Affordability explainer: what is happening from Friday and how will it impact punters?

What is happening on Friday?

In May, the Gambling Commission earmarked August 30 as the next stage of its implementation of affordability checks, although punters will only be subject to one aspect for the time being.

Online gambling operators will be required to conduct what the commission terms 'light touch financial vulnerability checks' for those customers with a net deposit of more than £500 a month. These will operate on a 30-day rolling period.

Separately, a pilot will also begin of a second, higher tier of enhanced 'frictionless' financial vulnerability checks, which were set out in the government's gambling white paper published in April last year. These will not affect customers.

What do the 'light touch' checks involve?

The commission has said these checks will focus solely on publicly available data – such as County Court Judgements (CCJ) and bankruptcies – and will not require operators to consider an individual’s personal details such as postcode or job title.

The commission says that customers who trigger a 'risk flag', such as a CCJ, should expect interaction "tailored to the nature and severity of all the indicators of harm for that customer". This could involve deposit limits, as well as account closure.

Initial proposals in the government's white paper published last year had set the first tier of financial vulnerability checks at £125 net loss within a 30-day period or £500 within a year. However, in plans first set out by the commission in May, the checks will initially come into force at £500 net deposits a month before reducing to £150 a month from February 28 next year.

What impact will they have?

Racing's leadership has claimed affordability checks already implemented by bookmakers has reduced online betting turnover on racing by hundreds of million of pounds, and has estimated that the government's proposals could wipe a further £250 million from the sport's revenues over the next five years.

Concerns around the proposed measures were highlighted in Westminster Hall debates in October last year and in February this year, the latter after a petition on stopping affordability checks reached 100,000 signatures in less than a month.

What about the pilot?

The commission has previously said that during the pilot it would work with credit reference agencies and "the largest remote operators", and would examine the potential impact on customers. The pilot is intended to last for six months, with some additional time for reporting the results, but could be extended to the end of April next year.

The initial proposals set thresholds for the second tier of checks at losses of greater than £1,000 within a rolling 24 hours, or £2,000 within 90 days. However, the commission subsequently has said it will explore "the exact financial thresholds the assessments would be conducted at" as part of the pilot.

The commission attempted to offer further insight into the aims of the pilot this week, although it attracted criticism from leading analysts for the update "lacking in detail and transparency", while the BHA said it raised "several questions", notably around what level of spend will be tested during the pilot. 

Will I be affected by the pilot?

In short, no. The commission has confirmed it is not a "live test" and no consumers will be affected. Instead, the pilot is more of a series of assessments using real data throughout the process, but without taking any action on it. 

The commission has also said that during a pilot, and if introduced, financial risk assessments would not affect a consumer’s credit rating.

Read more:

BHA chair says racing must stop thinking short-term as bid to reverse fortunes is described as 'almost mission impossible' 

Joe Saumarez Smith: 'If you overregulate, you drive your biggest customers to the black market' 

Gambling Commission accused of failing to provide transparency ahead of affordability pilot 

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