The industry's response to the Gambling Commission's recent proposal for Financial Risk Assessments (FRAs) for a targeted group of high-spending online gamblers has been notably critical. This phased rollout aims to monitor those who exceed a net deposit of £5,000 within a 24-hour period, as revealed on Tuesday.
According to the Commission, these assessments will be conducted by credit reference agencies (CRAs) with a design intended to be both "frictionless" and devoid of documentation, explicitly stating that customers' credit scores will not be affected.
However, concerns about data accuracy have arisen. Chris Elliott, a partner at Wiggin, acknowledged the phased approach as "pragmatic and sensible" but expressed skepticism over the Commission's ability to resolve data inconsistencies that emerged during pilot testing. In his analysis of the Commission's statements, he pointed out that issues with differing outputs from various CRAs remain unresolved, despite the Commission's aware of the problem last year.
Melanie Ellis, a partner at Northridge Law, echoed these concerns, stating, "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 further highlighted the potential negative impact on the industry's gross gambling yield (GGY), warning that financial assessments could lead not only to reductions from financially distressed customers but also from those hesitant to provide financial records or undergo open banking checks. "The Commission's announcement does nothing to assuage that concern," he said.
He further stressed the need for the regulator to issue clearer guidelines on appropriate operator actions, questioning whether compliance assessments might inadvertently impose expectations linked to the FRAs.
Ellis noted that the Commission's commitment not to enforce compliance during the initial phase may indicate an acknowledgment of the industry's concerns. However, she anticipated that much would ultimately be left to individual operator discretion.
Opposition to the FRAs includes the British Horseracing Authority, which previously cautioned against their introduction due to the significant impact on the sector. CEO Brant Dunshea criticized the FRAs as "self-harm on an immense scale," pointing to potentially severe financial repercussions for British racing and the economy at large. He labeled the checks as "severe" and likely to lead to excessive intrusion for racing bettors, raising doubts about the Commission's assurances of frictionless implementation and warning of increased risks of customers being driven to the illegal market.
Dunshea urged the Commission to address identified inconsistencies in CRA outputs and to offer concise guidance to operators to avoid overly cautious execution of the new measures.
Louie French MP, the shadow gambling minister from the Conservative party, passionately denounced the introduction of FRAs as a "dereliction of duty." He stressed the numerous concerns raised by MPs earlier this year and called on the government to present these policies to Parliament for comprehensive debate concerning the implications of affordability checks on gamblers and British sport. "This dereliction of duty is disgusting by the government," he emphasized.
