Roger Redfearn-Tyrzyk, VP Global Gaming at IDnow provides a perspective on consumer changes and likely adjustments once the UKGC finalises its consultations on compliance and standards governing UK gambling.
Almost half (44 per cent) of UK adults have gambled at least once in 2023, with around 14 million active online gamblers in the country. The number of UK adults who gamble has been on the rise in the last few years: for comparison, the UK had around 10 million active online gamblers in April 2020.
Considering this increase, and the startling numbers of problem gamblers – estimated to sit somewhere around 300,000 in the UK – for the first time, the government will mandate operators to conduct financial risk checks on their players and overhaul the approach to responsible gambling.
But what will this mean for players? To answer this, we need to look more closely at the four areas that the United Kingdom Gambling Commission (UKGC), an executive department of the UK government, is currently investigating within its latest consultation:
- Remote game design: The UKGC is proposing a five-second minimum game speed (per spin), removing features that can speed up play and removing features that may mislead consumers or create dissociation from awareness of play. For players, this means that some games will slow down somewhat.
- Strengthening in-person age verification: Betting shop staff may be required to check the age of any customer who appears to be under 25, rather than 21. Younger players will therefore need to be prepared to show valid ID documents.
- Improving customer control over advertising: The UKGC is proposing to give players more control over the direct gambling marketing they wish to receive via opt-ins, selected product types, and channels. As a result, players would be receiving fewer marketing materials – and only on their preferred channels.
- Financial risk and financial vulnerability: This area is perhaps the major cause of anxiety within the UKGC consultation, which is proposing financial risk and vulnerability checks be conducted at £125 net loss within a 30-day period, or £500 within a rolling-year period. Additionally, many licensees are rowing back from offering VIP or loyalty clubs at online casinos, as these are inherently designed to reward customers who spend large sums of money. Stake limits will be introduced, consulting on a limit ranging from £2 to £15 per spin. Greater protections have also been considered for players aged 18 to 24 years, a group that the UKGC considers to be more vulnerable to problem gambling.
It is worth mentioning that several larger gambling operators already perform some of these checks, at onboarding or during the customer journey.
The role of financial risk assessments
The second financial risk check that is much talked about is referred to as a financial risk assessment. This will be trigged ‘at unusually high loss levels where it seems proportionate to understand more about the potential risk of harm’, according to the UKGC. These assessments will come from credit reference agency data and will kick in at losses of more than £1,000 within 24 hours, or £2,000 within 90 days.
According to the UKGC, all these checks would be proportionate and would only affect the high spending and high losing players. UKGC estimations show that so-called ‘light touch financial vulnerability checks’ would be carried out on 20 per cent of accounts with only three per cent of players undergoing more in-depth financial risk assessments. What’s more, just a tenth of that three per cent – in other words 0.3 per cent of players – would be asked to provide additional financial information. For the significant majority of players (99.7 per cent), frictionless data checks would be sufficient.
However, this may look different in practice. By my calculations, the realistic number of total players would be more around 40 to 50 per cent. Of course, data checks will help here, but with an expected success rate of 70 per cent, it would still leave a lot of work for operators, as they will have to collect pay-slips or bank statements, for example – checks that are cumbersome and quite intrusive.
This again comes back to the old conversation of expecting operators to know information related to data that they simply do not possess. I believe the responsibility should lie with the financial institutions to allow for better financial checks for the iGaming industry.
Overall, the research and consultation process conducted by the UKGC is set to examine how players respond to different gambling-related activities and the associated potential hazards, the adverse impacts of gambling and the elements contributing to player vulnerability.
By determining these elements, the UKGC is hoping to create effective strategies for operators that will potentially protect vulnerable individuals and provide more opportunities to make genuine progress toward making gambling in the UK fairer, safer, and free from crime. Time will only tell in understanding how effective this will be…
Roger Redfearn-Tyrzyk, VP Global Gaming @ IDnow