Frictionless affordability checks pilot shows potential for 'confusion' - Gambling Commission

Frictionless affordability checks have the potential to cause "confusion" as different credit reference agencies (CRAs) can produce divergent findings for the same individual, the Gambling Commission has said. 

An update on the pilot of frictionless checks published on Monday revealed the potential for discrepancies as "credit reference agencies have unique systems and ways of presenting the findings", which "caused some issues for pilot participants" in assessing those findings, according to the commission.

The Betting and Gaming Council said it was working with the Gambling Commission on the pilot but stressed it was "crucial" no checks be introduced that risked driving bettors to the black market.

The commission said it was testing whether and how checks could be introduced in a way that captured those at risk but also meant that they would be frictionless for the "vast majority of customers". However, the comments raise concerns that far more people could end up being asked for personal information to prove they can afford their level of gambling spend. 

The pilot of affordability checks – or financial risk checks as they have been termed – was launched in September and involves a group of the largest online bookmakers. It is taking place in three stages, running until April.

The first of the stages, which involved inactive customers and was aimed at testing how operators prepared data for the CRAs and how the data was returned, has been completed.

Helen Rhodes, who is leading work on the pilot: “The pilot exercise is proving to be worthwhile in testing how financial risk assessments might work in practice."Credit: Edward Whitaker (racingpost.com/photos)

The commission said that approximately 95 per cent of 530,000 assessments across three CRAs were initially frictionless - meaning a valid credit file was found and an assessment made - outperforming assumptions made in the 2023 gambling white paper, although it added that direct comparisons could not yet be made.

However, the commission found "a number of issues to be explored further" in regards to data quality, including that the rating given to a customer can "means different things across credit reference agencies".

It added: "More can be done in the next stages or in any final implementation to support operator understanding of these different systems and indeed to allow credit reference agencies to make refinements to their models to reduce unnecessary variation or confusion, before implementation should this be introduced."

The commission also said that operators participating in the pilot were uncertain "about the exact actions that might be proportionate" when considering customer interactions based on the financial risk assessment and the information the companies involved already hold. The commission said a working group had been formed to "inform guidance" on this point.

Gambling Commission director of major policy projects Helen Rhodes, who is leading work on the pilot, said: “The pilot exercise is proving to be worthwhile in testing how financial risk assessments might work in practice and explore practical implementation issues before final decisions are made. 

"Taking a staged approach to the pilot means that issues identified in the first stage can be explored further, such as data consistency across credit reference agencies where appropriate and data accuracy from operators.

“A key part of our work will also be to further support operators to consider how financial risk assessments could be put together with other information about indicators of harm which the gambling businesses already have, to support customers in as frictionless a manner as possible.”

A spokesperson for the BGC said it had supported calls for enhanced spending checks online that are "carefully targeted to those showing signs of financial vulnerability", adding: "We are working with the Gambling Commission on the pilot for financial risk assessments.

"It is essential checks online do not interfere with the vast majority who bet safely and responsibly, so they can continue enjoying their hobby without unnecessary intrusion or friction.

"It is crucial no check is introduced which risks driving those who do bet safely and responsibly to the unsafe, unregulated gambling black market online.”

A lower tier of what were described as 'light-touch' financial vulnerability checks were also introduced by the Gambling Commission at the end of August with a threshold of £500 net deposits per 30-day rolling period. That is due to reduce to a £150 threshold from February 28.

Comment: pilot update reflects industry concerns

Monday's update from the Gambling Commission was heavily caveated by the industry regulator, but it appears to confirm concerns expressed privately by bookmakers in recent months: that the system being trialled to deliver 'frictionless' checks might actually increase the number of punters subjected to interventions and manual checks.

The blog introducing the findings was at pains to describe them as "preliminary" and that they may change during the later stages. Indeed, the commission said the completed first stage could be described as a "pilot of the pilot". 

As a result it urged caution on how the findings are used and that it should not be assumed "that conclusions are being reached". However, the admission that different credit reference agencies are returning different results for the same individuals reflects what bookmakers have been privately warning is the biggest problem with the pilot.

One industry source told the Racing Post: "The discrepancies which the Gambling Commission have already identified give real concern this model will not improve the measures already in place to provide protections for those most vulnerable to harm. It seems clear, pushing ahead with this system may in fact frustrate punters who don’t need interventions, and have the opposite effect everyone is seeking to achieve.”

Bookmakers have said they believe the voluntary scheme introduced last year to standardise checks while the pilot is carried out has been working well, although there is still frustration that a similar system of anti-money laundering checks has not been introduced.

There is a feeling in the industry that the voluntary scheme, along with the lower tier of financial vulnerability checks already introduced and other measures from the 2023 white paper such as the cap on online slots stakes, should be enough to satisfy the wishes of both government and the commission.

The question is whether the Gambling Commission, having thrown so much effort into the quest to find a 'frictionless' system, will be prepared to think again if the evidence shows it cannot be done.  

Read these next: 

'They must be proportionate' - minister says she hears racing's concerns over 'frictionless' affordability checks 

'I think it's outrageous, it's a disgrace and it shows that the system isn't working' - punters' chief hits out over affordability checks farce 

How a punter with average losses of 4p a day got caught in an affordability check nightmare

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