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Regulator slammed for ramping up affordability checks ahead of gambling review

Industry support: HRI have recently launched an app focussed on providing support for people in the industry
Affordability checks for online betting are set to feature in the gambling white paperCredit: Edward Whitaker

Checks on the wage slips and bank statements of people who bet are being ramped up even as the British government is expected to imminently announce that hugely controversial affordability checks should be introduced only in "non-intrusive" fashion.

Customers are already being asked for sensitive financial documents by bookmakers, acting on guidance from the Gambling Commission, which regulates gambling in Britain, that operators must "assess affordability" for customers based on average income levels and impose thresholds that trigger intrusive checks, "such as [providing] three months' payslips, P60s, tax returns or bank statements".

Yet the industry regulator does not have a mandate, say legal experts, for "such an infringement on the personal liberties of the overwhelming majority". The experts maintain that the introduction of unprecedented financial checks tied to personal spending is a matter for parliament to consider.

Customers are already being asked for sensitive financial documents by bookmakers
Customers are already being asked for sensitive financial documents by bookmakers

One MP said that it appeared the Gambling Commission was acting "well outside its remit" and that requests for sensitive information raised "serious questions regarding personal liberty and data protection".

The contentious spending controls are among proposals being examined by government as part of its review of gambling laws. A long-awaited white paper is expected within days and reports this week suggest it will stop well short of implementing checks in the heavy-handed form already being mandated by the Gambling Commission.

Preempting the government on such a controversial issue has also led to concerns over what role the Gambling Commission will be handed following the gambling review.

The current situation is being compounded, it is claimed, by an ambiguous approach from the commission, which will not give specific guidance on when checks should be made. Inevitably, this is leading to the precautionary principle being applied by bookmakers for fear of regulatory punishment.

The controversial issue is one of vast importance to the British racing industry. It has estimated lost revenues of £100 million per annum should such checks be introduced at the low levels of spend advocated by anti-betting campaigners.

In addition, punters have complained that gambling is being treated unlike any other form of discretionary spending. A reluctance to share sensitive financial information is commonplace, with one bookmaker representative telling MPs last week that 90 per cent of customers asked to provide documents decline to do so.


Gambling review explained

What are affordability checks in betting?
Similar to the checks carried out by lenders during mortgage applications, these are proposals that anyone gambling over a certain threshold should have to prove they have the funds and/or income to afford their spending. Anti-betting campaigners want them to be applied on anyone spending as little as £100 a month on betting, and expect customers wanting to bet more to submit financial documentation such as bank statements and wage slips to their bookmakers.

Why are they controversial?
While anti-gambling campaigners say financial checks are necessary to prevent problem gamblers from losing more than they can afford, others say they are a disproportionate response to a problem which affects only a tiny minority of bettors (statistics showed the rate of problem gambling in the year to March 2022 was 0.2 per cent, down from 0.4 per cent the previous year) and represent a violation of privacy and civil liberties. They also highlight that while affordability checks are common when borrowing money, they have never before been applied to discretionary spending of an individual's own money.

What is the government proposing?
The government is finalising its white paper containing recommendations for an overhaul of gambling law, with the document expected within days. According to latest reports and industry sources, the government is set to recommend 'non-intrusive' background checks, which would not involve individuals having to submit sensitive financial information to bookmakers.

What is the Gambling Commission doing?
The Gambling Commission, which regulates the British gambling sector, has not waited for the government to give its verdict on affordability checks, despite huge controversy around the unprecedented proposals. It has in effect mandated the introduction of the most intrusive form of financial checks, expecting bookmakers to ask customers for bank statements and pay slips. To compound the issue, the regulator has refused to give bookmakers clear guidance on the levels of spend at which it thinks affordability checks should be applied.


Boris Johnson's government has previously indicated a desire to "strike an appropriate balance" between player protection and the freedom of individuals "to choose how they spend their money".

However, thousands of punters are already discovering limits placed on their betting accounts, and receiving requests for private financial information.

One told the Racing Post recently he had "wasted hours and hours of my life" dealing with affordability checks in order to have a bet.

Boris Johnson's odds on an early departure from Downing Street have lengthened
Boris Johnson: government has indicated desire to strike an 'appropriate balance' on gambling reform

David Whyte, a gambling industry specialist with law firm Harris Hagan, says a fear of regulatory penalties is at the root of intrusive checks.

Whyte, who spent nine years with the Gambling Commission, said one of the three licensing objectives in the Gambling Act 2005 is to protect children and other vulnerable persons from being harmed or exploited by gambling.

He told the Racing Post: "The difficulty is that the commission seems to regard everyone as vulnerable or at risk of harms associated with gambling if they, even occasionally, gamble more than the commission considers is an acceptable level, irrespective of the customer's own views or any suggestion that they are problem gamblers.

