UK Gambling Commission to pilot financial risk assessments for online gambling

The UK Gambling Commission (UKGC) is set to launch a six-month pilot program aimed at testing financial risk assessments for online gambling, beginning on August 30, 2024. This initiative is part of a broader effort by the Commission to enhance consumer protection in the gambling industry through a series of regulatory changes.

The pilot will focus on implementing "light-touch" affordability checks, initially targeting customers with deposits exceeding £500 ($655.71) per month. The goal is to reduce this threshold to £150 ($196.71) per month by February 28, 2025, at which point the checks would become mandatory for all online operators.

These measures are designed to protect players from significant financial losses, particularly those in financial difficulty, while minimizing the impact on recreational gamblers.

Helen Rhodes, Director of Major Policy Projects and Evaluations at the UKGC, emphasized the importance of this pilot in identifying and supporting high-spending customers who may be at risk. "We want to tackle cases where customers have been able to gamble large amounts without any checks or support, where it was later identified that this led to significant harm," Rhodes explained.

"But we are proceeding cautiously to test whether and how financial risk assessments could be introduced in a way that supports high-spending customers in financial difficulties but also supports a frictionless customer journey for the vast majority of customers."

The pilot will involve collaboration with credit agencies and online gambling operators to assess the potential impact of these deposit thresholds in a controlled environment. The UKGC will prioritize identifying high-risk accounts and will evaluate how operators can use limited information to gauge the severity of a customer's financial difficulties, enabling them to take appropriate actions, such as reducing marketing efforts, encouraging deposit limits, or even ceasing the customer relationship if necessary.

The pilot will be conducted in several phases, starting with an evaluation of "Frictionless Part-1," which aims to determine the efficiency of the affordability checks. The UKGC estimates that around 80% of high-spending accounts will undergo these assessments without major issues, as outlined in the 2023 Gambling Act Review White Paper.

The second phase, "Frictionless Part-2," will assess the speed and efficiency of credit reference agencies in processing these assessments and returning results to operators. The UKGC will also examine the relevance and accuracy of the data provided by credit agencies, comparing it to other sources of financial vulnerability information.

The final phase of the pilot will focus on the technical implementation of the affordability checks, evaluating how the data can be best presented to operators to understand the financial risks associated with individual customers.

The UKGC has made it clear that the findings from this pilot will be considered alongside broader research, data, and stakeholder feedback. A successful pilot could lead to the implementation of compulsory financial risk assessments across the industry, with the Commission committed to ongoing evaluations to ensure the policy delivers the intended outcomes for consumers.

Rhodes stated: "If financial risk assessments are introduced in the future, we are committed to longer-term evaluation, which we have discussed in our March blog on this topic. This would enable the Commission and the Department for Culture, Media and Sport (DCMS) jointly to consider if the policy is delivering the intended outcomes for consumers in a live environment."