Betting and Gaming Council (BGC) and British Horseracing Authority (BHA) express disappointment as high-spending gamblers in the United Kingdom face financial risk assessments
Britain’s Gambling Commission has decided on a staged approach to introducing financial risk assessments to identify and support high-spending customers in financial difficulties.
Following extensive consultation, engagement with stakeholders and piloting, the regulator said that financial risk assessments will provide operators with a “new, more effective and proportionate way” of identifying customers in significant financial difficulty.
This will reduce reliance on the document checks that some operators currently use to seek to identify financial risk and that are unpopular with many customers.
“There is evidence that some high-spending gambling customers are experiencing current financial difficulties but are not being identified or supported by gambling businesses,” said the Commission. “High-spending customers are between two and four times more likely to have a debt management plan and between two and five times more likely to have a default in the previous 12 months than consumers in the wider population.
“Without being identified, they may continue to receive marketing and promotional offers encouraging further gambling despite being financially vulnerable.”
According to the regulator, the vast majority of customers will never require a financial risk assessment, which means people who place an occasional bet, are a recent winning customer, or even regularly spends hundreds of pounds, would be unlikely to need a check.
The pilot showed that 97 per cent of those spending above the threshold levels could be easily and frictionlessly assessed for financial difficulties – significantly higher than the 80 per cent estimated in the 2023 White Paper.
This means that less than 3 per cent of accounts would have an assessment and less than 1 in 1,000 accounts would be unable to get one. For those 1 in a 1,000 accounts, operators will have to verify identity properly and may have to assess financial risk through other means such as open banking or requesting documents.
The first stage of implementation will see financial risk assessments carried out by the largest operators, where there is high spend of multiple thousands of pounds over a 24-hour period.
For most, this means £5,000 net deposit in a rolling 24-hour period, which the Commission said is a “very unusually high spend pattern” that less than 0.5 per cent of customers exceed.
The Commission will continue working with gambling businesses, credit reference agencies and other stakeholders to refine the assessments, develop guidance and support proportionate implementation.
During the early stages of implementation, no enforcement action will be taken on a failure to act following a financial risk assessment, though operators are still subject to all other existing licence requirements which must be met.
The Commission will confirm the timetable for stage one following engagement with industry and other stakeholders through implementation groups being established over the summer.
Once fully implemented in due course, financial risk assessments will be applied to customers aged 25 years or older with net deposits exceeding £1,000 in a rolling 24-hour period or £3,000 over a rolling 90-day period; for those under 25 these thresholds will be reduced to £750 in a rolling 24 hours or £2,000 in a rolling 90 days.
“We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk,” said Sarah Gardner, acting CEO of the Gambling Commission.
“We have listened to feedback throughout the pilot process which has led to us deciding to carefully proceed. We will work with key partners to make sure that they are implemented in the most effective way for consumers and operators.”
Gambling Minister Baroness Twycross said: “I welcome the Gambling Commission’s decision to implement financial risk assessments in a careful, phased way. Attention must now turn to successful implementation, so that financial risk assessments work for consumers, gambling operators and the wider ecosystem.
“The right balance must be struck so that assessments protect those in financial difficulties from the risk of gambling-related harm but do not create unnecessary burdens for the industry or consumers.”
British trade body, the Betting and Gaming Council (BGC), said it was “deeply disappointed and frustrated” that the Commission has decided to press ahead with financial risk assessments despite the significant concerns raised over the last 18 months by the BGC, operators, racing, parliamentarians and customers.
“The fact that the Gambling Commission has delayed implementation, raised thresholds and abandoned its original timetable is a clear recognition that the concerns raised by the BGC and others were well founded,” said BGC CEO Grainne Hurst. “Unfortunately, the central issues around reliability, consumer impact and the practical operation of these checks remain unresolved.
“The Commission has failed to address the fundamental issues identified during its own pilot. It has not demonstrated that the data underpinning these checks is accurate, reliable or consistent enough to support regulatory decisions affecting customers.”
