In a recent blog published by the Gambling Commission (‘Financial risk assessments pilot – update on post-pilot analysis’), the regulator expressed what appeared to be a considerable degree of exasperation at the widespread criticism of affordability checks:

“There has been a lot of commentary recently about financial risk assessments and sadly much of it has been ill informed or inaccurate. For example, some coverage has suggested that consumers are currently being driven to use illegal operators as a result of financial risk assessments. This is despite the fact that the assessments are not live and not a single consumer has had any action taken based on one – even during the pilot.”

The blog went on to suggest effectively that the issue of affordability checks is a red herring:

“Financial risk assessments are a proposed way of identifying high-spending remote gambling customers who may be in financial difficulty, in order to help support them. This is not an “affordability check” as the check proposed would make no assessment of a customer’s income or how much an individual could afford to gamble. There are no proposals or plans to introduce affordability checks”.

The apparent suggestion that affordability checks are in effect no more than an urban myth – and therefore cannot possibly have sent anyone to the black market – does seem a bizarre one.

The 2020 report

On 6 November 2020 the Commission published a report entitled ‘Raising Standards for Consumers – Compliance and Enforcement report 2019 to 2020’. While it is fair to point out that the report says that it represents information and guidance valid at the time of publication, it should also be noted that the report was last updated in late 2024 and that it remains published on the Commission’s website.

The report starts: “Customer protection has continued to be a priority for the Commission and consideration of affordability should be a significant driving factor in customer risk assessments… twelve months ago we recommended that operators reassess their framework on triggers to consider their customer base and individual customer’s disposable income levels as a starting point for setting benchmark triggers.”

Later the report goes on to say that the Commission is “aware of affordability frameworks being considered by operators, but they are not being implemented at pace despite our guidance and advice.” The report leaves little uncertainly as to the sort of things are expected of operators: “Customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three months’ payslips, P60s, tax returns or bank statements which will both inform the affordability level of the customer may believe appropriate with objective evidence whilst enabling the licensee to have better insight into the source of those funds and whether they are legitimate or not” [our emphasis].

This is prescriptive stuff. It is true that it is not contained within the LCCP or any official guidance but it is perfectly clear that the information set out in the report is far from something which operators can ignore: “Operators should learn the lessons contained in this report as well as preparing [sic] for any new requirements that may emerge from our consultation.”

The Commission’s current guidance

Even if the guidance contained in the 2020 report is in reality outdated (and there is no particular reason to believe that it is), the fact is that the concept of affordability remains very much integrated into the Licence Conditions and Codes of Practice as they stand today. The Guidance for Social Responsibility Code 3.4.3 currently says this (at Section B Requirement 4.6):

“Licensees should aim to identify those experiencing or at risk of harm and intervene to try and reduce harm at the earliest opportunity. Reliance on deposit or loss thresholds that are set too high will result in failing to detect some customers who may be experiencing significant harms associated with their gambling. It is therefore imperative that threshold levels are set appropriately.

Historically, gambling operators have not systematically considered customer affordability when developing their customer interaction policies. Many have used deposit or loss thresholds as a main or sole prompt for customer interaction, but these have often been set at levels that were in appropriately high, in comparison to the average amount of money that the majority of people have to spend on leisure activities. This has led to a number of examples of customers spending more than they could afford, and this not being identified sufficiently early, as seen in much of the Commission’s compliance and enforcement casework.

Open source data exists which can help licensees assess affordability for their Great Britain (GB) customer base and improve their risk assessment for customer interactions. Thresholds should be realistic, based on average available income for your customers. This should include the Office of National Statistics’ publications on levels of household income.

In considering these thresholds, you should be aware of the difference between ‘disposable income’ and ‘discretionary income’ which refers to the amount left after living costs are taken into account, but it does still include many other avoidable costs.”

While this guidance is certainly more general and less prescriptive than the section of the 2020 report referred to above, the combination of these two documents means that it is far from surprising that operators take the view that they are very much already required to carry out intrusive affordability checks on their customers (and equally unsurprising that punters are finding it increasingly difficult to have a bet in the regulated market as a result).

If the regulator’s position is indeed that there is now (or that soon there will be) no such thing as ‘affordability checks’ then it needs to make it explicitly and unambiguously clear that that is the case – not least so that operators can safely stop deploying any such measures.

Saying, as the Commission has done in the blog referred to above, that the answer to concerns about affordability checks is that financial risk assessments have been misunderstood and that ‘there is no plan to introduce affordability checks’ is highly confusing and seems to ignore the reality of how the industry has been regulated for a number of years. If there is no such thing as any obligation on operators to conduct affordability checks on their customers, why do so many operators think there has been exactly such an obligation on them for a number of years?  Surely so profound a miscommunication between the Gambling regulator and the gambling industry cries out for investigation and ultimately for explanation? Because it seems an inescapable fact that one side of this fractious debate appears to have been labouring under a profound and damaging misunderstanding on the subject of affordability checks and it is increasingly frustrating that the Commission appears so certain that it is not regulator who might be mistaken.

Contact Harry Stewart-Moore on +44 207 201 1857 to discuss further or email HarryStewart-Moore@childandchild.co.uk.

The information contained in this article is general guidance only. The application and impact of laws can vary widely depending on the specific facts involved. The information in this article is provided with the understanding that the authors and presenters are not giving legal, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional legal, tax or other competent advisers. Before making any decision or taking any action, you should consult a Child & Child professional.