Inside the UK Gambling Commission's New Risk Assessment Rollout | Ep. 811
In this episode, industry experts discuss the recent implementation of financial risk assessments by the UK Gambling Commission, exploring its implications, industry reactions, and future outlook.
Key Topics
- Implementation of financial risk assessments by UK Gambling Commission
- Industry reaction and concerns about regulation
- Details of phased rollout and thresholds for operators
- Impact on black market and player safety
- Evidence-based approach and data reliability in regulation
Host: Charlie Horner
Guests: Ted Menmuir & Joe Streeter
Producer: Anaya McDonald
Editor: Anaya McDonald
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Anaya McDonald (00:01.473) The UK Gambling Commission has confirmed that financial risk assessments will be rolled out following a consultation process. The Commission has described a carefully thought out, staged application of the processes and briefed this morning that the implementation will be staggered across aid groups and deposit amounts. So what will financial risk assessments look like and what will the fallout be? Welcome back to iGaming Daily, supported by Optimu, the creator of positionless marketing.
and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today to discuss all this with me is iGaming expert editor Joe Streeter and our editor at large, Ted Menmure. Joe, how's things?
Yeah, brilliant, Charlie. Obviously, I am thinking about the World Cup a lot at the moment, as are you, I'm sure. Some brilliant football. Obviously, we can't ignore England creeping through into the last eight. Yeah, exciting times. I've been gripped by it. Gradually have been more and more indoctrinated with World Cup fever. I'm all in now, I would say march through.
Screep 2, but okay. Ted, how are you? How's things?
Ted M (00:36.088) Good, good Charlie. And I've been gripped by financial risk assessments, FRAs, as of 11 o'clock this morning.
Anaya McDonald (00:41.899) Ted, you've got some extra points in the post there. Well done. That was the correct answer. Look, this is a huge story. This is something that we've been building up towards for, well, for years really. This was part of the white paper review and the gambling commission has briefed stakeholders on the implementation of financial risk assessments and it's now brought its statement live to the public. I'm kind of interested though by the process of
Ted M (00:48.236) Mm-hmm.
Anaya McDonald (01:10.783) briefing stakeholders beforehand, as far as I'm aware that's not something that's typically happened from the Commission on these kind of things. Why has the Commission decided to do this on, and be more transparent on this specific issue? Ted, do you have any insights on that?
Ted M (01:27.522) Yeah, I agree with you. It was a surprise. And this morning's brief on financial risk assessments has been long overdue. I think we have to remember that this is the headline protection of the Gambling Review's white paper. And in all honesty, it has turned into a fiasco with so much speculation surrounding its feasibility and its application and how checks will be processed.
This has not been helped by vague communications during the pilot phase. That should have been a lot clearer. And I don't know, I today's briefing I think should be welcomed. I think that the phase of probe starting on the high threshold of 5,000 pounds is a good way to bring the program from pilot phase into kind of a live environment for gambling operators to kind of settle into.
Also, the commission was clear that for once on why risk assessments are so crucial and so kind of precious and explained that the measure is there. It's designed to kind of target kind of high spend customers who may be facing vulnerability. I think to some extent, this breathing, at least the briefing will soothe anxieties, but there is still a long way to go.
After all, they haven't presented a definitive timetable and to me it leaves me wondering whether even as we go into the first phase of this phased approach with 5,000 net deposits over 24 hours, are we still, where are we and are we still in test mode?
Anaya McDonald (02:59.211) Joe, this is one of measures that comes with the most sensitivities. been used as a bit of a political football in the last few years. You were in the room, you were in the briefing. What were the vibes like amongst people in the briefing? yeah, what are your thoughts on that sort of openness and transparency with the commission? The vibes. But yeah, know what, credit to the GC for
you know, putting the meeting together this morning. I think it was a good thing, a positive step after, you know, what Ted described, some of the communication in the previous run up to the white paper, to the implementation and to the financial risk checks, risk assessments and the pilot scheme perhaps fell a little bit short. They wanted to kind of, I guess they wanted to kind of fix that this time and get things.
get things right and really ensure clarity in how things are portrayed and how things are written about when it comes to the next stage of FRAs. And this is a very, it's a very techy subject, right? It's very tricky. There's lots of nuances. Wording is in terminology is important. And I think they wanted to make sure that we kind of got that right. The message was got out there. Even things like,
just ensuring the difference between affordability and financial risk assessments. These aren't affordability checks. These are risk assessments. They're very different. And those small things that are easy to kind of miscommunicate, they're vital. And I think that's what the GC really wanted to get across this morning. And they also took questions, which I think is a good thing. Some of them weren't easy. So yeah, credit there. was...
