Yesterday, the Gambling Commission’s Executive Director of Research and Policy, Tim Miller, published a blog updating the industry on the Gambling Commission’s implementation of its widely publicised proposals for financial risk checks.

In accordance with the Government’s commitments in the White Paper, the Gambling Commission commenced its consultation on the two proposed forms of financial risk checks in its Summer 2023 consultation on proposed changes to Licence Conditions and Codes of Practice (LCCP), Remote Gambling and Software Technical Standards (RTS), and arrangements for Regulatory Panels (the “Summer 2023 Consultation”).

Having now “considered responses to the [Summer 2023 Consultation], alongside [its] evidence and research”, and in advance of Parliament’s debate on financial risk checks next week (Monday 26 February 2024), Mr Miller provides further information about how the Gambling Commission intends to implement the financial risk checks proposed in the Summer 2023 Consultation.

Financial risk checks

In the Summer 2023 Consultation, the Gambling Commission proposed: (1) “light touch” financial vulnerability checks using publicly available data at moderate levels of spend, such as £125 net loss within a rolling 30-day period or £500 net loss within a rolling 365-day period (“Financial Vulnerability Checks”); and (2) enhanced financial risk assessments at unusually high levels of loss, such as (for over 25’s) £1,000 net loss within a rolling 24 hours or £2,000 net loss within a rolling 90-day period (“Financial Risk Assessments”).

Whilst the Gambling Commission has not yet published its response to the Summer 2023 Consultation (the “Consultation Response”), Mr Miller’s blog sets out the Gambling Commission’s intended next steps for implementing the Financial Vulnerability Checks and Financial Risk Assessments ahead of its “responses to these consultation topics next month”.

1. Financial Vulnerability Checks

Mr Miller confirms that, “following feedback through the consultation” these “[f]rictionless, light touch” checks will focus solely on publicly available data and will not require operators to consider customers’ personal details, such as their postcode or job title. The aim of the Financial Vulnerability Checks is to identify vulnerabilities, such as “where a customer is subject to bankruptcy orders or has a history of unpaid debts.”

Notably, the Gambling Commission will introduce the requirements for Financial Vulnerability Checks in two stages “[t]o ease the introduction of these checks”. They will initially come into force at a higher threshold for a short period of time before reverting to a lower threshold later in the year “to smooth implementation for consumers”. Mr Miller states that further details will be set out in the Consultation Response.

2. Financial Risk Assessments

The Gambling Commission has, in considering responses to the Summer 2023 Consultation, agreed that a pilot is the most appropriate way to implement the Financial Risk Assessments in a careful manner. This, he states, will enable the Gambling Commission to “test the details of data-sharing in practice, working with credit reference agencies and gambling businesses, thinking always about what this means for the consumer” (the “Pilot”).

The Pilot is expected to run for a period of approximately four to six months and will involve a “selection of operators” (such as betting and casino operators of different sizes). Licensees will not be expected to act on the data they receive during the Pilot but must remain compliant with existing regulatory requirements and will be “expected to continue to protect consumers by implementing their own existing consumer safety controls.”

To enable the Pilot, the Gambling Commission will set out a requirement in its Licence Conditions and Codes of Practice to “facilitate the data-sharing and build in data protection requirements.”

Mr Miller sets out five principles that will guide the Gambling Commission’s actions throughout the Pilot:

1. The Gambling Commission will consider all issues that arise from the Pilot and is clear that this will help refine the final requirements and the models for data-sharing. This will help ensure the intentions and commitments within the White Paper are met.
2. As set out in the White Paper, the Gambling Commission wants a system that means conducting an assessment is frictionless for the vast majority of customers who undergo them.
3. The Gambling Commission wants an overall customer interaction process that can help customers who are at risk of harm.
4. Financial Risk Assessments are only one part of the controls and protections that are in place – the Gambling Commission does not seek to make them a standalone approach to tackle harm.
5. The Pilot is separate from the Gambling Commission’s formal evaluation of the policy, which is a distinct and important longer-term process. Understanding consumer perspectives and experiences is a vital part of this longer-term evaluation.

Alongside the Pilot, the Gambling Commission will continue to gather data which will inform the final thresholds and definitions of loss or spend for implementation following the Pilot.

Further details of the Pilot and data period will be set out in the Consultation Response.

Next steps

Mr Miller states that the Gambling Commission has been working closely with the Department for Culture, Media and Sport “to ensure that the next steps closely reflect the intention of the White Paper.” It will therefore be interesting to hear both the Government’s and Parliament’s position on financial risk checks during the Parliamentary debate that commences at 4:30pm on Monday (26 February 2024). The debate can be viewed here.

The Consultation Response will be published in March.

Please get in touch with us if you have any questions about financial risk checks or if you would like assistance with any compliance or enforcement matters.