The response from the gambling industry has been swift following the Gambling Commission's announcement about introducing Financial Risk Assessments (FRAs) for certain online gamblers classified as "higher-spending." This rollout will take place in phases.
Stakeholders, including legal professionals and politicians, have raised concerns regarding unresolved data inconsistencies present in the FRA process. On Tuesday, the regulator outlined that FRAs would be triggered for individuals exceeding a £5,000 net deposit within a 24-hour timeframe. These assessments will be performed by credit reference agencies (CRAs) and are purportedly designed to be both "frictionless" and devoid of documentation, with no impact anticipated on the customers’ credit ratings.
Some industry experts view the phased approach positively, yet they question the Commission's capability to tackle the data inconsistencies identified during the FRA pilot testing. Chris Elliott, a partner at Wiggin, described the approach as "pragmatic and sensible," but he pointed out that discrepancies in outputs from different credit reference agencies remain unaddressed, a concern that the Commission itself acknowledged last year.
Melanie Ellis, a partner at Northridge Law, echoed these sentiments, highlighting the unreliability of data provided by CRAs. She noted, "Questions remain about the reliability of credit reference agency data, with the issue of different agencies returning different results for the same customer apparently still unresolved."
Elliott has urged the Commission to provide further evidence supporting its claims regarding FRAs reducing gross gambling yield (GGY) for operators. He articulated that the industry fears that the decline in GGY will not only affect those facing financial distress but also customers who resist financial scrutiny and choose to decrease their spending or shift to alternative options.
He remarked, "The Commission’s announcement does nothing to assuage that concern."
Furthermore, Elliott has called for the Commission to clarify its expectations regarding operator actions. He questioned whether the enforcement of customer interaction requirements would gradually impose expectations related to FRAs.
While acknowledging the Commission's indication that it won’t take enforcement actions against non-compliant operators initially, Ellis noted that much discretion seems to be left to operators. "We must await further guidance promised by the Commission," she added.
In opposition, the British Horseracing Authority (BHA) has vehemently criticized the introduction of FRAs. CEO Brant Dunshea warned of significant negative consequences for British racing and the broader UK economy, labeling FRAs as a measure of “self-harm on an immense scale.” He highlighted the intrusive nature of the checks for bettors, suggesting they could inadvertently push customers toward illegal gambling options.
Dunshea urged the Commission to resolve the inconsistencies in CRA outputs and to issue comprehensive guidance to operators to prevent overly cautious implementations.
Further backlash came from Conservative Party shadow gambling minister Louie French MP, who denounced the introduction of FRAs as a "dereliction of duty." In a video shared on LinkedIn, he urged that the policy be brought before Parliament for a cross-party debate addressing the impacts of affordability checks on gamblers and British sports. He condemned this lack of action by the government as "disgusting."
Overall, the gambling industry stands divided, grappling with the implications of FRAs and pressing for clarity amidst concerns over data reliability and the potential economic fallout associated with new regulations.
