Financial Risk Assessments for British gamblers to get staged introduction, regulator confirms
The largest UK gambling operators will have to introduce Financial Risk Assessments in the first phase of a two-stage implementation.
UK.- After a pilot project that caused much debate and industry opposition, Britain’s Gambling Commission has announced that it will advance with the introduction of Financial Risk Assessments for gambling (FRAs) in two stages. It says the phased approach will allow time to improve processes while starting to identify customers in financial difficulties.
The first stage of implementation will see Financial Risk Assessments carried out only by the largest gambling operators in cases where there is high spend over a 24-hour period. For most, this will mean a £5,000 net deposit in a rolling 24-hour period, the regulator said.
During this stage, the Gambling Commission will work with gambling businesses, credit reference agencies and other stakeholders to “refine the assessments, develop guidance and support proportionate implementation”.
The regulator says that for the small proportion of customers that may require support, it will “back operators to take appropriate proportionate action, considering everything they know about the customer and using all options such as reducing marketing to vulnerable consumers, supporting customers to set deposit limits or more where needed”.
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.
In a second phase, Financial Risk Assessments will be applied to customers aged 25 years or older with net deposits exceeding £1,000 in a rolling 24-hour period or £3,000 over a rolling 90-day period. For those aged under 25, these thresholds will be £750 in a rolling 24 hours or £2,000 in a rolling 90 days.
The Gambling Commission has not yet provided a timetable for implementation. It said the schedule for stage one will be announced following engagement with industry and other stakeholders through implementation groups being established over the summer.
The rationale for Britain’s gambling Financial Risk Assessments
The Gambling Commission says FRAs will provide operators with a more effective and proportionate way of identifying customers in significant financial difficulty, while reducing reliance on unpopular document checks currently used to try to identify financial risk.
According to the regulator, there is evidence that some high-spending customers are experiencing financial difficulties but are not being identified or supported. Such customers are between two and four times more likely to have a debt management plan and between two and five times more likely to have a default in the previous 12 months than consumers in the wider population, it says. Without being identified, they may continue to receive marketing and promotional offers encouraging further gambling despite being financially vulnerable.
How many players will receive FRAs?
The Gambling Commission estimates that the threshold to be introduced in phase one will reach less than 0.5 per cent of customers.
As for the final threshold, it says the last year’s pilot suggested that 97 per cent of customers that cross the threshold levels “could be easily and frictionlessly assessed for financial difficulties”. That figure would surpass the 80 per cent estimated in the 2023 Gambling White Paper that first proposed the measure.
This suggests that less than 3 per cent of accounts would receive an assessment. The regulator said it believes that most occasional gamblers, recent winners or even people who regularly spend hundreds of pounds will be unlikely to need one.
Meanwhile, it estimates that less than 1 in 1,000 accounts will be unable to get a frictionless FRA. For those accounts, operators will have to verify identity properly and may have to assess financial risk through other means such as open banking or requesting documents.
Sarah Gardner, Acting Chief Executive of the Gambling Commission, said: “We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk.
“We have listened to feedback throughout the pilot process which has led to us deciding to carefully proceed. We will work with key partners to make sure that they are implemented in the most effective way for consumers and operators.”
Gambling Minister Baroness Twycross said attention must now turn to successful implementation. “The right balance must be struck so that assessments protect those in financial difficulties from the risk of gambling-related harm but do not create unnecessary burdens for the industry or consumers,” she said.
