SBC News Voice of the Sports Betting Industry
The UK Gambling Commission (UKGC) has completed Stage-1 of its pilot on financial affordability risk checks, in which frictionless assessments have been carried out by credit agencies on the historic data of participating online operators.
An update on the Commission’s four-stage pilot was provided by Helen Rhodes, Director of Major Projects and Evaluations. The pilot, which began on 30 August, aims to evaluate the feasibility of applying financial risk assessments to help online operators identify high-risk customers.
The pilot runs separately from the White Paper proposal on light-touch affordability checks, which were implemented on 28 August at a £500 threshold on customer deposits, set to be reduced to £150 from 28 February 2025. As cited: “The Gambling Commission does not have any requirements for affordability checks and is not proposing any. Financial risk assessments would be a much more targeted way of identifying potentially financially vulnerable customers.”
The Commission maintains its timetable to complete the pilot by April 2025, viewing financial risk assessments as the most targeted method for identifying potentially financially vulnerable customers. Though preliminary findings of the pilot have been published, the Commission advises stakeholders not to make comparisons at this stage.
The pilot will be tested against four key criteria, structured as follows:
- Frictionless Process (Stage-1): How many high-spending customers could be assessed without disruptions
- Frictionless Process (Stage-2): How quickly can credit reference agencies return assessments?
- Data Relevance & Accuracy: How useful is credit reference data in assessing financial risk?
- Implementation Feasibility: How can operators integrate assessments into their processes?
Stage-1: Key Findings
Stage 1 of the pilot focused on a cohort of inactive customers, analysing historical data to assess the feasibility of financial risk assessments. The stage tested the accuracy of financial risk assessments provided by credit reference agencies, while also evaluating data quality, frictionless assessment rates, and implementation challenges.
Key considerations included testing how pilot participants prepared data for the credit reference agencies and how the data was returned to participants—a requirement for Stages 2 and 3 of the pilot. During Stage-1, the Commission conducted more than 530,000 assessments across three credit reference agencies for approximately 300,000 accounts within the relevant year.
Breakdown Frictionless Assessment Performance
95% of checks were conducted frictionlessly, as credit reference agencies successfully matched the provided data, enabling operators to receive automated feedback on accounts. Breakdown of frictionless checks:
- 92% of cases had a previous financial risk assessment available.
- 3% were classified as “thin files”, meaning the customer had no significant credit history or negative indicators.
- 5% of assessments failed, attributed to: Less than 1% due to data formatting errors from operators and 4% due to unmatched data, where credit reference agencies could not identify the customer.
Stage-1 findings highlighted the importance of data accuracy and consistency, emphasising the need for operators to improve data quality to minimise errors in assessments. Variations in reporting methods across credit reference agencies, such as differing interpretations of RAG (Red, Amber, Green) ratings, underscored the need for standardised definitions and timeframes to ensure more consistent and reliable reporting.
Onto Stage-2
The pilot moves onto Stage-2 to examine – “How quickly could credit reference agencies return a financial risk assessment?” Taking learning from Stage-1, the Commission considers addressing data formatting issues to enhance success rates and evaluating how financial risk assessments can be effectively integrated into real-time customer interactions.
Signing off the update, Helen Rhodes stated: “The pilot exercise is proving to be worthwhile in testing how financial risk assessments might work in practice and exploring practical implementation issues before final decisions are made. Taking a staged approach to the pilot means that issues identified in the first stage can be explored further, such as data consistency across credit reference agencies where appropriate and data accuracy from operators.”
“A key part of our work will also be to further support operators in considering how financial risk assessments could be combined with other indicators of harm, which gambling businesses already monitor, to support customers in the most frictionless manner possible.”
