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

Three days before the start of a pilot on controversial financial risk checks is due to start, the Gambling Commission has attempted to give more insight into what the aims of the six-month trial will be, and how it intends to measure whether the checks can be frictionless for what it claims will be the vast majority of customers.

But a leading analyst described the update from the commission as "lacking in detail and transparency", while in welcoming the latest statement the BHA said it still raised "several questions", notably around what level of spend will be tested during the pilot. 

Back in May the Gambling Commission first earmarked August 30 for implementing both what it describes as the "light touch" financial vulnerability checks, and the six-month pilot for potentially more invasive financial risk checks, the combined effect of which British racing's leadership estimates could wipe £250 million from the sport's revenues over the next five years. 

Few details were given at the time as to how success for the pilot scheme would be measured and, despite repeated requests from stakeholders within both the racing and gambling industries, it has taken until the week that the scheme starts for the commission to give a meaningful update. 

Helen Rhodes, the Gambling Commission's director of major projects and evaluation, reaffirmed in a blog post on Tuesday that the pilot would use live data, but would not have any consequences for customers of the operators who participate.

Rhodes added that two aspects of the claim that checks will be frictionless will be tested during the pilot; that the data provided by credit agencies and CATO banking checks (current account turnover checks) can provide an answer for the commission's stated aim of 80 per cent of cases, and that the agencies can do so in a timely manner.

A BHA spokesperson said: “We welcome the Gambling Commission's blog on the financial risk assessments pilot commencing on Friday. We are encouraged that the pilot is not a live test and have been assured by the commission that racing bettors will not be affected while it is taking place. 

“The blog however raises several questions, including about what spending thresholds will be tested during the pilot phase. It is therefore important that the commission provides more detail on how the pilot will be evaluated including how success will be measured and by what metrics. 

“It is also essential that the pilot is transparent and answers the questions posed by the Gambling Commission in order for the public to have confidence that financial risk assessments can be fully frictionless. It is imperative that the commission shares publicly the full results of the pilot on its conclusion next spring, and that it works closely with the DCMS, betting operators, bettors and wider stakeholders on evaluating the results before any further decisions are made on financial risk assessments.” 

And it is in the questions that Helen Rhodes posed in the blog under the headings of "data relevancy and accuracy" and "implementation issues" that Dan Waugh of Regulus Partners detected a lack of detail, as well as expressing concerns over the absence of research or oversight independent to the commission.

Rhodes said the pilot will seek to determine whether the credit ratings agency results can achieve the aim of highlighting those at risk of suffering potential gambling harm, how the data can be presented to betting operators, and how the companies can then build those results into their existing customer interaction processes. 

"In terms of the practical implementation and how meaningful the credit reference agency ratings are and how accurate they are, we’re not going to learn anything," said Waugh.

"They’ve basically said they’ll look at these questions without saying how, and using what criteria. What are the data points you are going to be looking at?

"I think on those points, that is where proper external and independent researchers would be helpful. There’s potentially a high degree of subjectivity in answering those questions, and they are the most important in understanding this."

During the pilot the agencies will return to betting operators a red, amber or green rating for the level of risk that a customer will experience given his or her financial status and the proposed level of gambling spend.  

Waugh said: "Can these credit reference agencies provide meaningful analysis? Far more detail is required in saying how these two questions are going to be evaluated, and far more transparency is required.

"And it has the potential for some fairly catastrophic consequences, as well intentioned as it might be, so I would have hoped for something that was far more extensive and which posed the question ‘What is the likely effect of running these checks?’.

"Because we simply don’t know, the commission doesn’t know and the DCMS doesn’t know. And there are legitimate fears the commission and the DCMS have underestimated how damaging this could be. It’s not a pilot of affordability, it is very much more limited than that." 

Light touch checks, which will look at publicly available data for signs of financial vulnerability, also come into force on Friday.

For the first six months they will be triggered when customers deposit £500 or more in a month, although that figure will come down to £150.

Read this next:

Lessons from Asia need to be heeded by politicians and regulators in the UK 

The Front Runner is our unmissable email newsletter available exclusively to Members' Club Ultimate subscribers. Chris Cook, the reigning Racing Writer of the Year, provides his take on the day's biggest stories and tips for the upcoming racing every morning from Monday to Friday. Not a Members' Club Ultimate subscriber? Click here to join today and also receive our Ultimate Daily emails plus our full range of fantastic website and newspaper content