UKGC addresses gambling financial risk checks ‘misunderstandings’

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The UK Gambling Commission’s CEO Andrew Rhodes has published a blog post and video addressing the “misunderstandings around financial risk checks and what they really mean”, answering questions to “clarify the most frequent misconceptions”.

Rhodes noted that in the five weeks since the first consultations relating to the government’s Gambling Act review white paper, the UKGC has received over 1,500 responses and it continues to ask the industry for their viewpoint on gambling policy.

However, among the responses and commentary in the press and social media, the Commission stated that there was a “very high level of misunderstanding” about what the consultations say, specifically regarding financial risk checks.

In response, for the remaining six weeks of the consultation period, the UKGC has published a Q&A series to add clarity to the proposals and help “strike the right balance between the freedoms of people to gamble but also protecting people from harm”.

Highlighting the proposals, it was noted that they will bring frictionless financial risk assessments for an estimated three per cent of gambling accounts. These checks would take place primarily via a credit reference agency, with no impact on credit score, and if no risk is identified, a customer would continue with no further action.

The UKGC stated that nearly all gambling customers have a credit reference file that can be checked frictionlessly. In situations where this can’t happen – estimated to be 0.3 per cent of accounts – customers would be asked to consent to limited data sharing via a third-party open banking provider.

If a customer doesn’t have a credit file and won’t consent to sharing their data via open banking, only then would they be asked to provide other financial circumstances data for risk to be analysed.

“Only an estimated 0.3 per cent of account holders would ever be asked to provide information such as payslips or bank statements,” the commission said.

Using publicly available data, further measures will introduce light-touch financial vulnerability checks on approximately 20 per cent of accounts, with most not undergoing any inconvenience at all.

Rhodes stated: “The aim of these proposals is to provide a more frictionless system benefiting consumers as they would not need to manually provide data and the data provided would be minimised and protected against misuse.

“The proposals would also benefit operators in having a clear understanding of requirements and allowing a frictionless system which is not currently available.”

The UKGC’s consultation is seeking guidance on two types of checks – light touch financial vulnerability checks using publicly available data and financial risk assessments.

A standard approach to a light touch check will be utilised to “identify customers who may be particularly financially vulnerable”. Financial risk assessments will take place at “unusually high loss levels where it seems proportionate to understand more about the potential risk of harm”.

The government and UKGC are proposing that light touch checks occur “at £125 net loss (accrued bonus funds and re-staked winnings would not be included) within a rolling 30-day period or £500 within a rolling 365-day period”.

Financial risk assessments are proposed to occur when losses are “greater than £1,000 within a rolling 24 hours or £2,000 within 90 days (accrued bonus funds and re-staked winnings would not be included)” with lower trigger points for those aged between 18 and 24.

The UKGC highlighted that most checks will fall under the light touch category, be unintrusive and only activated at specific loss thresholds. Consumer’s personal data will not be shared with the financial sector and bank account details will not be given to operators.

When asked “Do you consider these checks will drive people to the black market?”, Rhodes replied that the UK must continue to be a “world leader” when it comes to the gambling industry.

The UKGC CEO stated: “We will never accept the argument that because an illegal online option exists, this should imply that the regulated gambling sector should maintain lower, less fair, or less safe standards. Britain is, and must remain, a world leader in providing consumers with a fair and safe gambling market.”