UK: Gambling Commission delays implementation of Social Responsibility Code Update on direct marketing by consent

The Gambling Commission of the UK has announced a delay in the implementation of an update to the Social Responsibility Code concerning direct marketing by consent. Originally set to take effect on January 17, 2025, the update will now be enforced from May 1, 2025. This decision follows concerns raised by operators regarding the clarity of the original wording of the new regulations.

The update, which is part of the Licence Conditions and Codes of Practice (LCCP), introduced a new requirement under paragraph six of the Social Responsibility Code section 5.1.12. The original wording suggested that gambling operators might need to deny service to customers until they set their marketing preferences, even if those customers had previously opted in.

This interpretation led to confusion and apprehension among licensees, who were unsure whether they could transfer existing customer preferences under the new regulations.

In response to these concerns, the Gambling Commission clarified that while marketing preferences can indeed be carried over, this is only permitted once a player has explicitly opted in to receive direct marketing for specific products and through designated channels, such as email or text.

For players who have not previously set their preferences, operators must provide an opportunity to update these settings upon their first login after the new regulations take effect on May 1, 2025.

The updated wording of paragraph six now states: "Existing customers who have not already opted out of marketing must be asked at their first log-in after commencement of this provision to confirm their marketing preferences if they have not done so already. Existing preferences can be copied over providing they match the format of this requirement."

This delay and clarification are significant for gambling operators, who must now prepare to comply with the new regulations by the revised deadline. Legal experts have warned that these changes could impact operators' bottom lines, as they will no longer be able to engage in cross-selling without explicit customer consent.

Richard Williams, a gambling lawyer at Keystone Law, noted: "Marketing restrictions are likely to hit operators’ bottom lines as they will no longer be able to cross-sell without actual consent."

The update follows a consultation launched by the Gambling Commission in May 2023, which was part of the broader Gambling Act review. This review, outlined in a white paper, identified the need for stricter requirements around obtaining consent for direct marketing, particularly in light of the potential risks associated with incentivizing players to engage with new gambling products through targeted marketing.

In addition to the Social Responsibility Code update, the Gambling Commission is also set to launch a pilot scheme for affordability checks on August 30, 2024. This pilot, part of the ongoing implementation of key elements of the Gambling Act review, will require operators to flag instances of debt or financial vulnerability among players.

The scheme will initially use historical customer data and will later incorporate live data, to determine the most effective methods for conducting these checks without directly intervening with consumers. The pilot is expected to run for up to seven months.