The white paper – Proposals to update UK gambling legislation (VII)
We continue to publish extensive extracts from an important project subject to public debate by the British Government, the so-called White Paper.
By Dan Iliovici, Vice-President ROMBET
Benefits of gambling
Gambling can be sociable, can help tackle loneliness and isolation, can enhance the enjoyment of other activities, and can be a valuable pastime in its own right, although quantifying these benefits is inherently difficult.
There are also economic benefits to having a well regulated industry to service this demand.
The gambling sector also contributes significantly to other industries, including sport, advertising and racing. (…)
Gambling can also contribute to tourism, for instance to seaside towns across the country, or high-end casinos attracting wealthy overseas visitors who spend across a number of other sectors while in this country.
Additionally, some gambling products enable charities and other non-commercial organisations such as sports clubs to raise valuable funds.”
After this clarification, we continue the detailed presentation of the document.
Expected impact
42. The precise impact of these changes will depend on the details which the Gambling Commission will consult on shortly, including how operators are required to conduct the checks and how they respond to certain findings on customers’ financial circumstances. Based on data requested from industry by the Gambling Commission*1, under the proposed thresholds outlined above, we would expect around 20% of accounts to be subject to a financial vulnerability assessment, and around 3% of all accounts to be subject to an enhanced check in the first year the new measures are in place (this is explored further in the Annex A accompanying this white paper). We expect fewer accounts will trigger checks in subsequent years as some consumers will have already satisfactorily passed a check, but this will depend on the Commission’s consultation and the extent to which any future requirements include provisions for reassessing financial circumstances. The impact will vary for different operators by the makeup of their player base.
43. Industry and racing stakeholders have raised concerns that should checks require documents such as payslips or bank statements to be provided to operators, then most people would refuse and instead gamble elsewhere, including with unlicensed operators. Industry estimates based on previous trials are that between 70% and 90% of customers would not comply with requests for such documents to be shared. Their concern is that not only are those being harmed by gambling unlikely to be helped by such a measure, but also that many of those who were not being harmed would nonetheless be driven away from licensed operators.
44. We recognise this risk, 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. Further, it is our view that much of the foregone revenue is likely to be that which was coming from financially vulnerable customers or those who were gambling at significantly unaffordable levels, although this is hard to quantify.
45. Likely impacts are explored in more detail in Annex A of this white paper, and the Commission will consider impacts, including the potential for any unintended consequences, through its detailed consultation. The current proposals apply only to the remote sector, but in due course we want to explore the use of frictionless financial risk checks where appropriate in land-based settings to benefit operators and help protect customers.
Data sharing on high risk customers
46. While it is vital that individual operators have effective procedures to protect their customers from harm, online gamblers on average hold 3 gambling accounts and use 1.5 monthly*2. Further, almost a fifth of 18 to 34 year old online gamblers hold five or more accounts.
47. Customers’ ability to swap to another account risks undermining the effectiveness of an individual operator’s safeguarding interventions. For example, a person showing signs or disclosing that their gambling is out of control could have their account closed by one operator doing the right thing to prevent harm, but within minutes they could have a new account with a different operator and a ‘blank slate’. All stakeholders recognise the potential for a so-called Single Customer View (‘SCV’) to tackle this risk. However, there were an array of proposals for how this should be implemented.
Box 4: compliance case study
● Gambling Commission casework provides an illustrative example of how a SCV solution could enable more effective harm prevention. In a microcosm of the current system, one licensee allowed a customer to create 14 different accounts across the various domains operated under its licence before being detected. This customer lost £209,000 across these accounts without any safer gambling checks taking place.
● Individual licensees are required to have effective oversight over all the brands operating under their licences, but there is currently nothing to prevent a similar outcome for customers with accounts across multiple licensees.
48. While supportive in principle, industry initially had concerns regarding potential data protection and privacy implications. We are pleased progress has been made on these after the Information Commissioner’s Office confirmed*3 that, subject to certain controls, operators can share customer data for harm prevention purposes in compliance with existing data protection requirements. Following the ICO’s report, the government and the Gambling Commission challenged industry to start trialling solutions as a matter of urgency.
49. An industry-led trial with GAMSTOP as the delivery partner is now proceeding, having been supported by the ICO’s sandbox process, and focusing on high risk customers. The live trial which started this month is based on operators sharing information on individuals who have had their accounts closed because of disclosures about suffering serious harm. As part of the trial, codes of practice are being developed to ensure operators respond appropriately when they are notified of customers in this situation. Following evaluation later this year, the intention is to expand the system to consider customers who are showing other indicators of harm with one operator which might necessitate coordinated action with other operators.
50. Conversely, a number of think tanks and campaigners have proposed far more expansive SCV solutions, involving the pooling of every customer’s online and potentially offline play data for analysis by an independent public body which flags concerns and directs operator interventions. Given the privacy implications for the majority who gamble with no ill effect, we do not think the creation of such a system including a national database of all gamblers (even if anonymised) is justified at this time.
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*1 https://www.gamblingcommission.gov.uk/statistics-and research/publication/affordability-data
