A day that much of the industry had been awaiting with trepidation is set to arrive today, as the Gambling Commission confirms plans for the implementation of Financial Risk Assessments.
The first stage of implementation will see FRAs implemented by the largest operators, where there is high spend of multiple thousands of pounds over a 24-hour period. For most, this means £5,000 net deposits in a rolling 24-hour period, with it being predicted that only 0.5% of customers will hit these thresholds.
Once fully implemented in due course, Financial Risk Assessments will be applied to customers aged 25 years or older with net deposits exceeding £1,000 in a rolling 24-hour period or £3,000 over a rolling 90-day period; for those under 25, these thresholds will be reduced to £750 in a rolling 24 hours or £2,000 in a rolling 90-day period.
Furthermore, the GC has also underpinned that although the White Paper was put forward during a previous government, it has the full backing of the latest UK leadership.
Providing a briefing to journalists, the Gambling Commission sought to emphasise that following the feedback from stakeholders will see the implementation of FRAs done in a ‘staged and careful way’.
Acting CEO of the Commission, Sarah Gardner, warned that there is an essential need for the gaps to be filled and a change to be made as players who are in financial vulnerability are still being missed.
She emphasised that FRAs are an effective and proportionate way to identify problem gamblers and those at risk, shifting away from a reliance on document checks.
There was a strong assurance from Gardner, as there has been throughout from the Commission, that the vast majority of accounts won’t need to be checked and of those that will be, a significant chunk will remain frictionless.
As part of the new checks, the Commission has outlined that it looks to expand the toolbox available to operators when they need to act on the back of an FRA.
The initial implementation will only feature the larger operators, and as the Commission looks to minimise the burden for the industry, during the early stages of implementation, it has decided not to take any enforcement action where an operator has failed to act following an FRA.
For larger operators, though, it is in many ways easier to weather the impact of significant changes to how they engage with players.
This was acknowledged by Gardner, who emphasised to journalists that they are well aware that every operator has a different portfolio of consumers, and so they will have different proportions of customers who are high spenders.
She outlined that a nuanced approach is being taken so that medium operators don’t have to build automated systems, and can instead respond manually.
There is a growing concern that the introduction of FRAs will serve to escalate the flow of high-spending players to the unlicensed market. However, the GC detailed its faith in the staged implementation of the new checks mitigating this flow.
A major shift in the approach to the way the UK gambling industry undertakes affordability was not unexpected, but they have been met with hostility.
The Betting and Gaming Council’s CEO, Grainne Hurst, previously lamented that “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.”
She added: “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.”
Whilst recognising the BGC’s concern, the GC emphasised that it has taken action to act upon this concern and has held continued discussions with the BGC and relevant stakeholders.
Whilst the inevitable fightback has remained persistent, a reluctant acceptance that the industry will have to embrace some form of affordability check is growing.
The GC will hope the phased and steady implementation of the FRAs will increase this acceptance and further smooth the avenue for a new approach to affordability.
