SBC News Voice of the Sports Betting Industry
The UK Gambling Commission (UKGC) has reiterated that finance risk checks’ should not be considered ‘affordability checks’ as it prepares to take the pilot of the measures to the next stage.
Introduced as one of the flagship measures of the review into the 2005 Gambling Act, financial risk checks are intended as a more targeted version of ‘affordability checks’ and a means to ensure betting customers are spending within limits.
The Commission has been conducting a four phase pilot of finance risk checks since September 2024 with the aim of ensuring the checks can be as frictionless as possible, that it uses data correctly and all implementation issues are addressed.
This pilot is now in its third stage, which is in turn at the reporting stage, having concluded the data sharing element on 30 April.
The UKGC hopes that analysis conducted now can improve how finance risk checks are targeted, how what it calls ‘unnecessary inconsistency’ between credit reference agencies can be reduced, and how operators can be supported with future implementation.
As stated above, the UKGC is keen to emphasise that finance risk checks are not a form of ‘affordability check’. This term became a divisive phrase during the Gambling Act review, with betting stakeholders protesting that such a measure would severely impact the industry’s bottom line.
This fear was in turn shared by the sport of horse racing, which is heavily dependent on bookmakers for financial support via an annual levy – something stakeholders were worried an affordability check-induced drop in bookie revenue would impact.
“Financial risk assessments are a proposed way of identifying high-spending remote gambling customers who may be in financial difficulties, in order to help support them,” the UKGC’s latest update on the finance risk check pilot reads.
“This is not the same as “affordability checks” – the Commission does not have any regulatory 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. They would not affect a customer’s credit score if they were introduced in the future.”
But what has the UKGC learned from its pilot so far?
The regulator asserts that the pilot has given it a better understanding about the financial risk profile who met the thresholds. These customers were found to be between twice and four times more likely to have a debt management programme than those who didn’t meet the thresholds, and more between twice and five times more likely to have a default in the last 12 months.
Perhaps most significant is the fact that the data has reinforced the Commission’s view that the finance risk checks will be as non-intrusive and frictionless as possible. According to the Commission’s estimations, only 0.1% of customers would be subject to a non-frictionless assessment, equating to one in every 1,000 customers for most operators.
It also concluded that 95% of assessments carried out in stage one were possible in a frictionless matter, with this figure rising to 97% in stage two, where the total number of risk assessments carried out across three credit reference agencies rose from 860,000 to 1.7 million.
The analysis phase of stage three of the pilot is expected to continue into the summer, after which the Commission will move into stage four.
This will examine one of the more pressing matters for operators – possible implementation issues such as how the measures can be built into the overall customer interaction process, a make or break moment for the future of this flagship White Paper proposal.
Commission Director of Major Policy Projects, Helen Rhodes, said: “These further findings from the pilot have helped us understand the extent that assessments could be conducted in a frictionless manner.
“Building on our staged approach to the pilot, we will now further explore data consistency across credit reference agencies, as well as how to support operators to identify the severity of financial difficulties that a customer may be experiencing and how they could support these customers.”
