After various leaks, it is expected that the final white paper on legal compliance will address affordability checks in the gambling industry. The proposed system would involve two tiers of checks for operators. The first tier would be less intrusive and would involve checks on secondary sources such as County Court judgements. This tier would be triggered if a player reaches a spending threshold of £125 in a month or £500 over the course of a year.
The higher tier would involve a more detailed consideration of a customer’s financial position using tools like Open Banking. According to leaked documents, this tier would be triggered if a customer spends £1,000 in 24 hours or £2,000 in 90 days. New customers would also be subject to checks if they spend £500 in 24 hours in their first month or £1,000 in their first 90 days. Under-25s would be subject to the new customer triggers regardless of their length of time with an operator.
While there is some uncertainty about the exact details of the affordability checks, the speculation about their impact on UK punters is already causing concern. Some bettors feel that the introduction of these checks would deter them from continuing to participate in gambling activities. Others are skeptical about the need for intrusive financial inquiries, comparing it to asking for proof of funds and objecting to providing bank statements.
However, it’s important to note that the disquiet about affordability checks largely stems from actions already taken by operators in response to regulatory requirements. Recent measures around anti-money laundering, source of funds, and responsible gambling have already impacted operators’ revenues. A recent report commissioned by the Betting and Gaming Council (BGC) highlights the decline in online gross gambling yield (GGY) since mid-2021, attributing it to various factors including the introduction of affordability checks online.
It is worth clarifying that the checks mentioned in the report are not specifically affordability checks as they may be outlined in the forthcoming white paper. Instead, they are part of operators’ efforts to address previous failings and comply with existing regulations. The response from customers highlighted by the Racing Post is a reaction to checks that should have been implemented as part of the initial onboarding process.
There is currently a wide disparity in approaches to affordability checks among operators, likely influenced by their individual regulatory experiences. However, it is evident that checks of this nature have become a necessary part of conducting business in the UK gambling sector. The BGC’s cautionary statements about the potential impact of affordability checks may be seen as an overreaction, particularly considering the range of approaches already being explored, such as geo-affordability data, Credit Account Information Sharing (CAIS) data, and Current Account Turnover (CATO) data.
While the industry fears that the white paper may not provide enough guidance on making affordability checks less intrusive, companies in the verification sector are actively developing solutions to address this concern. It is important for all stakeholders to approach the implementation of affordability checks carefully, and relying solely on the Gambling Commission for guidance may not be the optimal outcome. However, it is counterproductive for the sector to engage in exaggerated rhetoric that suggests the sky is falling. The current voluntary checks have not resulted in the catastrophic scenario warned about by the BGC, and it would be unwise to insist otherwise. As the white paper is finalized, it is hoped that the debate around affordability checks in the UK gambling sector can be brought to a more productive conclusion.
