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The implementation of new landmark affordability checks is reportedly hanging in the balance this week, with a decision looming on Thursday. 

Although the Gambling Commission (UKGC) has consistently remained vehement that these changes are not analogous to so-called affordability checks and will be a frictionless part of the safer gambling framework, they have been met with a backdrop of criticism from several quarters.

We are shining a light on all the details around the regulatory changes and analysing the key questions as the fate of a polarising shift reaches a new chapter this week.

What are the changes? 

The prospect of financial risk assessments was first introduced as part of the 2023 Gambling White Paper, and the measure is intended to be a frictionless process that supports the identification of financially vulnerable players

Under the UKGC’s proposals, players who hit specified thresholds will trigger a financial risk assessment undertaken by a credit reference agency.

According to the UK regulator, which has been conducting a pilot study on the reform since September 2024, the assessments are designed to act as an extra layer to identify financial difficulties by flagging those who are in debt, have defaulted on payments or are bankrupt.

That being said, the Commission has revealed that it only anticipates around 3% of active accounts to meet the threshold required to trigger an assessment.

Anyone who is deemed to be financially vulnerable by the assessment will then be supported by the operator to ensure they are wagering in a responsible manner.

The Opposition

There has been a rising tide of voices demanding that policymakers abandon the planned implementation of the assessments over fears that they will push players to the black market and place a significant dent in the financials of the UK gambling industry.

One of the most aggressive adversaries of the bill has been the British Horseracing Authority, which estimates that betting operators will lose out on £900m annually, the racing industry itself will lose out on £250m over five years, and the government will receive £300m less in tax revenue once the checks are implemented.

Critics claim that the assessments will not be as frictionless as set out in the white paper and would require players to submit documents when requested – something that 65% of players would be unwilling to do, according to a YouGov poll published by the Betting and Gaming Council (BGC).

They have also raised concerns that credit agencies doing the checks as part of the pilots have derived different results from the same customer, calling into question the capabilities of agencies to provide an accurate picture of a player’s financial situation. 

Among the voices in opposition is Dr James Noyes, who wrote in favour of the reforms in 2020 and 2021 as part of his role as Senior Fellow at the Social Market Foundation.

In an open letter to Culture Secretary Lisa Nandy, he said that key provisions of the proposals have not been met, including the establishment of an independent gambling ombudsman to provide for customer redress.

Noyes wrote: “My support for affordability checks was done on the basis that there would be adequate oversight and evaluation of their efficacy, and that the checks would be carried out in a non-intrusive manner. Yet I am reading increasing reports that the pilot scheme has involved inconsistent data, unclear outcomes and unnecessary friction.” 

The voices for change

The Commission argues that the assessments will provide an important extra layer of protection for players who may be facing financial difficulties.

It points out that participants in the pilot study were between twice and four times more likely to have a debt management plan and between twice and five times more likely to have a default in the last 12 months than comparable.

The regulator has sought to address what it describes as ‘ill-informed or inaccurate’ commentary from opponents of the reform, and emphasised that the goal of the proposals is not to push players away from remote gambling to the land-based sector or the black market.

“Forms of support for customers will be most effective if they support customers to gamble sustainably rather than simply move to the land-based, bricks and mortar market, between operators or to the illegal market,” said the UKGC in a blog post.

The UKGC has also shared data from its pilot study that suggests operators would be unable to conduct an assessment in a frictionless way for just 1 in 1000 customers who meet the thresholds on average – below the predicted levels set out in the White Paper.

What will the impact be on slots/online casinos?

The proposed financial risk assessments focus on player spending on online casino and sports betting platforms.

Although much of the opposition to the assessments has been focused on the impact of high-value sports bettors and the racing industry, slots currently contribute more than half of the UK’s gross gambling yield.

Given that this is the case, the largest spenders on online casino platforms will also be subject to such checks if the assessments are implemented by the UKGC.

If these players are pushed to the black market, as suggested by organisations such as the Betting and Gaming Council, online casino operators risk losing a valuable portion of their player base.

Have they worked in other countries?

Risk assessments are not a novel approach, and have been used extensively across Europe, with similar approaches undertaken in both Germany and the Netherlands.

In Germany, players have been required to submit financial information to prove affordability if they attempt to deposit more than €1,000 per month since July 2021. 

Meanwhile, Dutch law required players to undergo an affordability assessment when they deposit €700 in a month. This is reduced to €300 for players between the ages of 18 and 24.

Similar to the UK, these measures form part of wider gambling reform in both countries, designed to strengthen player protection and increase oversight on the regulated sector.

However, concerns remain surrounding the rising presence of the black market in the Netherlands and Germany, driven by the onerous demands that degrade the product offering of the regulated sector.

According to a recent study by Glücksspielbehörde (GGL), the Federal Authority of Gambling in Germany, the country’s channelisation rate is 23%, meaning that almost a quarter of the country’s gaming revenue is generated by the black market.

In the Netherlands, this figure is more concerning, as the country’s gaming regulator stated earlier this month that nearly half of all gambling spend takes place with unlicensed providers.

For comparison, estimates made last year placed the UK’s channelisation rates at 9%.

Though affordability measures cannot be directly attributed to the rise of the black market in Germany and the Netherlands, they formed part of a wider raft of regulatory and taxation changes that placed pressure on both operators and players in the regulated sector.

Will they pass? 

While the UKGC remains adamant that no concrete decision has been made on the implementation of financial risk assessments, communications from the regulator suggest they are confident that the checks can be done in a frictionless manner as set out in the White Paper.

The findings of the pilot study are now set to be presented to the UKGC’s Board on 7 May during its next meeting.

While voices in the industry have earmarked this date as one that will cement the fate of the assessment one way or another, the UKGC has emphasised that no timeframe has been set out for when assessments will be implemented.

“If the decision is made to introduce these assessments, we will work closely with the industry and credit reference agencies on the details of a sensible implementation plan,” said the UKGC.

“We are mindful of the risk of over-implementation or overly quick implementation of regulatory requirements, which could lead to unnecessary friction for consumers.”

iGaming expert perspective 

In theory, financial risk assessments can act as an important part of the responsible gambling journey for players.

Having some level of visibility over a customer’s financial status will provide operators with an extra layer of visibility when deciding whether spending remains sustainable for high-value players.

However, the concerns raised by opponents of the assessment remain equally valid. 

Given the current UK climate, where stakeholders are contending with the consequences of ongoing tax hikes on remote gambling, the prospect of financial risk assessments adds an extra level of complication for players and operators alike.

The threat of the black market is very real, and policymakers have a duty to work with the industry to ensure that players stay within the regulated sector.

The UKGC should only push on with financial risk assessments if it can ensure that they will become a truly frictionless part of the customer journey and provide a net positive to protecting players at risk of problem gambling.

Anything other than this will only push players to the predatory black market, which is devoid of any forms of player safeguarding.

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