Concerns raised over use of open banking by gambling operators in affordability checks on customers

The Horseracing Bettors Forum (HBF) has expressed concern over the use of open banking by gambling operators to check the source of customers' funds.

Open banking allows someone to share financial data that ordinarily only they and their bank would see with a third-party financial provider or service.

A number of examples of gambling operators, among them bet365, using such third parties to check on customers' affordability and whether the source of their funds is legitimate have emerged on social media in recent days.

Such third-party services argue that they remove the friction many punters have experienced during such checks, when they have been asked to provide personal financial information such as bank statements. However, the use of open banking, for which a customer must give consent, has raised concerns about transparency and data protection.

HBF chairman Sean Trivass said: "Bettors overall are not happy giving their personal details to bookmakers whether that is through personal input or open banking. We do not regard open banking as 'frictionless' – we define that as occurring behind the scenes and not via customer input."

The HBF said it was worried about the safety of customer data in such cases and also terms and conditions. 

Trivass added: "As things stand we do not see this as an answer and wonder why this is being rolled out by some bookmakers – and who is behind it – and are wary that this could push even more to the black market or away from racing entirely."

Sean Trivass: "We do not regard open banking as 'frictionless'"Credit: Horseracing Bettors Forum

The government's gambling white paper published last April does reference the use of open banking as a possibility in relation to the three per cent of online accounts it claims would be affected by its proposed enhanced tier of affordability checks, or financial risk checks as it terms them.

The white paper said that when information might be needed to be collected directly from a customer there could be "scope for streamlining this process using open banking", although that would be subject to safeguards to be explored through the consultation the Gambling Commission carried out on affordability checks, the results of which are expected soon.

A Gambling Commission spokesperson said the industry regulator's rules do not require operators to make use of open banking.

The spokesperson added: "However, some gambling businesses choose to offer open banking through an FCA [Financial Conduct Authority] approved provider as an alternative to the direct provision of documents when seeking to obtain information to verify identity, conduct anti-fraud or anti-money laundering checks, and in some cases, to check if there are concerns about a customer’s gambling.

"Gambling operators can only use the information for the reason they collected it rather than for any commercial reasons. There are current safeguards in place for the use of open banking by any type of business through a combination of FCA and ICO [Information Commissioner's Office] rules on open banking providers – including that the customer must be able to choose and to revoke consent to the data sharing, and that the minimum data necessary is used."

Read these next:

Gambling Commission 'working really hard' - but racing still waits for results of affordability checks consultation 

Fall in betting turnover and impact of affordability checks could spark demise of British racing warns punters' body 

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