The UK Gambling Commission (UKGC) is set to implement financial checks for its highest-spending customers in a gradual rollout. This initiative will begin with a threshold so elevated that it is estimated that fewer than 0.5% of gamblers will ever meet it. Interestingly, the UKGC has indicated that it will not penalize operators who do not act on these results during the initial phase of the rollout.
On July 7, the UKGC announced that its board had approved the introduction of Financial Risk Assessments (FRAs), influenced by feedback from the gambling sector and other stakeholders, leading to a cautious phased approach.
The measures were initially outlined in the 2023 Gambling Act review White Paper, which left the specifics of the affordability checks to the discretion of the regulator.
In the first phase, only the largest operators will be required to conduct these assessments, which will only apply when customers aged 25 and older make net deposits exceeding £5,000 within a 24-hour period. According to UKGC Acting Chief Executive Sarah Gardner, this spending pattern is exceeded by less than 0.5% of customers. For those under 25, the threshold is set at £2,500.
Full implementation will eventually lower the thresholds to net deposits of over £1,000 in a single day or £3,000 over 90 days for customers aged 25 and older, while younger customers will have thresholds of £750 and £2,000, respectively. However, even at full rollout, only about 3% of accounts will be subject to these assessments.
Clarifying the purpose of the FRAs, UKGC officials emphasized that these measures should not be referred to as “affordability checks.” UKGC Director of Major Policy Projects, Helen Rhodes, explained that the FRAs do not assess how much a customer can afford to lose; rather, they aim to identify individuals already facing financial difficulties by examining indicators such as arrears and defaults. This distinction is crucial, as the UKGC aims to reassure gamblers that their personal information will not be deeply scrutinized.
Rhodes noted that the regulator continues to encounter cases highlighting the necessity of identifying individuals in financial distress and providing them with support. Evidence from the UKGC indicates that high-spending customers are 2-4 times more likely to have defaulted on payments in the past year compared to the general population.
Operators have been criticized for failing to identify many vulnerable customers, yet they continue to send marketing materials to these individuals despite their financial challenges.
Most customers are unlikely to notice these financial checks, as credit reference agencies typically conduct assessments without requiring documentation, which do not impact credit scores.
A pilot study revealed that operators could evaluate 97% of customer spending above the set thresholds, a figure significantly higher than the 80% projected in the 2023 White Paper.
Additionally, the UKGC has made a notable concession by stating it will not enforce compliance against operators who do not act on assessments indicating financial difficulties during the early stages of implementation. Gardner described this approach as “really unusual for the commission and for regulators in general,” indicating that it was a response to industry concerns regarding compliance.