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The UK Gambling Commission’s pilot of financial risk assessments has reached a new stage, with the regulator estimating that only one in 1,000 online gambling accounts would encounter “friction” if its test environment were made live.
Since September 2024, several of the UK’s largest gambling operators have been working with the commission to test a system that would allow high-spending gamblers in financial distress to be effectively screened.
The project was mandated by the government’s 2023 white paper, which also said that the process should be “frictionless” for the vast majority of those checked.
Now, through two parts of the three-stage pilot, the commission claims it is exceeding the white paper’s initial goal, which established that 80 percent of those checked should be unaware that an assessment is taking place.
The pilot pairs operator data with checks run by credit reference agencies. A report, much like a credit check, is then returned to an operator who will be required to intervene if it shows a risk of harm.
Around 1.7m assessments relating to 860,000 accounts were conducted during stage two of the test, with 97 percent of those “possible in a frictionless manner”, according to the commission's update on May 21.
That number only represents accounts that have been referred for an assessment in the first place, leading to estimates by the commission that only 0.1 percent of all gambling accounts in the UK would face requests for additional documents to properly assess their gambling spending.
Stage three of the pilot began earlier this year and is focused on how to address inconsistencies between the various credit reference agencies used to conduct the checks.
The commission said that the different agencies returned different data, sometimes with more or less detail, and it was working with operators to help them interpret these discrepancies.
The data-sharing portion of this stage was completed in late April, the commission said, with the regulator expected to complete its analysis in the summer.
“These further findings from the pilot have helped us understand the extent to which assessments could be conducted in a frictionless manner,” said Helen Rhodes, director of major policy projects at the commission.
“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,” she said.
The outcome of stage three will help the commission determine how operators can embed the financial risk assessments into their customer interaction processes, she said.
Whether customers will react negatively to the presence of these assessments remains a key concern of the industry, particularly the racing sector, which has led a concerted campaign against the project.
Opponents of the assessments and affordability checks currently conducted by operators claim that many gamblers, particularly those who spend large amounts, are unwilling to provide personal financial information and will instead move their gambling offshore.
Even if the tests can be conducted largely without friction, it remains a key question precisely how customers would be prompted to give their permission for credit reference agency checks on their personal financial information and whether those at higher risk of gambling harm are willing to agree.
The commission has also been at pains to try and distinguish the proposed risk assessments from so-called affordability checks.
Its pilot provides a way of “identifying high-spending remote gambling customers who may be in financial difficulties”, rather than trying to establish if a customer can afford their gambling spending, the commission says.
“We do not have any regulatory requirements for affordability checks and are not proposing any,” said Rhodes.
But some legal experts dispute this statement and argue that other guidance by the regulator is contradictory.
“To avoid any further confusion on this topic, the commission should formally retract previous statements made, particularly those in its 2019/20 enforcement report such as that ‘individuals have funded their gambling without satisfactory affordability checks and appropriate evidence being obtained’ and ‘customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger’,” said Melanie Ellis, a partner at Northridge Law.
“In more recent compliance assessments, the commission appears finally to have moved away from asking for evidence of appropriate affordability checks, but there remains a huge amount of confusion about what the regulator’s expectations are,” she said.
Affordability checks were introduced in the Netherlands in October of last year and have proved highly controversial, with data suggesting they may be driving gambling revenue to the black market.
