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Financial risk next steps – February 2024

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Our Executive Director of Research and Policy Tim Miller provides an update on next steps for financial risk checks to help tackle gambling harms.

Posted 22 February 2024 by Tim Miller


The Commission has been working to deliver our commitments to the Government’s Gambling White Paper which commenced with a set of consultations that launched in Summer 2023. One of these topics was financial risk checks and this blog provides an update ahead of our responses to these consultation topics next month.

A particular area of interest in our consultation was the topic of financial risk to help identify and take action for customers who may be financially vulnerable. We have been working closely with the Department for Culture, Media and Sport (DCMS) to ensure that the next steps closely reflect the intention of the White Paper. That is, that the process of conducting these checks will be frictionless for the vast majority of customers who undergo them.

While the consultation was still running, we took the decision to publish a blog answering questions on the financial risk checks consultation to help explain some common misconceptions regarding the proposals.

We completely understand why there has been such interest in financial risk checks. As the Government set out in the White Paper, we have to get the balance right between protecting people from the potentially life-ruining effects of gambling-related harm and respecting the freedom of adults to engage in an activity that for the vast majority they do so without experiencing harm.

We have been listening carefully and have considered responses to the consultation, alongside our evidence and research and have decided to take the following approach to the two forms of financial risk checks:

Frictionless, light touch financial vulnerability checks – two stage implementation

These checks will identify vulnerability such as where a customer is subject to bankruptcy orders or has a history of unpaid debts. They will focus solely on publicly available data and, following feedback through the consultation, will not require gambling businesses to consider an individual’s personal details such as postcode or job title.

To ease the introduction of these checks they will initially come into force at a higher threshold for a short period of time, before reverting to a lower threshold later in the year to smooth implementation for consumers. The details of this will be set out in the full response document.

Enhanced financial risk assessments – a pilot and data period

The consultation proposal was for enhanced financial risk assessments informed by credit reference data at unusually high loss levels where the risks are greater.
We asked in the consultation how these assessments could be introduced in a careful manner and many people supported the idea of a pilot to further test how the data-sharing works in practice. We agree that a pilot is the appropriate way to proceed.

The pilot will enable us to test the details of data-sharing in practice, working with credit reference agencies and gambling businesses, thinking always about what this means for the consumer.

Our approach is that consumers should not be affected during a pilot period to make sure that we can refine the data sharing processes before the assessments are rolled out in a live environment.

How the pilot and data period will look

We consider that conducting a pilot period with a selection of operators will give us sufficient information to inform future decision-making. We will work closely with industry to make sure that we have a spread of different businesses – such as betting companies and casinos as well as some variation in the size of the organisation.

To enable the pilot, we will set out a requirement in our Licence Conditions and Codes of Practice. This will facilitate the data-sharing and build in data protection requirements.

We anticipate that a pilot will run for approximately 4 to 6 months. Throughout this pilot period, gambling businesses will not be expected to act on the data they receive – this is to be a genuine pilot of how the data sharing works – but they will be expected to continue to protect consumers by implementing their own existing consumer safety controls and remaining compliant with our existing regulatory requirements.

Alongside the pilot, we will continue to gather data which will inform the final thresholds and definitions of loss or spend for implementation following the pilot period.

Further details on the pilot and data period will be set out more fully within the full consultation response but there are five principles which will guide our actions throughout.

Firstly, we will consider all issues that arise during the pilot stage and are clear that this will help refine the final requirements and the models for data-sharing. This will help ensure the intentions and commitments of the White Paper are met.

Secondly, as set out by the White Paper, we want a system that means conducting an assessment is frictionless for the vast majority of customers who undergo them.

Thirdly, we want an overall customer interaction process that can help customers who are at risk of harm.

Fourthly, financial risk assessments are only one part of the controls and protections that are in place – we do not seek to make them a standalone approach to tackle harm.

And finally, a pilot approach is separate to the formal evaluation of the policy which is a distinct and important longer-term process – understanding consumer perspectives and experiences is a vital part of this longer term evaluation.

One part of the solution

At the Commission we completely understand why there has been such interest in financial risk checks. But it should be remembered that protecting people who are vulnerable, while still affording the freedom of others to gamble safely, is complex and there is no single solution.

And that is why we will continue to take forward all of the Government’s White Paper proposals, which we believe can significantly support and protect consumers and improve overall standards in the industry.

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