Affiliate Leaders unpacks the recent changes to affordability checks in the UK, analysing how the measure will have an impact on affiliates.
Affordability checks have long been a discussion point across the gambling industry. And it’s safe to say that they’ve been received with mixed reviews – finding the sweet spot between player protection and avoiding overly-stringent regulations has been a difficult balance to find.
Of course, these checks have been designed to ensure that players can afford their gambling activity without experiencing financial harm.
But from 28 February, new changes were introduced by the UK Gambling Commission, meaning that a flag is raised when a player deposits more than £150 in a month. For operators, it’s yet another regulatory hoop to jump through, albeit a crucial one in the eyes of the Gambling Commission. But what about affiliates?
In a sector that thrives on volume, conversion and friction-free journeys, these new affordability requirements could prove to be a genuine gamechanger, for better or worse.
A ripple effect
Initially, when the pilot scheme to introduce financial checks was announced by the Commission, one of the most prominent concerns from industry stakeholders was the impact it will have on the player journey.
Initially triggered at £500 net spend per month, dropping to £150 from 28 February, the pilot scheme has been a testing ground for the UK’s regulator to determine whether or not such checks will be effective for player protection.
Helen Rhodes, Director of Major Projects and Evaluations, has previously said: “The pilot exercise is proving to be worthwhile in testing how financial risk assessments might work in practice and exploring practical implementation issues before final decisions are made.
“Taking a staged approach to the pilot means that issues identified in the first stage can be explored further, such as data consistency across credit reference agencies where appropriate and data accuracy from operators.”
The decision to lower the net deposit limit to £150 forms stage two of the pilot scheme, with stage three and four analysing data relevance and accuracy, and implementation feasibility.
Rhodes added: “A key part of our work will also be to further support operators in considering how financial risk assessments could be combined with other indicators of harm, which gambling businesses already monitor, to support customers in the most frictionless manner possible.”
While the push towards finding new ways to identify, and combat, markers of harm is commendable, many from across the iGaming industry have expressed concerns that the new affordability checks introduce a whole new layer of friction that could potentially push many players to reconsider where they place their bets.
Customers used to signing up, depositing and spinning within minutes could now be subjected to soft credit checks, open banking requests, or even invasive requests for pay slips and bank statements. All of which has the potential to send average conversion rates plummeting.
It’s an understatement to say that conversions are an integral part of being an iGaming affiliate. It’s the beating heart of the business model. Anything that turns seamless sign-ups into abandoned journeys is certainly a spanner in the works.
The impact
This is no longer just about percentages on a dashboard; the new affordability checks mark a fundamental shift in how affiliates will need to think about player acquisition in the UK.
One of the likely effects of this new pilot scheme is that we’ll see a shift in player value. The days of treating every player as equal are over. The new affordability regime will force operators, and by extension, affiliates to become a lot smarter about who they target and how they qualify leads.
Not only will we see a change in the way that affiliates deploy segmentation strategies – likely resulting in more campaigns tailored towards those that are less likely to trigger affordability checks – but we could also see an overhaul in the content that affiliates produce too.
Generic “Top 10 UK Casinos” listicles might not cut it anymore. Affiliates will be smart to focus their attention on providing more educational content around the affordability checks themselves, explaining what they mean, why they’ve been introduced, pre-empting player concerns and framing the process in a more positive light that promotes responsible gambling efforts.
It’s not an easy transition for an industry that’s historically been all about converting the highest number of players possible, but it’s probably a necessary one.
There’s also the compliance elephant in the room. While affiliates aren’t responsible for running the checks themselves, the Gambling Commission’s gaze is rarely confined to one part of the value chain. Affiliates will need to be squeaky clean in how they present offers, how they talk about player eligibility and even how they discuss bonus terms.
It’s easy to view the new checks as a potential headache, but there is also opportunity here. In a sector where a ‘cookie-cutter’ approach to content and product development has everyone rolling their eyes, the introduction of affordability checks creates a space for affiliates to rethink their content strategy and get creative with how they educate and engage with players.
Affiliates who can help players understand, navigate and even embrace these checks will carve out a competitive advantage that sets them in good stead, especially now that these checks are here to stay. Conversion rates will take a hit, but the affiliates who adapt, evolve and lean into their role as trusted intermediaries will find new ways to thrive.
