Gambling Commission to Introduce Financial Risk Assessments for High-Spending Customers

This has been one of the most controversial elements of the White Paper published in April 2023 and has been met with pretty much universal opposition by the remote industry. 

The changes were designed to help identify customers experiencing financial difficulties while reducing the need for intrusive affordability checks and document requests that have proved controversial for both consumers and operators. 

The Commission's decision follows an extended period of consultation, stakeholder engagement and piloting but the Betting and Gaming Council has highlighted that the results of credit reference checks as part of the pilot have proved to be inconsistent. According to the regulator, evidence suggests that some high-spending customers are more likely to be experiencing financial stress than the general population but are not currently being identified or supported by gambling businesses. 

As a result, vulnerable consumers may continue to receive gambling promotions and marketing despite experiencing financial difficulties. 

Under the new regime, with a staged implementation, FRAs will be conducted using information supplied by credit reference agencies. The Commission argues that these assessments will be "frictionless" for most customers, requiring no document submission and having no impact on an individual's credit score. The Commission views the approach as a more proportionate means of identifying potential financial vulnerability than some of the existing processes currently operated by gambling operators. 

Importantly, the vast majority of gambling customers are unlikely ever to be subject to an FRA. The Commission has stressed that occasional bettors, recent winners and many regular customers who spend hundreds of pounds gambling will typically fall below the relevant thresholds. 

Pilot findings indicated that around 97% of customers spending above the specified thresholds could be assessed automatically and without additional intervention, significantly exceeding earlier expectations. 

The first phase of implementation will apply only to the largest operators and will focus on customers exhibiting exceptionally high spending patterns. 

Operators must carry out Financial Risk Assessments when customers reach the following thresholds, as set out in the Commission’s published announcement:

Over time, the thresholds will reduce as the framework matures. 

The Commission has also indicated that it will adopt a cautious regulatory approach during the early stages of implementation. While operators will remain subject to existing licence conditions and social responsibility obligations, the regulator has confirmed that it will not initially take enforcement action solely because an operator fails to act following the outcome of an FRA.

Industry Commentary

The Betting and Gaming Council (“BGC”) issued a press release following the Commission’s announcement.

The BGC’s response was strongly critical of the Commission’s approach. It argued that the decision to delay implementation, increase the initial thresholds and move away from the original timetable reflected the force of concerns previously raised by the industry and others. However, the BGC maintained that important questions remain unanswered, particularly around the reliability of the proposed checks, their impact on customers and how they will operate in practice.

The BGC also highlighted what it sees as continuing shortcomings in the evidence base for the regime. In particular, it suggested that the Commission has not yet shown that the data underpinning financial risk assessments is sufficiently accurate, consistent or dependable to support decisions that may affect individual customers.

The BGC further noted that the Commission has not published a full evaluation of its pilot, meaning that operators and the wider public have not yet seen the full evidence relied on to justify the introduction of the checks.

What this means in practice

For gambling operators, it appears the Commission’s announcement was aiming to provide greater clarity on how financial vulnerability assessments will be incorporated into the customer protection framework. The phased approach potentially offers businesses additional time to develop systems, governance processes and customer interventions before the lower thresholds take effect.

For consumers, the reforms may reduce the number of requests for bank statements, payslips and other financial documents that have attracted criticism in recent years. At the same time, the Commission hopes the new model will enable operators to identify and support genuinely vulnerable customers more effectively.