the exact process that is required. However, the GC’s response confirmed my view that my client’s current arrangements would not be considered by the regulator as a fully-automated-process. However, the GC has now conceded that it is perhaps inappropriate to apply this new requirement to most remote lotteries. Its response stated:

The requirement was primarily aimed at remote gambling operators (including lottery operators) who offer on-line gambling via a website. However, given the way that most remote lotteries operate – simply receiving low-level, regular subscription payment details by telephone or email and that the take-up of self-exclusion in the lotteries sector is very low, it was possibly an error to have applied this provision to all lotteries.”

The GC now intends to seek internal approval which, if given, may lead to a consultation on the matter, in order to amend the LCCP to exempt remote lotteries which do not offer gambling via a website or do not offer on-line instant win lotteries or other types of remote lotteries involving repetitive play from this provision.   In the meantime, the GC has said that it would be “very unlikely” to take compliance action against an otherwise compliant lottery operator who did not offer gambling via a website or instant win lotteries and who had not made available a fully automated self-exclusion process.

This was a significant positive outcome for my client in that, given the number of its charitable clients using its current arrangements, significant work would have been required in order to revise them, had the GC so stipulated. This exercise, which involved being frank with the GC about my view that I did not believe (on a no-names basis, of course!) that the client’s current arrangements satisfied the strict letter of the Social Responsibility Code provision, has demonstrated that a constructive and collaborative approach with the regulator can, in appropriate cases, achieve positive results and, on this occasion, it may well result in a change in the law.