Hurst said that the pilot exposed inconsistencies in the information returned by credit reference agencies, with the same customer potentially receiving different outcomes depending on the provider.
“Customers risk being wrongly identified as financially vulnerable based on a system that remains unproven,” she continued. “That is not a sound basis for regulatory intervention. The Commission has yet to publish a full evaluation of the pilot, so neither the industry nor the public has seen the evidence needed to justify introducing these checks.
“These checks cannot be described as genuinely frictionless if they produce unreliable outcomes, lead to unnecessary account restrictions or ultimately result in customers being asked to provide documents or open banking information. While the Commission has announced implementation groups, it has given no indication that they will resolve the outstanding questions around reliability, consumer impact and how the system will operate in practice.”
Hurst added: “We support evidence-led, proportionate regulation that protects vulnerable people while allowing the 22.5 million adults in Britain who bet each month to do so safely. But until the Commission can demonstrate these checks are accurate, consistent and genuinely frictionless, our fundamental concerns remain, including the risk of driving customers towards the growing illegal gambling market.”
These sentiments were backed up by the British Horseracing Authority (BHA).
“We are hugely disappointed that the Gambling Commission will implement affordability checks which will have severe financial implications for British racing and the UK economy and subject racing bettors to unwarranted levels of intrusion,” said BHA CEO Brant Dunshea. “Over a number of years, and through several consultations, British racing has engaged in a spirit of huge goodwill to honestly advise the Government about the potential impact this policy would have on our sport and its fanbase.
“These concerns were shared by the betting industry, politicians, campaigners and policy makers, who warned of devastating unintended consequences on two major industries that are worth billions of pounds to the UK economy and employ more than 200,000 people across Britain. We understand these checks have been proven by the Gambling Commission’s own pilot to not be ‘fully frictionless’ as originally promised by successive Government ministers.
“Rather than protecting consumers, these checks will have the opposite effect: driving more customers to the illegal market – which puts them at much greater risk of gambling-related harm – and starving the Treasury of much needed tax revenue.”
Dunshea said that for this decision to be taken unilaterally by the Gambling Commission shows “a clear abdication of duty” by the Department for Culture, Media and Sport (DCMS), which has failed to properly consider the damaging consequences of the decision.
“A policy decision of this magnitude needed to receive parliamentary scrutiny, especially when other policies from the 2023 Gambling White Paper were passed via legislative routes,” he continued. “Sadly, this is the latest in a long chain of events that shows how little the DCMS has done for the country’s second-favourite sport.
“This includes its failure to reform the Horserace Betting Levy, despite clear evidence that demonstrates British racing needs a higher annual yield to remain internationally competitive. This has all been at a time when we see other Governments around the world committing significant effort and resource to promoting their horseracing industries.
“Perhaps most concerningly, this policy has now been signed off for implementation without key stakeholders in racing and betting being able to see vital evidence such as the NatCen’s independent review of the pilot. Members of the implementation working groups – which the Gambling Commission are setting up in advance of the first stage of the checks being rolled out – will not even be privy to this evidence given that the Commission are not publishing its full consultation response on the pilot until the autumn.”
According to projections from the BGC, if the new thresholds are introduced, around 120,000 racing bettors could face enhanced affordability checks, which include requests for personal documentation such as P60s and pay slips.
Of those, around 96,000 are expected to refuse to provide financial documents, leading to significant reductions in betting turnover and an estimated loss of more than £13 million per year in Horserace Betting Levy receipts.
“We will now seek to work with the DCMS, the Gambling Commission and the betting industry to find ways to mitigate the worst impacts of this policy,” said Dunshea. “The former have repeatedly insisted that this policy, in light of the severe loss of turnover that British racing has already experienced due to ongoing document checks, will be better for our industry. It is very clear that, once implemented, an independent evaluation of this policy will be required to see whether that has indeed been the case.”