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Customer interactions and the current regulatory environment

February 2019

This article summarises a panel discussion at the annual CMS Gambling Conference 2019

Customer interactions with online gambling products is an area under increased scrutiny since the Gambling Commission’s guidance on the subject was released in February 2018 and in recent times the onus has been put on the operators to ensure compliance. The key regulations related to customer interactions are covered in the LCCP’s Social Responsibility Code, with further guidance in the Ordinary Code. While these regulations provide guidance, they do not set prescriptive rules on how customer interactions are to be dealt with. As a result, operators face particular uncertainty in regard to what constitutes an ‘effective measure’ and how to implement them – this is problematic when the costs associated with implementing new measures can have negative commercial consequences.

To assist operators in tackling some of this uncertainty, CMS’s Tamsin Blow took some time to identify the key principles that can be extrapolated from the regulations, which should be at the forefront of operators’ minds when implementing new policies and procedures. In particular, Tamsin noted that “social responsibility policy shouldn’t just give examples to staff of what issues there could be, it should give guidance on action for all potential eventualities... reporting needs to be used to identify patterns on a regular basis... and it is critical to record customer interactions.”

Adam Rivers, Associate Director of Economics at KPMG provides further insight into the factors that operators should consider when implementing new measures. For example, what demographic are the measures targeting, what age are they? What kind of game is the subject of the new measures, is it a regular gambling game or a more skill-based game? How does this affect the way we structure an interaction? Studies have shown that, for example “younger gamblers preferred information being pushed out to them that was about education and how they engaged with the site.” He added that “Older gamblers on the other hand, were more interested in specific measures such as limit setting.”

The discussion has also evolved to look at cognitive bias and how this affects customer interaction. “We know that consumers often don’t think rationally, they make these behavioural choices and have behavioural biases…the good news is these biases are systematic and lessons can be taken from these biases when we start thinking about how customers interact with businesses and how businesses incorporate them into their work.” These biases can be studied and the resulting data can be used to test what constitutes an effective customer interaction – especially with biases such as anchoring (influencing the customer’s decision making process by providing suggestions) or framing (influencing the customer’s decision by subtly changing the way certain information is presented to them).

Of course, studying and testing in regard to new measures can have a financial impact on an operator and can have unintended commercial consequences. Studies show that most regular gamblers will have an average of four to five online gambling accounts. Each has a low barrier to entry and customers are agile and have the ability to switch between accounts with relative ease. As a result testing new measures without a thought for the commercial element can lead to a fall in the player base. Not to mention that measures failing to comply with the Social Responsibility Code (mandatory for operators to comply with) can lead to severe financial penalties and even a licence review.

Going forward the most important thing for operators is to really look at their businesses and make implementing effective customer interactions a priority, with emphasis on establishing an effective strategy to remain compliant but also commercially competitive.

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CMS Gambling Conference
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