Annex: Financial risk checks

Threshold Process Components White Paper Principles
£125 net losses in any rolling month

 

OR

 

£500 net losses in any rolling year

 

“Net loss” = the loss of deposited money and does not include the loss of re-staked winnings

 Financial vulnerability check Open source indicators, such as County Court Judgments, average postcode affluence, and declared bankruptcies Checks should ‘involve unintrusive checks at moderate levels of spend to help identify particularly financially vulnerable consumers’

‘Given that most gamblers are not spending more than they can afford or otherwise experiencing harm, we are mindful that theses need to be proportionate’[1]

‘These checks should take seconds to process and be frictionless for the consumer’

‘Only around 20% of accounts in a calendar year will trigger this check’.[2]
Action If check raises concerns and ‘no robust evidence to the contrary can be provided’, operators will need to respond accordingly, including by taking a ‘range of actions’, depending on the risks identified and the customer’s broader risk profile ‘This will be considered further in the Gambling Commission’s forthcoming consultation.’
£1,000 net losses in a rolling 24-hour period

(halved to £500 net losses for customers aged 18-24)

 Enhanced spending check Access to ‘more personalised data’ which ‘provides much greater insight into a customer’s financial situation’, including by considering factors like discretionary income.

Expectation set that such checks would:

  • involve credit reference agencies
  • not interrupt the customer journey ‘unless the check raises concerns’
  • provide an overview of pertinent financial data (e.g. overall disposable income), rather than providing all the raw financial data to operators
  • only involve the collection of information from customers as a ‘last resort’
 ‘Such rapid losses are highly unusual and exceed the discretionary income nearly all people likely have available for a day’s activity, so are therefore highly indicative of risk’[3]

‘While self-certification can have a role in customer interaction (not least in encouraging customers to reflect on their spending at appropriate moments), it is unlikely to be an adequate basis for a thorough and accurate risk assessment, especially as those being harmed by gambling might be less willing to provide transparent or externally verifiable information’

‘We recognise…the chilling effect which asking customers for bank documents can have, and that implementing a financial risk-based approach will come with costs to operators. However, we think the impacts are likely to be mitigated by the proposals outlined above which mean no financial risk checks would be required for around three quarters of accounts, most of the checks will be frictionless with little interruption to the customer journey (for instance with credit reference or open banking data replacing the need for documents), and the provision of documents by the customer will be only a last resort for the highest spending minority…’
Action Informed assessment of whether a customer’s level of spend is ‘likely to be harmful to them’.

A ‘range of operator responses’ may be appropriate, depending on findings and the wider risk profile, including ‘applying limits to an account or ending the customer relationship completely where there are serious concerns.’

 ‘Neither the government nor the Gambling Commission will set universal rules on what proportion of a customer’s income they should be permitted to gamble, but the intention is that these checks should be used to detect and prevent harm alongside all the existing obligations to consider a range of indicators of harm.’

‘The specific thresholds and proposals below are based on the premise that frictionless checks will facilitate operators gathering the necessary information without disruption to the customer experience, for instance through needing to ask for payslips or bank statements as some operators do now.’

‘New requirements will not come into force until such a time as they are ready.’

‘The details of the expectations on operators will be explored through the Commission’s forthcoming consultation.’
£2,000 net losses in a rolling 90-day period

(halved to £1,000 net losses for customers aged 18-24)

 Enhanced spending check As outlined above.

An expectation is set that, alongside assessing the risk of harm, this check will give an opportunity to operators to fulfil their wider KYC obligations, for instance by considering customers’ source of wealth and whether that presents any additional risks, for instance if it may be linked to money laundering or other crime.

 As outlined above.
Action Informed assessment of whether a customer’s level of spend is ‘likely to be harmful to them’.

A ‘range of operator responses’ may be appropriate, depending on findings and the wider risk profile, including ‘applying limits to an account or ending the customer relationship completely where there are serious concerns.’

 As outlined above.

 

[1]White Paper, para 35, p. 40.

[2] White Paper, Box 3, p. 42.

[3] Ibid., para. 7, p. 142.