UKGC Publishes Update on Financial Risk Assessments Pilot

The UK Gambling Commission (UKGC) has published a new update on its ongoing pilot of financial risk assessments. Outlined in the Gambling Act white paper, the measure seeks to identify and protect players in financial trouble from over-gambling.

A Frictionless Way to Protect Consumers

The UKGC described the risk assessments as a “proposed way of identifying high-spending remote gambling customers who may be in financial difficulties, in order to help support them.” It emphasized that this is not the same as “affordability checks” since the regulator does not have a regulatory requirement for checks and is not proposing any.

Instead, financial risk assessments would be a way to identify people with financial vulnerabilities without affecting all players. In addition to that, the commission clarified that the assessments will not affect a customer’s credit score.

The UKGC Gained Valuable Insights

In its update, the UKGC noted that it is “carefully piloting” the financial risk assessments to determine whether they would be effective in shielding any consumers from harm. Depending on the results of this pilot, the UKGC will decide whether to introduce them as a permanent measure.

According to the UKGC, the pilot is being conducted in three stages, after which an analysis period will follow. The regulator has already concluded the first two stages, drawing important data about the assessments.

In the first stage, it succeeded in making 95% of all assessments frictionless, in line with its earlier promises. For stage two, this figure increased to 97%. These figures exceeded earlier estimates which had suggested that only 80% of all assessments would be frictionless.

To put these figures into perspective, the second stage of the pilot saw a staggering 1.7 million financial risk assessments being conducted.

The UKGC said that it is now beginning to gain an understanding of the financial risk profile of the customers who met the thresholds for the pilot. After examining data from credit reference agencies, the UKGC understood that customers who met the thresholds for the pilot are, in general, more likely to have a debt management plan or to have a default.

Stage Three Is at Reporting Stage

The UKGC’s director of policy projects, Helen Rhodes, commented on the results so far, saying that they’ve helped the regulator understand whether the checks can be conducted in a frictionless manner.

In the meantime, the third stage of the pilot is currently at its reporting stage. During this stage, the UKGC will examine how and whether assessments could be targeted where there is a higher financial risk.

Rhodes elaborated:

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.

Helen Rhodes, director of policy projects, UKGC

For context, data-sharing for stage three of the pilot wrapped up on April 30.