The white paper proposes two thresholds for conducting affordability checks. The first threshold is called the “moderate loss threshold,” which involves checking for financial vulnerability indicators, such as county court judgements, average postcode affluence, and bankruptcies, if a net loss of £125 occurs within a rolling month period or £500 within a rolling year period. The second threshold is triggered by “binge gambling,” which involves a net loss of £1,000 within a 24-hour period and requires an “enhanced spending check.” The Gambling Commission is working with the financial services sector to determine the mechanics of this check, which is expected to involve credit reference agencies and only raise concerns if necessary. However, if frictionless checks fail to provide sufficient information, data may need to be collected directly from the customer.
The Gambling Commission plans to consult on the proposed thresholds, including a £2,000 net loss threshold within a 90-day period that triggers the same checks as a £1,000 net loss in a 24-hour period. The proposed thresholds are less strict than the previously proposed £100 loss limit and hard checks.
According to the white paper, 20% of accounts would be subject to a financial vulnerability assessment, and about 3% of accounts would be subject to an enhanced check. The government expects credit reference agencies to conduct the financial vulnerability assessments in a “frictionless” manner, and 80% of the enhanced checks can also be handled in this way. The remaining 20% of cases will require further checks, with half of them being “semi-agreeable checks,” such as open banking, and the other half being “disagreeable checks,” such as requests for bank statements or payslips.
The Racing Post’s Big Punting Survey found that one in six respondents had already been asked to undergo an affordability check. While the white paper claims that the proposed checks will be “frictionless,” the precise mechanics of how they will work have not been fully determined, potentially leading to higher-staking bettors receiving requests for sensitive financial information.
The white paper discusses levy reform and states that the government recognises the value of the racing industry and has already begun reviewing the central funding system, with the goal of completing it by 2024. The government estimates that the proposed financial risk protections for online betting on racing could lead to a six to 11 percent reduction in levy yield, resulting in a total income drop of 0.5 to 1 percent (£8.4-14.9m) for the racing industry. In response to representations from the industry, the government is considering extending the levy to all international racing bets made by British customers and changing it to a percentage of turnover, rather than profits.
While the commitment to levy reform is not new, the industry will appreciate the government’s acknowledgement of the sport’s cultural and economic importance, as well as the proposed extension of the levy and adjustment to a percentage of turnover, which could lead to more stable yields. However, these proposals may only offset the expected reduction in yields from other measures outlined in the white paper, and the government suggests that Levy Board reserves may need to be used to address any funding gaps the industry may face in the meantime.
The white paper addresses the issue of free bets and the need for clear rules and fair limits on their design and targeting to prevent excessive or harmful gambling. The Gambling Commission has already strengthened restrictions on online VIP schemes and introduced rules to prevent marketing targeted at people showing significant indicators of harm. The Commission will now review the use of incentives such as free bets and bonuses.
The white paper cites a Commission survey showing that a significant number of respondents believed that free bets and bonus offers encouraged them to gamble more than they wanted to. However, the evidence on the correlation between these incentives and harm is limited, and the government is calling for a greater evidence base.
The white paper also notes that re-wagering requirements for free bets are often set at high thresholds, and funds and winnings can expire after a short time, creating a sense of urgency to gamble. The Commission will consult on caps for wagering requirements and minimum time limits before offers expire.
The white paper outlines the Gambling Commission’s plans to consult on measures to give bettors more control over the types of marketing they receive, such as the need to opt in for bonuses. The use of technology by betting operators to target ads away from children and vulnerable people will also be encouraged, and there will be an emphasis on stronger messaging regarding the risks associated with gambling. Additionally, the government plans to work with governing bodies in the sector to develop a cross-sport gambling sponsorship code.
While some may be disappointed that the measures fall short of a complete ban on gambling advertising and sponsorship, the government’s aim is to place incentives such as free bets and bonuses in the hands of the punters. By requiring opt-ins, individuals who are more vulnerable to gambling-related harm are given greater protection against receiving incentives they may find difficult to resist. Further campaigning may still focus on a complete ban on gambling advertising and sponsorship.
Single Customer View
The white paper highlights the start of a live trial for a Single Customer View (SCV) system, aimed at preventing customers from losing unaffordable sums by sharing information across different gambling operators. The trial, which began this month with the help of GamStop, is focused on high-risk gamblers, with codes of practice being developed to assess whether the SCV system is identifying the right people and appropriate measures are being taken by bookmakers.
The government’s stance on the SCV system is clear – it expects the industry to deliver on this solution. However, the white paper indicates that the government and the Gambling Commission may reject the trial if they are not satisfied with its results and create their own alternative. The possibility of a further consultation before full implementation is also suggested.
The proposal for a national database of gamblers has been rejected due to privacy implications for the majority who gamble without any adverse effects. This acknowledges the fact that many punters may not want their data to be shared.
The white paper announces the government’s plan to introduce a mandatory statutory levy to be paid by gambling operators and collected and distributed by the Gambling Commission. The levy will fund research, education, and treatment of gambling harms, and a consultation will be launched to determine the details of its design, including the total amount to be raised and how it will be proportionately and fairly constructed.
Although the power to create such a levy has existed since 2005, the government notes that no previous administration has used it, and the industry has provided financial support on a voluntary basis. However, the government now believes that a mandatory levy is necessary for long-term funding certainty, despite opposition from the betting industry. The Gambling Commission will also have an enhanced role in directly commissioning research to inform regulation, and efforts will be made to stimulate independent research in the area of gambling.