The Gambling Commission (GC) has reemphasised that Financial Risk Assessments (FRAs) are not affordability checks, will not cap a player’s spend, nor will players be asked for financial documents.
Ian Angus, Director of Policy, stated in a speech at the Clarion Payment Providers Summit that the GC is also in early discussions with its Industry Forum about creating a pathway for crypto assets to be used as a consumer payment option for regulated gambling in the UK.
The Commission will also collaborate with its partners to produce Britain’s first national risk assessment of the illegal market.
Gambling Commission reiterates FRAs frictionless
Angus reflected on the recent FRAs pilot results, reemphasising that they can be frictionless if implemented. He noted that less than 3% of active customers would trigger any steps by an operator, with the GC being ‘mindful of this important targeting of the measure at the highest spending accounts’.
Of those that would trigger a check, 97% would successfully receive a frictionless assessment process, while one in 1,000 accounts would be unable to receive an assessment in a frictionless way, a number that could be reduced further by operators ensuring a customer’s details are correct and their identity has been appropriately verified.
The GC board is set to decide if FRAs should be implemented on 21 May.
“failing to request documents following a financial risk assessment would not be a reason for regulatory action.”
Ian Angus, Director of Policy at the Gambling Commission
If such checks do come into play, the Commission will establish an implementation group with the government, operators and credit reference agencies to develop an implementation plan and timetable to help guide operators and ensure a proportionate approach to customer interaction is taken when financial risk is identified.
Angus said: “If implemented, FRAs will allow us to give clear guidance to operators that they should not require consumers to provide documents to assess financial risk following a financial risk assessment.
“And to provide assurance to industry, our approach to compliance would also ensure that failing to request documents following a financial risk assessment would not be a reason for regulatory action. In fact, doing so would serve no legitimate regulatory purpose in such circumstances.”
BGC threatening legal action
FRAs continue to be criticised by many industry stakeholders. The Betting and Gaming Council (BGC) is threatening to launch legal action against the GC if it presses ahead, as it believes one in five customers would be required to provide financial information.
Grainne Hurst, the BGC’s Chief Executive Officer, stated in an article written for Politics Home that until the Commission can demonstrate if they work, what actions they trigger and what they will mean for ordinary punters, they shouldn’t press ahead with FRAs.
Hurst stated: “FRAs were meant to be ‘frictionless’ and workable in practice. The pilot was supposed to test that. Instead, it exposed serious concerns about whether the system is reliable, proportionate or fair, and whether it will genuinely improve protections for consumers.
“The biggest issue is what happens after a customer is flagged. The Gambling Commission has focused heavily on the idea that most checks will be technically ‘frictionless’, but punters care about outcomes, not process. If an assessment leads to intrusive follow-up questions, requests for personal financial documents and account restrictions, then the customer experience will be severely disrupted.
“these proposals do not meet that test and should not proceed in their current form.”
Grainne Hurst, Chief Executive Officer of the Betting and Gaming Council
“And there are real questions about whether the underlying data can even be trusted. The same customer can receive different outcomes depending on which credit reference agency is used. If operators cannot rely on the consistency of the data being returned, they will be forced to act cautiously. In practice, that means more customers facing restrictions and being asked to provide sensitive financial documents.”
Hurst continued: “The Betting and Gaming Council supports proportionate, evidence-based regulation that protects the vulnerable while allowing the 22.5m adults in Britain who enjoy a bet each month to do so safely. But good regulation must also be workable in practice.
“At the moment, these proposals do not meet that test and should not proceed in their current form.”
Crypto innovation
Angus commented on the work that the Commission is doing to combat the illegal market, ahead of receiving £26m of funding over three years to contribute to this task.
Over the past financial year, the GC has:
- Issued 741 cease and desists to advertisers and operators.
- Reported 397,527 URLs to various search engines and seen 266,667 URLs removed as a result so far.
- Referred 1,068 websites to the search engines for delisting.
- Disrupted 1,134 websites so that they have either been taken down or geo-blocked.
The Commission added that its business plan will scale up, automate where appropriate and develop its wider strategy to tackle illegal operators, as well as consider what drives customers to the black market and what can be done to support innovation in the licensed market to bolster its appeal.
Part of this includes the GC beginning talks with its Industry Forum about crypto assets, following progress made by the Financial Conduct Authority.
“We are looking at what a potential path forward would be, to create a way for crypto assets to be more easily used as a consumer payment option for licensed and regulated gambling in Great Britain,” stated Angus.
“This is early days and there is nothing more to say right now, but it is something we are exploring.”
Illegal market
Angus also noted that data collected by the GC suggests ‘the new overall trendline does not appear to show a consistent or sustained growth in consumer engagement over the 21 months of data’.
However, the UK regulator’s comments come as the BGC promoted new independent analysis from H2 Gambling Capital that suggested ‘black market stakes are expected to surge from £17bn in 2025 to more than £33bn by 2028’.
Hurst argued that the forecasts are a ‘wake-up call’, that the black market is ‘growing fast’ and if the regulated market is less competitive due to ‘higher taxes or intrusive checks, customers will not stop betting, they will simply move to the black market’.
“As the Gambling Commission considers financial risk assessments, it is vital that any checks are genuinely frictionless and targeted,” she said.
“ministers and regulators must avoid measures that hand an advantage to the black market.”
Grainne Hurst, Chief Executive Officer of the Betting and Gaming Council
“Any policy that unintentionally drives even more customers towards illegal operators will undermine player safety and damage the regulated sector. That is why ministers and regulators must avoid measures that hand an advantage to the black market.”
As part of its work on the government’s Illegal Gambling Taskforce, the Commission will work with partners to create the first-ever national risk assessment for the illegal market in Britain.
Angus commented: “We have explored the effects of seasonality and changes in VPN use, but neither suggests persistent growth. It’s always important not to over-rely on data from a single source to tell the whole story on a topic as complex as illegal gambling.
“We continue to work on improvements to our methodology and – alongside gaining more insight from our own research – are seeking input from other international regulators and licensed operators to help verify and improve existing data sources and to identify additional datasets which can be used to improve understanding of the illegal market.”
