British Gambling Commission hails better-than-expected results in financial risk assessment pilot
The second stage of the regulator’s ongoing pilot saw an improvement in the rate of “frictionless” checks
UK.- The British Gambling Commission has published an update on its ongoing pilot of financial risk assessments. Written by director of major policy projects Helen Rhodes, the update focuses on Stage two of the pilot and the issues being explored in the third and final stage.
In the second stage of the pilot, approximately 1.7 million financial risk assessments were conducted across three credit reference agencies in relation to approximately 860,000 accounts. Rhodes says this increase from stage one was due to the design of stage two and is not indicative of how many accounts might be assessed in a live environment.
The proportion of assessments conducted without friction, which means without the player noticing, was 97 per cent. That’s an improvement on 95 per cent in the figures from the first stage of the pilot reported in February. Both figures are above the 80 per cent that was estimated in the UK government’s 2023 Gambling White Paper.
The “thin file” rate – that is, the number of cases where the customer could be identified but there was limited information and no adverse information, remained at around 3 per cent. Some 3 per cent of assessments were not matched, down from 3 per cent in stage one.
The Gambling Commission concluded that if the thresholds proposed in its 2023 consultation are introduced, stage two findings suggest an estimated 0.1 per cent of accounts, or one in 1,000, would require a non-frictionless assessment.
It said: “We are beginning to understand more about the financial risk profile of the customers who met the thresholds for the pilot. Two credit reference agencies shared data to indicate that the customers who met the thresholds for the pilot where they conducted assessments were more likely to have one of the direct risk flags on which operators are permitted to receive data in comparison to their separate wider UK populations.”
The results vary across operators, with customers in the pilot cohort between twice and four times more likely to have a debt management plan and between twice and five times more likely to have a default in the last 12 months than the type of consumer in their comparison UK populations.
NatCen continues to work as the Gambling Commission’s evaluation partner for the pilot and post-pilot analysis work, and the regulator clarified that the pilot is not in a live environment.
Data-sharing for stage three of the pilot completed on April 30, and this final phase is now at reporting stage. The Commission is using stage three and post-pilot analysis to explore how the assessments could be targeted where there is most financial risk. “We will also explore how any unnecessary inconsistency between credit reference agencies could be reduced and how operators could be supported in any future implementation,” it said.
Rhodes said: “These further findings from the pilot have helped us understand the extent that assessments could be conducted in a frictionless manner. Building on our staged approach to the pilot, we will now further explore data consistency across credit reference agencies, as well as how to support operators to identify the severity of financial difficulties that a customer may be experiencing and how they could support these customers.”
The Gambling Commission is proposing financial risk assessments for online gambling as a way of identifying high-spending customers who may be in financial difficulties. It insists that the mechanism isn’t the same as “affordability checks” since the financial risk assessments would be “a much more targeted way of identifying potentially financially vulnerable customers”. They would also not affect a customer’s credit score if they were introduced in the future, it said.
