BGC urges parliament to uphold Ministers’ affordability check pledges
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The UK betting industry is preparing itself for significant changes to payments and KYC protocols as a result of the Gambling Act review, adopting a new interim code on the matter.

In a statement today, the Betting and Gaming Council (BGC), the betting operators’ trade association and standards body, has issued a voluntary interim industry ‘Code on Customer Checks’ for bookmakers and casinos to follow.

A response to heated public debate

The checks in question refer to the notion of finance risk checks, or affordability checks, one of the key measures of last April’s review, outlined in a government White Paper. 

Finance risk checks are designed to determine whether or not a bettor is financially secure enough to gamble when noticed making larger deposits in their accounts.

BGC CEO and Acting Chair, Michael Dugher, said: “This code is good progress towards solving an issue that has generated such heated public debate. It will significantly increase the consistency of safer gambling standards while removing intrusive document checks for many who are currently subject to detailed checks.

“This should be particularly welcomed by British horseracing. It is vital to note that this new code sits on top of a host of other safer gambling measures our members already conduct, and which only exist in the regulated sector.”

The code has set out how BGC member operators – the standards body includes many of the UK’s biggest firms in its ranks – should interact with customers when certain financial thresholds are exceeded.

Specifically, the code addresses cases when customers make net deposits in excess of £5,000 in a rolling month and when they wish to make net deposits of £25,000 in any rolling 12 month period.

Only in the case of the latter will customers have to provide financial documents to demonstrate they are not at financial risk. This seeks to address a long-standing concern among betting operators that customers will find affordability checks overly intrusive into their private financial lives.

The BGC states that the code has been developed in cooperation with the UK Gambling Commission (UKGC) and the UK government, largely the Department of Culture, Media and Sport (CMS), which oversaw the Gambling Act review and, along with the aforementioned regulator, has been engaged in extensive industry consultations.

CMS Secretary, Lucy Frazer, said: “Today’s announcement of an interim code on customer checks is a major step forward, and will help ensure that we can continue to protect those at risk of gambling harm without penalising ordinary punters.

“Under the new interim code, there will be a reduction in the number of customers subject to the current inconsistent approach, as well as greater transparency and consistency across the sector. We welcome the work of industry to agree this voluntary code, and their contribution to the Gambling Commission’s recent consultation on financial risk checks.

“Over recent months we have been listening carefully to the views of industry, horse racing, campaigners, charities and ordinary punters. We are committed to a balanced approach, which respects the personal freedom of the many millions of people who gamble without issue, while protecting people from the potentially destructive impact of gambling addiction.

“While the interim code is a significant step, we know there is more to do, and the Gambling Commission is set to publish its response to the consultation on financial risk checks. This response will set out a new system of light-touch, frictionless financial vulnerability checks and a pilot of the enhanced risk assessments, and we remain committed to only bringing in these assessments if we are assured they will be genuinely frictionless for the vast majority of punters.”

Adopting regulatory recommendations

The findings of the UKGC’s consultation on affordability – the ‘Remote gambling: financial vulnerability and financial risk’ consultation – aims to introduce a frictionless vulnerability check for operators to utilise.

Both the UKGC and CMS estimate that only 0.3% of customer accounts will be affected by enhanced checks, whereby customers will have to provide financial documents.

Under the initial White Paper proposals, checks will begin at a net loss of £125 within a month or £500 within a year, higher spending thresholds will stand at £1,000 a day and £2,000 a month, with stricter benchmarks for 18-24 year old customers.

In the event customers have to provide evidence of financial sustainability to gamble, they will be asked to do so via a third party Open Banking provider under UKGC/DCMS plans.

UKGC CEO, Andrew Rhodes, commented on the BGC code: “This voluntary code will help ensure a consistent and transparent approach for consumers across participating operators where customer spend is the trigger for action. The thresholds in the code represent a set of minimum standards agreed by operators, including backstops where they will consider and engage with customers where necessary.

“We think this code will help address the varying approaches from operators to customer spend triggers today, whilst we conduct a pilot on the use of the frictionless financial risk assessments that the Government proposed in their White Paper.

“Of course, operators remain under the obligation to meet other requirements to support customers at risk of harm. All the normal monitoring and action by operators where their customers may be showing signs of risk or harm remain the same and this can often be done in ways which do not involve document checks.”

The BGC’s code aims to sit below the enhanced level of finance risk checks and above the lower end of the finance vulnerability check. If customers wish to make a deposit above £5,000 in a rolling month, firms must undertake a risk assessment, including areas such as customer income or wealth.

More enhanced measures are required when customers make a net deposit of £25,000 in any rolling 12 month period. In this case, customers may have to show documents such as Enhanced Due Diligence (EDD).

UKGC and CMS consultations continue on a range of topics, and affordability is not the only area operators need to consider. The BGC stated that it is working with the UKGC on an AML check code – AML being an area in which shortcomings have landed many operators in regulatory trouble. This code may also trigger requests for documents.

Dugher explained: “While this is good progress in the right direction, we are acutely aware more needs to be done. So I wish to see a new Code on Anti-Money Laundering Checks to complement this Code on Customer Checks to further raise standards on consistency and reduce the disproportionate need for document requests, rightly ensuring that betting with our members remains free from crime.”