"As a consequence it is, in effect, extrapolating its expectations to everybody who gambles.

"In practical terms, what we are seeing following compliance visits is the commission is using the threat of regulatory action against operators to require them to carry out affordability checks on customers gambling anywhere from £500 a month and an expectation that these customers be asked for evidence of their means to gamble at that level, in many cases their bank statements, their wage slips."

Whyte believes the Gambling Commission justifies its approach by citing what he described as "manifestly obvious compliance failures" by operators whereby customers have spent tens of thousands of pounds with no operator interaction or assessment of affordability.

While such cases were clearly concerning, and deserving of regulatory action, the regulator was taking a "big leap" asking operators to apply such intrusive measures to the mass market, Whyte added.

"We do not believe," he added, "that the commission has a legislative mandate for imposing such an infringement on the personal liberties of the overwhelming majority of betting customers who enjoy their gambling and display no indicators of being at risk of harm.

"This is damaging the industry already in advance of the gambling review by capturing the vast majority of gamblers who are neither problem gamblers nor vulnerable. Left entirely to the commission, the balance of regulation is wrong. We hope the gambling review puts that right."

The Gambling Commission has raised the prospect of affordability checks resulting from a monthly net loss of as little as £100, a figure revealed in a consultation on customer interaction launched in November 2020 that incensed many bettors and attracted 13,000 responses.

However, just three days after the consultation's launch the publication of the industry regulator's compliance and enforcement report appeared to suggest the commission had already made up its mind.

In the report's view, "customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three months' payslips, P60s, tax returns or bank statements".

Asked if that were still its position, the Gambling Commission said: "The commission's formal guidance to remote operators is clear and states that: open source data exists which can help operators assess affordability for their GB customer base and improve their risk assessment for customer interactions.

"Thresholds should be realistic, based on average available income for your customers. This should include the Office of National Statistics publications on levels of household income. This is still the commission's position."

Whyte added: "We can tell you categorically from our experience of dealing with compliance assessments of licensed operators that the commission expects operators to demonstrate how they have satisfied themselves as to affordability through the provision of documents from their customers."

The Gambling Commission has been accused of acting 'well outside its remit'
The Gambling Commission has been accused of acting 'well outside its remit'

The Gambling Commission's actions were criticised by Conservative MP Andrew Bridgen.

He said: "I have been critical of the Gambling Commission in the past and again it appears to be working well outside its remit. The minister [Chris Philp] has indicated that any affordability checks should only be for the very vulnerable or whose gambling has taken on a pattern that could suggest an addiction, also that any checks be as unobtrusive as possible.

"The growing expectation that ordinary punters should hand over sensitive financial information when looking to open or maintain accounts is an entirely over-the-top dictate by the Gambling Commission, and one which raises serious questions regarding personal liberty and data protection.

"I will be looking to raise these concerns when the gambling white paper is published, which is very imminent."

Whyte said the commission's approach and pressure on operators had been "compounded by the lack of clarity as to the commission’s expectations, in particular about when affordability should be evidenced".

Bookmakers have been reluctant to speak on the record on this subject given the ongoing gambling review. However, one industry source said: "Operators are frustrated at what appears to be the commission trying to appear muscular but doing it in such a way as not to provide the kind of clarity that operators need to do business."

These frustrations stem from affordability compliance assessments being carried out by the Gambling Commission. Bookmakers have told the Racing Post that although they will be told where they have fallen short, which can trigger penalties, they will not be given any specific guidance at what thresholds they should ask customers for proof of income.

"It is a source of growing frustration," the source added, "that the commission is stopping short of being crystal clear for what the thresholds are for things like affordability but instead is leaving operators to join the dots according to enforcement action that is taken either on themselves or on industry peers."

Having finally issued a response to its original consultation in February, in April the Gambling Commission announced a second consultation on the subject of affordability checks while the sector waits for the long-delayed gambling review white paper.

A spokesperson said: "The commission has been working with government to provide advice on the review of the Gambling Act 2005.

"Because of the issues we continue to see in our casework, we have committed to a further consultation which will propose more prescriptive requirements on identifying and tackling the three key financial risks for consumers: significant unaffordable losses over a short period [binge gambling], significant unaffordable losses over a sustained period, and customers who are particularly financially vulnerable.

"Our consultation will take account of the wider context of the government's review, working with government to do so."

However, Whyte is adamant that affordability checks pose constitutional and personal rights questions which fall outside the regulator's remit. "This is for parliament to decide, not the Gambling Commission," he said.


Read more on the gambling review:

'Non-intrusive' affordability checks expected to feature in gambling white paper

Customers hit with affordability checks 'disappear and go elsewhere', MPs warned

Government to ensure affordability checks will 'harmonise' with gambling review

On-course bookies claim affordability checks will be 'logistically impossible'

'Hours and hours wasted' – the punters already affected by affordability checks


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