Implications of UKGC’s Financial Risk Checks for the Gambling Industry

The pilot, which has now entered its post-stage three analysis phase, seeks to explore how these checks could be integrated into the gambling industry in a way that causes minimal disruption. In a blog post, Helen Rhodes, the UKGC’s director of major policy projects, shared insights into the ongoing process and the Commission’s approach to delivering these assessments in a way that doesn’t burden operators or customers.

The key focus of the financial risk assessments is to help gambling operators better understand the financial difficulties of their customers, without resorting to intrusive affordability checks. These risk assessments are designed to be far more targeted, ensuring that only those showing significant signs of financial distress are flagged for further review. Importantly, the assessments will not affect a customer’s credit score, a concern that had previously raised alarm in some sectors.

The pilot itself is a multi-stage effort, with data from major operators and three credit reference agencies being used to assess the effectiveness of these checks. In stage two, approximately 1.7 million risk assessments were conducted, covering 860,000 customer accounts. Impressively, 97% of these assessments were completed without any friction, far exceeding the 80% success rate projected in the 2023 government white paper. The success rate of frictionless assessments increased from 95% in the previous stage, highlighting how the process is becoming more streamlined.

The Commission’s update also revealed that there is still room for improvement. In the second stage, a small percentage (around 0.1%) of accounts flagged for review were unable to undergo the process smoothly. However, the findings have shown that customers flagged for review were far more likely to show indicators of financial risk, such as defaulted loans or existing debt management plans.

These results have significant implications for operators, as they now have a clearer understanding of how to identify potentially at-risk customers in a more efficient way. It won’t be simple to implement. The UKGC’s decision to continue evaluating data from multiple credit reference agencies will be crucial to understanding whether any inconsistencies emerge in how these checks are applied across the board.

As the UKGC moves into the final analysis phase, it will focus on ensuring that the process remains consistent and integrated into operators’ customer interaction strategies.

While these financial risk checks represent a crucial step towards safer gambling, their rollout will need to be carefully managed to ensure that the gambling industry can adapt without facing too much strain.