September 15, 2023
As many of you will be aware, and following the publication of the White Paper earlier this year, the Gambling Commission has proposed a new Social Responsibility (SR) Code 5.1.12 which will impose stricter rules on how operators can conduct direct marketing.
This new proposal is open for consultation until October 18th and you can access it here.
The new 5.1.12, in essence, requires that all operators must collect consent in order to carry out direct marketing and that this consent should be broken down by channel (email, SMS, push notification, social media direct messages, post, phone call, other) as well as by product (betting, casino, bingo, lottery).
The changes, following on from the White Paper, are aimed to reduce harm that can be caused to at-risk customers who receive repeated marketing messages. Whilst the intention behind the changes is well-intended, the execution does raise some questions which we feel operators would be remiss in not raising in response to the consultation. Most notably, the Gambling Commission seems to have taken upon itself to disapply the ‘soft opt-in’ rule to the gambling sector.
For those that are not aware, electronic marketing is governed in the UK by the Privacy and Electronic Communications Regulations 2003 (PECR) and PECR is derived from European Directive 2002/58/EC. PECR, and the corresponding European Directive, require those sending unsolicited electronic direct marketing to obtain consent, save where ‘soft opt-in’ applies. ‘Soft opt-in’ (which confusingly is actually an opt-out mechanism) is an exception to consent and provides a limited mechanism for companies to send direct marketing to new customers on an opt-out basis. The restrictions are that the marketing must relate only to identical or similar goods / services; that an opt-out was provided at the time that contact details were collected; and that an opt-out (or unsubscribe) is including in all direct marketing communications thereafter.
Furthermore, ‘soft opt-in’ is actually recognised in Recital 47 of the UK and EU GDPR which states: “the processing of personal data for direct marketing purposes may be regarded as carried out for a legitimate interest” (noting that legitimate interests is an alternative to consent). Recital 70 of the UK and EU GDPR also makes it clear that people should have the right to object to direct marketing at the initial and further processing of personal data – effectively requiring an opt-out at the point of registration and an unsubscribe in marketing communications thereafter.
The effect of the new SR Code 5.1.12 – as well as requiring a matrix of 28 opt-in boxes – is to remove the ‘soft opt-in’ option from the gambling industry. This means that gambling, unlike any other commercial sector, will not be able to utilise a method of sending direct electronic marketing to customers who are likely interested in receiving such marketing. It is a bold move by the Gambling Commission, but not one that appears to be particularly fair. Perhaps most notable, is that the Gambling Commission has not even provided an explanation as to why a marketing mechanism enshrined in law (twice) should not apply to the gambling industry.
It seems to us that the Gambling Commission should explain to operators why ‘soft opt-in’ will no longer be permitted.
We understand that the Gambling Commission is seeking to bring clarity and consistency to the complex world of marketing in the gambling sector – where cross channel and cross-brand marketing rules can be extremely difficult to follow – but the current proposals go too far.
Compliance with electronic direct marketing is already regulated by the ICO – actively, we should add – and it unnecessary for a second regulator to step into the ICO’s shoes and to change well established laws and guidance.
The good news for operators who wish to challenge the removal of ‘soft opt-in’ is that it is not too late. The consultation is open until 18th October and, as we saw with the consultation on the Gambling Commission’s guidance to Requirement 11 of SR Code 3.4.3, the Gambling Commission does take responses to consultations seriously.
We would recommend that operators quickly review the proposals for SR Code 5.1.12 and submit commentary as soon as possible – and by all means please do get in touch if you’d like any assistance in your submissions.
Thanks for reading.