It's never easy to do these things. your credit to Sarah Gardner for doing that. In terms of the vibe, you know, I think it's important to remember, right, this was journalists in the room largely, as opposed to operators or even players, the two parties that will be likely most affected by these changes. The vibes in the room were of kind of caution, I guess. And I think the wider industry vibes are
Anaya McDonald (05:22.79) There is trepidation about this. The GC has kind of sought to assure that the phased implementation will mitigate some of that nervousness and will also mitigate some of the leakage, the player leakage to the black market that is much feared as a result of these changes. The GC has kind of moved to assure that
of the cautious approach taken to the implementation of these assessments, that leakage can be stopped. As we know, a lot of those players have already shifted. That ship has sailed to the black market already. With more checks, will be nervousness. I think that's the wider industry fear.
The black market will get a boost off the back of this. But the GC did their best to kind of assure that because of the cautious approach, that's not going to happen. Okay, let's dig into some of the detail then, Ted. What has the gambling commission actually set out today as it brings this news to the public? What do we know about the implementation and the rollout of financial risk assessments?
Ted M (06:41.717) Okay, so let's break it down for the first time, this kind of a clear implementation roadmap and the commission, it confirmed that a phase rollout will begin with the largest operators and initial that will be set an initial 5,000 net deposit threshold of spend over 24 hours.
Okay, after a period of testing, has not been kind of defined yet, the final, the commission will move the program onto the final threshold of 1000 net spend over 24 hours and 3000 over 90 days for customers aged 25 and over. The lower threshold will stand for players under 25. The checks will rely on credit reference.
But the commission state that it really prioritizes credit references and credit data over players submitting bank statements, which Sarah Gardner said herself, she views that as an intrusive element.
And then finally, more importantly, there will be an initial enforcement and there will be no enforcement actions during this testing phase on operators who may, who could fail or to act on FRAs as a result of the regime kind of bedding in. However, the, uh, the commission continue maintains that all kind of KYC processes must be maintained by the operators or they will intervene.
Anaya McDonald (08:04.766) Yeah, absolutely. think it's important that there is a little bit of grace and acceptance on the commission side that this is going to be a transition and this is going to be, yeah, you know, a tough period for operators who are trying to implement this in a compliant way. Joe, I think a phrase that we've mentioned a lot, or the commission has referenced a lot throughout this entire process, has been taking an evidence-based approach to these things. And we know there was a very long consultation process and...
and an initial sort of testing phase, a bit of a pilot phase before this rollout. What evidence has the commission actually given us and laid out as to sort of the efficacy of financial risk assessments as it brings this to market? Yeah, this was somewhat of a point of contention between, you know, we had a backlash from the BGC and the BGC said that the
that the commission has not demonstrated that the data underpinning these checks is accurate, reliable, all consistent enough to support regulatory decisions. the gambling commission was questioned about this on the call as well about the kind of accuracy of the data. They stated, more from the BGC as well, they kind of said that it.
exposed inconsistencies in the information returned by credit reference agencies. But yeah, the GC kind of emphasized that no other measures offer the same quality of data or consistency. And they believe that the approach taken now will be more consistent with what was before.
And Ted, what do you make of the evidence-based approach that the commission has laid out? Do you think it's been open? Do you think it's something that they could potentially provide a little bit more detail on? How do you see it?
Ted M (10:16.492) Look, I've got to be reflective of the journey of this project since 2023. And my view is that the commission may have been just too rigid in the design and the framework and its overriding goals when it announced that it wanted, from the first consultation, it believed that financial risk assessment should be the main protection of the white paper.
And also in today's call, it kind of acknowledged that it faced kind of internal pressures or government pressures to actually go forward with the project. yes, financial risk can be a safeguard, but you have to be set kind of an accountable remit or they just become intrusive on the general customer. And also let's not forget that since May, there's been kind of this light checks application on 150 pound net deposits. And that's kind of added another
know, significant layer of compliance onto the operator to carry out. I think at the end of the day, it comes down to these kind of key words of evidence being intrusive. And look, again, no one wants to kind of provide documents or be kind of credit reference just to gamble.
