Affordability checks: has the interim code made the situation better for punters?

On May 1 the Gambling Commission and Betting and Gaming Council (BGC) announced a new voluntary 'Code on Customer Checks', designed to reduce the frequency of intrusive requests for documentation from punters. The code appeared to represent a major breakthrough after years of punter and industry complaints about affordability checks, but just how significant and immediate has the impact been?

The betting industry has welcomed the voluntary code, while warning that other regulatory requirements, including anti-money laundering (AML) checks, can also prompt requirements for financial documents. And according to one industry source, bookmakers continue to be wary of falling foul of the industry regulator and the new code had made for a "messy landscape" for punters.

The voluntary code will apply until the promised frictionless solution proposed in the government's white paper is developed, tested and implemented, with a six-month pilot due to launch in August. Under the interim code, only those making net deposits of more than £25,000 in a rolling 12-month period have to provide financial documents to prove their ability to afford their gambling.

For those wanting to deposit more than £5,000 in a rolling month, a bookmaker needs to carry out a risk assessment to determine whether evidence of gambling harm was being shown.

The intention of the code is to provide uniformity to what have been described as the "inconsistent" checks being applied by different operators in recent years.

The interim code was welcomed by Per Widerstrom, chief executive of William Hill's parent company Evoke, when he spoke at a gambling conference organised by law firm CMS last week.

"I think the interim code helps us to be more clear what to do and not to do and the alignment across the sector helps," he said.

His counterpart at Betfred Joanne Whittaker told the same gathering: "The interim code is definitely a positive so long as we know the Gambling Commission will take it seriously."

The interim code does not replace operators' obligations to remote customers under the Gambling Commission's licence conditions and codes of practice (LCCP) which include the use of indicators to identify gambling-related harm.

Customer spend is one of those indicators, but so are other factors such as patterns of spend, time spent gambling and customer-led contact.

Andrew Rhodes: the Gambling Commission boss recognises the voluntary code

As Gambling Commission chief executive Andrew Rhodes told the CMS conference: "It can't supplant the LCCP because it isn't written into the LCCP. Otherwise it wouldn't be temporary, it wouldn't be a stepping stone."

Rhodes said the regulator recognised the code and added: "What we need to do is make sure everybody is clear on what that means in practice. Agreeing a code was not simple but it was relatively simple. Getting into the fine detail is obviously where you have got to do a bit more work."

The detail is where concerns have been raised. One senior industry source, speaking on condition of anonymity, said: "What this code does is provide some uniformity to the financial thresholds but what it doesn't do is remove the issue of everything that is not a financial threshold.

"Will operators continue to be wary? I would expect them to be, yes. The fear is customers will say 'I don't think I will hit £5,000 or £25,000 therefore operators will leave me alone'. There are reasons why they won't because they can't, and that is still due to Gambling Commission assessments."

Under the interim code, bookmakers are expected to continue carrying out customer interactions, including questionnaires, phone and live chat interactions and requests to set a deposit limit at lower levels of spend.

Tamsin Blow, partner at law firm CMS, said the threshold for risk assessments specified in the interim code only operates as a backstop for consumer spend if there are no other indicators of harm as set out in the Gambling Commission's LCCP, rather than as a universal threshold to be applied to all customers. 

She added: "That is why the interim code also recognises the need for a range of actions below the thresholds and those actions may result in documents being requested from the customer and/or limiting play before the thresholds are reached."

Professional punter Neil Channing also believes bookmakers are being careful about the way they operate under the interim code.

"Companies don't see it as a good look to say 'oh you can come back now, we've taken away the restrictions, you can deposit', it doesn't feel like that's happening," he said.

"When they change terms and conditions they are quite quick to email you and tell you. No company emailed to say 'good news we've had a bit of a rethink on affordability and you can all start depositing a bit more now' because that would be a bad look."

Neil Channing: thinks bookmakers are remaining cautious under the interim code

The industry source said the interim code is an improvement on the previous situation as it brings uniformity to what actions should be taken when financial triggers are reached.

However, they added: "Operators are going to be left with all the other stuff around behavioural data, patterns of play, all the other stuff that the commission is still going to be watchful about. That hasn't changed at all.

"I think operators will be very wary about picking up this code and saying that's our bible, this is what we do at 5,000, this is what we do at 25,000, and the commission can't come after us as long as we stick to that.

"I think the commission will continue to look at the less explicit stuff that happens away from the financial thresholds and that could make for an ongoing messy landscape."

When the interim code was announced the BGC warned the new code would not offer a complete solution, as AML checks still require requests for documents at lower deposit levels. A new code for AML checks is also being worked on by the BGC and Gambling Commission.

As Whittaker told the CMS conference: "We need an AML code otherwise we are still asking for the same documents."

Blow said compliance with the interim code would not be sufficient to comply with AML conditions. 

She added: "For example, the interim code thresholds are based on net deposits. Over recent years the Gambling Commission has made clear that operators need to take into account gross deposits, as money being taken in and out of the system is an AML concern."

Rhodes said the commission was happy to work on developing an AML code.

He added: "I think it is a lot more complicated because of the AML regulations, but that doesn't mean we shouldn't be trying."

Even at the thresholds set out under the interim code, the biggest punters will still trigger checks, in Channing's view.

"It is still going to catch people who fund horseracing," he said. "Anti-gambling people come out with that figure that x per cent of the profit comes from x per cent of the punters which they take to try and say that shows these people are all addicts.

"Well it doesn't really show that, it just shows they are big punters. But it is true that racing does rely on a relatively smallish number of huge punters, people who bet in four-figure sums are really the people who fund racing.

"If your average stake is two grand and you have three or four bets a week you are over the limits, aren't you. They are basically the people who pay the levy. The people who bet in thousands are the people who are supporting horseracing. There is a very small number of them and it is a fragile ecosystem, and a lot of them have been driven away."

Read more on affordability checks here:

'I only bet on the horses' says Keir Starmer as Labour leader responds to political betting scandal   

New code on affordability checks is a hard-won victory, but concerns remain 

New interim affordability code introduces £25,000 threshold for submitting financial documents 

Explainer: how the new interim code for affordability checks will work in practice  

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