Affordability checks have long since been a key area of discussion across many regulated jurisdictions, with the UK certainly no exception, particularly after a review into the 2005 Gambling Act was initiated last year.

Earlier this year, the Gambling Commission asked stakeholders about the steps they believe remote operators should be required to take, in order to be able to identify and protect customers who may be at risk of harm. This could include customers spending increased amounts of monies within short periods of time or vulnerable customers being harmed by overspending within their monthly budgets. 

Following the long-running consultation, the Gambling Commission identified three key risks to be prioritised for action, including: significant losses over a short-time, significant losses over time, and financial vulnerability. 

However, following the DCMS’s direct involvement to lead the generational review of the UK’s gambling laws and standards, they have taken control from the UKGC, side-lining plans to conduct advanced affordability checks on all UK gamblers wagering over £100 a month. 

Pressed on whether the Gambling Commission had done the right thing in dropping proposed checks on affordability, Paul Foster, CEO at Crucial Compliance, revealed how there is a “common misinterpretation” on the matter. He explained that affordability checks have always been required on a risk-based approach which are linked to the requirement for source of funds used for gambling. 

He noted: “In this consultation the Commission was raising questions about the lower financial levels when affordability was required for those, primarily, on lower incomes. They linked this to the ONS data and as a result raised several red flags both in and out of the industry where the freedom of choice to spend customers’ own money could be brought into question. 

“Player protection must link all gambling related spend to affordability and responsibility”

“The industry is fully supportive of affordability and keeping crime out of gambling but believes in a risk and data driven solution based on third-party data.”

Foster revealed that the Commission had received a record amount of responses to the consultation with 10 times the average number of replies received. With the much broader spectrum of thoughts, he said that key questions were raised within their own organisation.

“These questions may have raised the complexity and legality of the lower-level affordability checks which meant the Commission has decided to stand back and continue to explore player protection as part of the holistic player journey and not just a set of generic triggers – which is where I believe the industry should be”, he explained. 

With the regulator now focusing on ways to prevent players from losing large sums, it no doubt raises the question as to whether or not it is a better way to protect players. Foster gave us his opinion, explaining that affordability is linked to actual spend and the responsibility around that spend. 

He continued: “If someone can afford it and wants to spend a large amount on gambling and can do it in a responsible manner, then this is not an issue. 

“I believe the focus on high spenders is more closely linked to the proceeds of crime act as most criminally obtained monies have been used by high value players in the past and the Commission has raised several operator investigations together with regulatory settlements around accepted criminal funds”

“Player protection must link all gambling related spend to affordability and responsibility if the regulation is to be effective, workable and successful”.

“Bespoke player protection systems are expensive to build but do carry major advantages over legacy adaptations”

Going further into detail on the challenges that could be brought on from an operator perspective, Foster acknowledged the expense and time needed to integrate innovative and technology led solutions to regulatory requirements. As an example, he mentioned that many companies have been developing a range of products from AI led algorithms to enhanced KYC systems which look at credit account turnover. 

He added: “Over time the cost of systems will reduce due to economies of scale on multiple operator implementation and the ease of implementation and integration through single APIs will also occur”.

“It is important for a clear link to be in place between suppliers and operators to be working in partnership with the player’s personal protection at the heart of the systems and processes.”

Foster’s advice on how operators can prepare for any enhanced affordability checks is to assess their current capabilities in the area and review against present and future expectations. He explained: “This will often mean the use of third-party specialists who can independently review their systems, processes and policies in a combined approach.

“Once these areas are known, a review of what is available on the market which can help them should take place. Of course, this approach can be costly and thus benefits larger operators. However, embedding a player protection system which can take multiple feeds will support a company through short and long-term goals. 

“This is where partnership comes in, as it is only through understanding the operator’s landscape including financial capability that an optimised solution can be built and implemented.”

He claimed that the way many companies are developing existing systems in order to carry out player protection functionality is a benefit for the industry, as it creates choice and keeps costs lower. 

He concluded: “Bespoke player protection systems are expensive to build but do carry major advantages over legacy adaptations. Companies need to consider why they are doing this and make a decision on their player protection partners. 

“Is this a regulatory compliance tick box process or are they really wanting to drive player safety and create a sustainable player base where customers use gambling as a form of entertainment?”