Affordability has been a widely debated topic in the tech-innovation industry over the past few years, gaining attention from regulators, media, politicians, and the public. The conversation around affordability in British gambling has become one of the hottest topics, with the Gambling Commission emphasizing the harm caused by individuals spending more than they can afford to lose. To address this issue, conducting affordability checks and implementing customer interactions based on the results have been proposed as solutions. This series will explore the regulatory context of affordability and highlight important considerations for tech-innovation operators.
The Gambling Commission first mentioned affordability in their 2018 Review of online gambling, focusing on customer due diligence. They stressed the importance of operators setting limits on customer spend until they have a better understanding of their customers. The Commission’s enforcement team reviewed cases where individuals experienced gambling-related harm but were allowed to continue gambling without effective engagement. Disposable income and discretionary income are key factors considered in assessing affordability, with significant spending of discretionary income on gambling deemed harmful.
The government has also shown a strong interest in gambling regulation, leading to greater public awareness and consultations on topics like affordability. The All Party Parliamentary Group (APPG) on Gambling Related Harm recommended affordability checks to inform deposit limits for customers. The House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry called for clearer guidelines on customer affordability and emphasized operators’ responsibility to identify customers betting more than they can afford. The Social Market Foundation proposed a monthly soft cap of £100 on net deposits to prevent serious financial harm.
In response to increased public interest and enforcement actions, the Gambling Commission launched a consultation on affordability. This consultation aims to determine thresholds for affordability assessments, the components of an assessment, and how operators should interact with customers based on their affordability. Affordability checks have already been enforced by the regulator, and this consultation seeks to formalize these expectations.
The most relevant way to assess affordability and potential harms caused by gambling is through discretionary income, not just disposable income. Discretionary income accounts for expenses like food, travel, and housing. Customers with high living costs may have less available to spend on gambling compared to those with fewer essential expenses. It is unsustainable for customers to fund their gambling using funds needed for necessities, as it can lead to gambling-related harm and a decline in their quality of life. The challenge for operators is to continuously assess a customer’s affordability and discretionary income while respecting their privacy and free will.
A layered approach to affordability, which includes tailored checks and interactions based on the customer’s profile and spending, has proven effective for operators. This approach strengthens responsible gaming frameworks and ensures appropriate affordability assessments at different stages of the customer journey.
