Financial Risk Checks – A Closer Look

With the Gambling Commission recently closing a consultation that included proposals for financial checks on certain players, Trustee Jill Britton gives an overview of our viewpoint on these measures.

The upcoming reform of the gambling industry, started by the Gambling White Paper, has brought financial checks on players to the forefront of the debate. Considering those most susceptible to harm can resort to consumer credit to fund their gambling, the need for some form of financial check is clear.

Two types of financial checks have emerged:

Financial Vulnerability Checks are unintrusive assessments, using publicly available data at moderate spending levels. Some larger operators already incorporate these checks for all customers during registration, while others implement them at various points.

A Financial Risk Assessment is a more detailed check that takes place after unusually high loss levels, informed primarily by credit ratings agency data. 

Setting the thresholds for these checks rests in the hands of the Gambling Commission, which faces the challenge of drawing red lines in a grey area, a process that is certainly difficult, but essential. 

Thoughts from our Lived Experience Community

We see the introduction of financial checks as a positive stride towards player safeguarding. The consensus within our Lived Experience Community is clear. When surveyed, over 90% said they thought Financial Vulnerability Checks were a positive move, and a unanimous 100% support the idea of an enhanced financial check following unusual loss patterns.  

However, our Lived Experience Community have raised important concerns about the effectiveness of these checks, dependent on how the Gambling Commission and the Government choose to implement them. 

Crucially, we are concerned that there is not ‘a single customer view’ of all accounts held by a user. Without this, players may create numerous accounts across various operators, which is within their rights but could potentially lead to oversight. This could result in significant losses going unnoticed until it’s too late.

Threshold Levels

The threshold levels are also high. For instance, the proposed threshold for a financial risk assessment related to binge activity of more than £1,000 in a rolling 24 hours is too significant an amount to lose before an intervention. If a player was to hold ten accounts, then they could potentially lose £10,000 in a day before the system intervenes. This is a significant concern. To experience losses this large would be difficult for many.

Recent data from GambleAware showed that among those treated within the National Gambling Support Network in 2021/22, 63% reported having a debt due to gambling. To them, these checks would have made little difference.

Stronger Checks

We are advocating for stronger checks when accounts are opened to proactively address potential financial hardship for vulnerable players.  

An argument against stronger checks and lower thresholds, is that players will shift towards the illegal market. But it’s worth noting that evidence supporting this displacement is far from clear, and if the checks are as unintrusive as planned, then the incentive to shift to the illegal market is much reduced. There needs to further research in understanding the implications in people turning to the illegal market.   

It is hard to deny that formalising the process and setting out exact figures for Financial Vulnerability Checks remains a daunting task, but it’s a necessary one. Our Lived Experience Community tell us this, so as these proposals move forward, we will continue to advocate for maximising player protections wherever possible.