And also I think that in terms of that the feedback given to the commission, it was extensive and very diverse on how FRAs could fail or could just become too kind of emboldened to actually become a protective measure.
I think that the BGC provided its response as Joe said and I don't know, mean again is this a point that where we kind of now close the book and move forward? I don't think they're going to go with that.
Anaya McDonald (12:04.169) I do kind of think that that needs to happen though. We do kind of need to close the book and move forward here. We do need to kind of as an industry affordability checks are coming and they do need to be embraced in some form. Talking on the pilot as Ted mentioned a large chunk of the operators that had that were part of the pilot that had the light touch affordability checks already had them in place and
There were also calls on the morning call and from the BGC to release the full pilot, to release all the details from the pilot. But the GC has kind of said that they can't release everything because of commercial limitations and stuff like that. OK, well, Joe, Ted, let's take a quick break and we'll come back and we'll talk a little bit about some of the industry reaction and we'll talk a little bit about some of the contentiousness around
things being frictionless. So, John is after the break.
Anaya McDonald (13:17.981) Welcome back to iGaming Daily. Now, we mentioned the BGC has responded to the rollout of financial risk assessments. Joe, how about you tell us a little bit more about what the Bettening Gaming Council said and some of its, I guess some of its challenges, I would say that it's provided. Okay, yeah, so interestingly, part of the call this morning,
it was said that the gambling commission kind of assured journalists that collaboration would continue and feedback would continue from the industry, even questioned on the BGC specifically. And they said they would continue talking to the trade body. They would continue to move to kind of remedy some of those fears that are so prevalent when it comes to financial risk assessment. But
The betting and gaming council did respond. Yeah, they just stated they were disappointed with the implementation, criticized the data being accurate. And also quite importantly, they said that they...
They called for kind of outstanding questions to be resolved around reliability and consumer impact and also how these things will operate in practice. And I think that's a big one. How they how they will operate in practice and whether they can continue to be frictionless. Yeah. Do you you pick up similar similar sort of noises from the industry in terms of that reaction in terms of.
how it will impact consumers and how it will impact, I guess, margins as well, in terms of maybe the channelization and people going towards the black market. What sort of sounds are you hearing from the industry in terms of reaction?
Ted M (15:21.943) From speaking to people at the technical level, low-overseeing compliance, custom safeguards, I think we've just reached that point of the debate where something has to give in how we move forward. In some cases, the clarity does help today. I don't know how, actually...
some leaders will look at kind of the BGC's response. mean, maybe, look, they have, this has been in discussion for three years. And I think as Josh said, there is kind of some form of acceptance that has to be given and some form of leeway that has to be given to the UKGC as the governing body. To me, the main...
question or the main concern here is how the accountability is changing onto a high-spend customer which is a very very unique player. I think Joe actually asked the question about you know every operator having kind of diverse portfolio of players and how are the UKTC building kind of an accountability or protections for all-around protections for that consumer.
The high spend, high value players don't play like the general public. They play specific games, they're accustomed to their likings. And if they don't get that, they're more kind of susceptible to go and play in the black market and checks might become a further burden.
Anaya McDonald (16:47.634) Yeah, it's a really valid point, Ted, and I think it might be a little bit of a flaw with this initial process where we're, you know, only kind of seeing a starting point with the larger operators that will be kind of more, more have the ability to kind of weather these types of checks. Whereas when you go to kind of mid-tier, eye-gaming operators that's, you know, specifically in, you know,
Ted M (17:00.129) Mm-hmm.
Anaya McDonald (17:15.972) a certain type of slots or something that's niche, this might become a little bit more challenging, especially when you consider just how much kind of online casino trends are different to sports betting trends. The two kind of don't translate into the same affordability checks really. think one of the biggest points of contention throughout this entire process has been the idea of, how can you ensure that?
these checks or these assessments are frictionless. And I think one of the things we've heard from the gambling commission is that this won't be, you know, submitting financial statements or bank statements, et cetera. It'll be more going through the credit reference agencies. So has the gambling commission sort of provided any more detail about how you can ensure that that still remains a frictionless process in terms of
Do players want to feel like they have to go through a credit reference agency just so they can put a couple of acres on a weekend, for example? Ted, what assurances has the Commission given on the frictionless debate?
