SBC News Voice of the Sports Betting Industry
For the past two years, affordability checks have cast a long shadow over the UK gambling industry, with many stakeholders uneasy about the potential impact such measures could have.
With the publication of the Gambling Act review White Paper last week came clarity on a number of issues, including affordability with the introduction of ‘finance risk checks’ for online gambling.
In the aftermath of the regulatory changes, a range of stakeholders issued responses, including operators and harm treatment/minimisation organisations, but payments specialists and legal experts have also had their say.
Poppleston Allen – reading the small print
From the outset, the White Paper does not appear to have implemented checks as strict as some stakeholders feared, adopting initial checks at losses of £125 in a month and £500 in a year, with a higher threshold of £1,000 in single day losses and £2,000 within 90 days.
Keeping track of these differences will be of paramount importance for operators, however, argued Nick Arron, Lead Partner in Popplestone Allen’s Betting and Gaming team.
Notably, the two thresholds are intercut with a recommendation that enhanced checks should be halved for bettors aged between 18 and 24, due to this group being perceived as being at higher risk of harm.
Arron wrote: “While many in the industry are concerned about the introduction of affordability checks, operators are already carrying out spending checks as part of their social responsibility efforts and mandatory enhanced checks will level the playing field and remove the competitive disadvantage for operators using them when they are not mandatory.
“However, there are risks to the industry. There is significant evidence that affordability checks deter some customers and it seems reasonable to conclude that some customers will migrate to the black market if they feel enhanced check assessments are overly intrusive.
“On the contrary, there is also evidence that customers are getting used to being asked for their personal documents, and are beginning to understand why operators are required to ask for these.”
The UK Gambling Commission (UKGC) has been taking its enforcement duties seriously over the past year, handing out multi-million penalties to the likes of Entain and William Hill, and its CEO Andrew Rhodes and Head of Policy Ian Angus have made it clear that this approach will continue.
Operators could, therefore, be wary of the new finance risk checks and ensure they keep up to speed with new requirements to avoid fines.
On the other hand, from a player engagement basis, Popplestone Allen noted that the £125/£500 checks are expected to impact around only 20% of players, and the enhanced £1,000/£2,000 checks fewer than 5%.
Vasilije Lekovic – operators may need to up their game
Likewise, Vasilije Lekovic, VP of Gaming at Trustly, observed that the proposed finance risk checks may require operators to adopt ‘new processes or systems to ensure compliance’ with new regulations.
However, he added that ‘the long-term benefits of prioritising player safety are clear’ – clarity being one of the main benefits of the review in the eyes of many stakeholders, as the industry now has some sense of direction moving forward.
Lekovic continued: “Open Banking is an optimal way to make affordability checks as it provides access to real-time financial data that enables operators to conduct checks efficiently, accurately, and with minimal intrusion.
“This approach ensures a seamless user experience, promoting player safety while maintaining a sustainable and positive gaming experience.
“Trustly has built an AIS Open Banking product for the UK market to help operators meet the requirements outlined in the Whitepaper. We are committed to working together with operators and regulators to drive a safer and more responsible gambling market.”
Charles Cohen – a new role for Department of Trust
Speaking to SBC earlier this year, Charles Cohen, Founder and CEO of the Department of Trust, a provider of financial KYC solutions to the gambling industry, emphasised that the gambling industry would do well to keep track of affordability developments.
On the proposals, Cohen remarked: “The Department of Trust helps leading gambling operators make frictionless, instant checks on the true financial well-being of customers thanks to Open Banking.
“Services like this must form a key part of the new framework for assessing financial risk on more customers if the policy goals are to be met in the interests of players and operators alike.”
