The UK Gambling Commission (UKGC) has provided an update on affordability checks as the regulator prepares to launch a six-month project into financial risk assessments.
The Commission announced on May 1, 2024, that it would consider launching a draft of its frictionless “light touch” financial risk assessments starting August 30, next Friday.
UKGC wants to identify gambling addicts
A four-step plan was initiated by the UKGC in May, with the hope of adopting regulatory changes that will affect “remote gaming projects, direct marketing terms and conditions, light financial vulnerability checks and more stringent processes to support age checks at premises ”.
Once launched, the project will run for six months to enforce light financial vulnerability checks with an initial limit on customer deposits of £500 per month. Subsequently, the project aims to reduce the deposit limit to £150 per month by 28 February 2025.
This value will be a mandatory limit for accessibility checks to be applied by online operators to protect players from significant financial losses.
Ahead of the launch of the project, Helen Rhodes, Director of Major Policy Projects and Assessments at the UKGC, reaffirmed that the aim is to test the feasibility of introducing risk assessments to identify and support high-spending and financially struggling online gaming customers, with minimal impact on recreational customers.
The project is being carried out with credit agencies and online betting operators to examine the potential impacts of deposit limits on customers, where “assessments are not being implemented in a real-world environment”.
“We want to address cases where customers have been able to bet large amounts without any verification or support, when this was later found to have caused significant damage,” continued Rhodes.
Project will prioritize the identification of high-risk accounts
To address these challenges, the project will prioritize identifying high-risk accounts, with the UKGC hoping to test “how operators can receive limited information to understand the severity of these financial difficulties in order to take action to support the customer”.
Rhodes added: “This would allow operators in the future to analyze other indicators of harm and adapt customer support, from reducing marketing, encouraging the use of deposit limits, to disrupting customer relationships. When no financial difficulties are identified, the operator will not need to take any action.”
Pillars of the initiative
The main pillars of the project criteria include accessibility checks that will be evaluated in terms of efficiency. Because the regulator intends to determine the number of players who will carry out a financial risk assessment without problems.
In the Gambling Act Review White Paper, the UKGC estimated at around 80% the number of gamblers who will undergo a planned financial risk assessment without any problems.
Rhodes’ statement said: “If thresholds were set in line with those proposed in the consultation, this would mean approximately 3% of accounts would be verified. We are testing whether 80% or more of this small proportion being checked would be frictionless.”
Therefore, a second criterion will assess the speed and efficiency of credit reference agencies in processing assessments and returning results to operators.
Under the “relevance and accuracy of data” pillar, the UKGC will assess whether credit references provide effective evidence of financial vulnerability compared to other data sources.
The assessment will be completed by a final assessment on technical implementation. Accessibility data that can be better presented to operators and then implemented in customer interaction processes will be considered.
The Commission suggested that the project be accompanied by broader research into:
- Accessibility checks
- Evidence and feedback from stakeholders
Therefore, if the measure is successful, it could lead to the implementation of mandatory financial risk assessments.
