UK GAMBLING ACT WHITE PAPER
customers, including financial risk (formerly known as ‘affordability’) checks, online slot stake limits, safer online slot design, and increasing the uptake of player-centric safer gambling tools (such as mandating the use of deposit limits). The white paper also states that the Commission will review the design and targeting of customer incentives to ensure they do not ‘encourage excessive or harmful gambling’. The real impact of these policy proposals is difficult to predict. While the Government seeks to strike a balance between consumer protection and consumer freedom and has produced in many respects more ‘business friendly’ proposals than many critics had advocated for, much of the detail is to be determined through public consultation, which could produce a range of potential outcomes. Some of the most significant proposals are those around financial risk checks and stake limits, which we will now look at in more detail. Financial risk checks The white paper proposes a consultation on a prescriptive model to tackle three key ‘affordability’ risks previously identified by the Commission: binge gambling, significant unaffordable losses over time, and financial vulnerability. The proposals include ‘financial vulnerability checks’ (using information from public sources) at £125 net losses within a rolling month or £500 net losses within a rolling year, and ‘enhanced spending checks’ (which would require access to more detailed personal data) at net losses of £1,000 in a rolling 24-hour period or £2,000 net losses within a rolling 90-day period. These proposed monetary triggers would be halved for 18–24 year olds. The white paper suggests that most checks will be ‘frictionless’ and unintrusive, with any requirement to obtain documents from customers to be a ‘last resort’; though whether this is achievable in practice remains to be seen. The white paper adds that neither the Government nor the Commission will set universal rules on what proportion of a customer’s income they should be permitted to gamble. Some anti-gambling groups had lobbied for more extreme measures – some, for example, advocated for ‘affordability’ checks with a cap of £100 which would be overseen by an independent ombudsman. On the other hand, others would question whether it is necessary and proportionate in a democratic society for the State to require some form of monitoring in relation to the leisure pursuits of adults.
The proposals do at least introduce a degree of certainty. The Commission has previously sought to hold the industry to largely undocumented ‘affordability’ standards. This has presented huge challenges to operators and resulted in inconsistent regulatory enforcement outcomes, which many view as unfair. In that sense, the proposals appear to temper the Commission’s current direction of travel with regard to ‘affordability’ checks, particularly as many operators have already implemented basic checks at lower levels of spend. However, the ‘enhanced spending check’ has the potential to have a significant impact both on revenues and consumers. While the Government asserts that most customers will not be impacted by such checks, the backstop check at £2,000 net losses in a rolling 90-day period clearly has the potential to impact more than just ‘VIP’ customers. The outcome of the Commission’s discussions with the financial services sector, and of its consultation on potential safeguards for the use of open banking protocols, will be of critical importance in establishing how such checks might work, and whether they really can be seen as ‘unintrusive’. The Government has assessed the impact of financial risk checks as potentially reducing online slots GGY by 6-11 percent, but in doing so has assumed that 80 percent of ‘enhanced spending checks’ will be frictionless. If truly frictionless checks are not feasible, this policy proposal is likely to have a far more significant impact on the customer experience, and, consequently, GGY. While these checks are intended to enhance the protection of vulnerable customers, experience shows that many customers are unwilling to hand over bank statements and other personal information to operators, and even if they do, blocks are likely to be required unless they can clearly afford ‘enhanced’ spending. There is therefore a real risk of a race to the bottom where customers increasingly decide to use unregulated operators. That these are likely to include many of the most vulnerable customers is all the more concerning. Stake limits There are currently no statutory limits on stake sizes in the online gambling sector. Conversely, gaming machines in the land-based sector are subject to stake and prize limits. Currently, the maximum stake is £5 for category B1 machines (available only in casinos), and £2 for categories B2 and B3. A number of vocal commentators have lobbied (and continue to lobby) for online slots to have a fixed stake limit of £2.
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IMGL MAGAZINE | JULY 2023
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