The Gambling Commission (GC) has today confirmed that it will be introducing Financial Risk Assessments (FRAs) in stages to identify customers in financial difficulties. The GC also states that FRA’s will “…streamline and improve operator processes.”
Within its article the GC says there is evidence that high-spending customers are more likely than the general population to have debt management plans and are between two and five times more likely to have a payment default in the previous 12 months. The GC asserts that “without being identified, they may continue to receive marketing and promotional offers encouraging further gambling despite being financially vulnerable.”
The new system is intended to reduce reliance upon some of the document-based affordability and financial checks currently used by operators. Instead, most assessments will be carried out through credit reference agencies using a “frictionless”, document-free process that does not affect a customer’s credit score.
According to pilot results, 97% of customers above the relevant spending thresholds could be assessed easily and frictionlessly, exceeding the 80% assumption used in the 2023 Gambling White Paper. Less than 3% of accounts would require an assessment and fewer than 1 in 1,000 accounts would be unable to undergo a frictionless check
The first stage will have FRA’s undertaken by the largest operators and focus on “…high spend of multiple thousands of pounds over a 24-hour period.” For most customers, a check would be triggered by net deposits of £5,000 within a rolling 24-hour period, a level reached by fewer than 0.5% of customers. Further stages will be developed following engagement with operators, credit reference agencies and other stakeholders.
The GC emphasises that the vast majority of gamblers will never be subject to an FRA. Occasional gamblers, recent winners and even many regular customers spending hundreds of pounds are unlikely to require a check. The aim is to identify customers in significant financial distress and ensure they receive appropriate support while reducing unnecessary friction for other consumers.
The GC has also confirmed that, “…during the early stages of implementation, no enforcement action will be taken on a failure to act following a Financial Risk Assessment, though operators are still subject to all other existing licence requirements which must be met, and in relation to which action may be taken.”
The timetable for stage one will be confirmed by the GC once engagement with industry and stakeholders has been completed over the summer.
For further details please see the GC article here.
For more information, please feel free to contact any of our licensing solicitors on 0115 953 8500.
