Bookmakers threaten legal challenge to affordability checks that could mean one in five regular punters are asked for financial documents

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Bookmakers have threatened a legal challenge to the implementation of affordability checks that the industry believes will mean one in five punters with an annual spend over £200 are asked to provide financial documents.

The controversial checks, termed financial risk assessments by the Gambling Commission, could be given the green light by the regulator at its board meeting on Thursday, despite serious concerns around the pilot, which has highlighted contradictory information being returned on the same bettors. Bookmakers claim they would be required to request financial documents, such as payslips, from as many as 480,000 customers as a result.

In a letter sent last month to the Gambling Commission's interim chair Charles Counsell and seen by the Racing Post, Betting and Gaming Council (BGC) chief executive Grainne Hurst wrote that a decision to implement the checks at this stage would be "disproportionate and potentially open to legal challenge", adding that it was incumbent on the regulator to consider whether there is a valid reason to introduce them.

A day that could ruin lives, enrich criminals and damage a great British industry - unless the Gambling Commission’s board members choose to be heroes 

The letter, which was also sent to culture secretary Lisa Nandy, gambling minister Baroness Twycross and the Gambling Commission's acting chief executive Sarah Gardner, laid bare the "grave concerns" of operators, who have identified "serious failings" such as unreliable data from credit reference agencies, and also spelled out the knock-on effect for the Treasury if punters migrate to the unregulated black market.

A senior Gambling Commission executive claimed on Tuesday that affordability checks cannot be evaluated until they are implemented. One betting industry source said: "People are united and incredibly angry. The Gambling Commission aren't engaging and they aren't listening. They're giving every impression they don't care about the betting public and there's every chance now that this ends with a judicial review." 

In the letter the BGC stated that the checks will not fulfil their purpose as set out in the gambling review white paper due to "significant problems with data relevance, accuracy and consistency" and "fundamental implementation issues". It is also claimed the checks would result in a "significant volume of increased document requests" from customers due to problems with the data provided by credit reference agencies.

Grainne Hurst: chief executive of the Betting and Gaming Council (BGC)

Hurst wrote: "The evidence from the pilot is that financial risk assessments are not fit for purpose. Accordingly, the BGC and its members would have to consider all available options should the Gambling Commission implement them without taking into account those findings. Such an approach would harm consumers, harm the regulated industry, harm the taxpayer, boost the illegal market, and, most likely, be irrational."

The Gambling Commission has said only three per cent of customers would ever be subject to checks, but the BGC, which represents the major bookmakers, estimates the percentage of accounts that would trigger the process is five per cent, increasing to ten per cent if only including punters who bet every month, while the percentage increases again to 20 per cent if customers with a net annual spend of £200 per annum or less are removed.

The letter described the piloted checks as "ineffective and counterproductive" and warned of the potential for hundreds of thousands of people to be turned away from the regulated industry due to their reluctance to provide sensitive financial information, which would have severe ramifications for the funding of British racing and potentially lead to the loss of up to £300 million in lost tax receipts from betting and gaming duties.

"Government ministers and Gambling Commission officials have consistently stated that the pilot is a testing and evaluation phase," wrote Hurst. "If FRAs are not effective and would result in more customers playing with illegal operators to evade checks, or alternative approaches are available that meet the purpose set out in the white paper (including where such approaches are already in place), they should not be implemented."

The Gambling Commission was asked if the concerns raised in the letter would be considered when deciding whether to implement affordability checks, whether it was concerned about a legal challenge and if an "urgent meeting" requested by Hurst in the letter had taken place.

In a statement, a spokesperson said: "We reiterate that we're continuing to work on financial risk assessments, with one of the key focuses being on removing unnecessary friction for consumers. 

"If introduced, the checks would apply only to a small proportion of the highest-spending accounts and would be frictionless for the vast majority of those assessed. No decisions have yet been made and we'll shortly be putting recommendations to our board on next steps. 

"We're continuing to engage regularly with industry and other stakeholders as the pilot progresses, and will continue to provide updates as this work develops. Any future implementation would be carefully considered, evidence-led and introduced in a measured and proportionate way."

The Department for Culture, Media and Sport (DCMS) and the BGC were also approached for comment on Saturday.

Read more here:

Betting expert hits back at 'clearly ludicrous' claim affordability checks can't be assessed until they are implemented 

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Affordability checks will be evaluated 'in the real world' despite calls for a pause in their implementation 

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