Ted M (18:29.535) Well look, the Commission, and again as Joe said, this is where the wording counts, right? And the Commission repeatedly stressed that the industry has to change its view and stop calling this affordability checks.
This is about financial vulnerability and actually kind of intervening on customers who show signs of distress. also one of the, but actually one of the things that it admitted is that even in the kind of credit referencing, it's looking for kind of debt, banking, those signs of like the player is not, is wagering beyond his means.
The other point here is that he talked about kind of intrusion and like this not being kind of an excessive check on towards the customer. The regulator made it clear that the FRA does not automatically mean that an account is restricted or closed. Operators are considered to make a proportionate intervention and it's actually down to them to actually intervene on the customer once the FRA is processed.
Anaya McDonald (19:36.445) I think that's a really important point, especially as we're kind of listing priorities. And one of those priorities is to ensure that once these checks are made or once there's an interaction with the player, they aren't sent to the black market. They don't get extradited or strut the black market by kind of being a little bit flexible and enabling operators to use the toolbox to intervene rather than just
put a blanket ban on somebody gambling and just stop somebody gambling from there. I think you do kind of implement a safeguard from players just being shunned to the black market. And also Charlie, I'll pick you up on something you said, know, do players want to go to a credit agency before they can place an ACCA? My understanding is that a large
know, players won't be going anywhere. will be the operators that go to these checks will all be running in the background. Whether players still see that as something of an intrusion on their privacy. I don't know that there probably will be a type of player that does not like even that, even though it's kind of behind closed doors, doesn't like that level of intrusion. But that isn't a
burden on the player that in many ways is still frictionless, right? That key word. I guess it is frictionless. I wonder whether players find it intrusive. is a distinction there. Okay, let's bring things to a close now because this is a huge debate and it's something we could probably talk about all day, but we all have...
other big stories to be reported on I'm sure. Do we get the sense that we are moving forward in any sort of direction here, Ted? I think there's a general acceptance that something needs to happen on financial risk assessments because it was such a big part of the white paper, but are we moving forward? Is there any consensus? Can there be any consensus?
Ted M (21:46.252) I mean, you said you could talk about this all day. No, thank you. But on reflection, I just I don't think any camps are giving way here. look, to me, it's going to it's going to see how the test unfolds and how it unfolds in a live environment.
Anaya McDonald (21:47.748) Hehehehehe
Ted M (22:10.727) Also, the pilot, I mean, how the program has actually tested itself, taking into account the realities of being in online betting and online gaming. How would it follow through in a period of a high activity such as a Cheltenham, a World Cup quarterfinals against or semi-finals against Argentina. There are so many kind of variables that are gonna come into play and look.
I won't be surprised if we reopen this again, maybe factoring in a more risk-based approach that the BGC want, go back into communications with the operator to see what is feasible. This is just a huge concern on the future of the upper limit of players and player engagement in UK gambling, and it's such a precious area.
This is just gonna continue and continue.
Anaya McDonald (23:09.127) Yeah, I'm not 100 % sure when this is going out, but I'm pretty sure it's before the England quarterfinal with Norway and Ted's already put us in a semi-final with Argentina. yeah, touch wood. Go to send your hate mail to Ted if we go out now because he's put the kiss of death on it. But yeah, I kind of agree. There's not really too much of an acceptance. We kind of get in there kicking and screaming maybe, but
One of the interesting kind of notes on the call this morning was that the GC said that this had government approval, this was a white paper proposal, and then they made it clear that they have the approval of the government today also. in terms of political disruption, seems like the coast is clear there, the avenue is clear there, and I do feel like this will progress.
The industry kind of just has to get on board with this in some way and embrace the affordability bogeyman, I guess. Well, I think this debate is going to rumble on. I think that's safe to say. So we'll continue to report on all developments with the rollout of financial risk assessments and bring you all the biggest news on iGaming daily. But for now, Ted, Joe, thanks ever so much for coming on and explaining everything today. Really appreciate your time. Thanks to Optmoo for supporting the show, as always.
and to our listeners, thanks for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.