Gambling at risk of payday trap Gambling operators are risking heavy fines and aggressive regulatory action if they do not tighten up consumer checks
David Wylie, Managing Director of LendingMetrics, fears many gambling companies are underestimating the impact tougher regulation will have on the industry, which sees uncomforta- ble parallels with payday lending. David Wylie said: ‘When I talk to gam- bling operators today, I am reminded of conversations I had with payday
lenders back in the early 2010s. They had successful businesses, but they did not see the massive effect regulation was going to have. Poor consumer suitability checking basically led to a large number of them going out of business. They experienced a sort of double whammy - a regulatory crackdown and a sudden explosion of mis-selling claims.’
Mr Wylie says too many gambling operators are failing to conduct ade- quate suitability checks on consumers, leaving them vulnerable to a similar reg- ulatory and consumer kickback. ‘The common denominator is inadequate affordability and suitability checks. The payday industry failed to invest in this area when it should and paid the price, and gambling operators are now in a
08 | Metrics Monthly
March 2020 | AU Edition
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