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Financial risk check proposals – open letter to Racing Post readers Published Date: 24/09/2023

The Gambling Commission has penned a letter to Racing Post’s readers following months of "imbalanced stories", on a daily basis, about the ongoing financial risk consultation and frequently failed to seek a right of reply from the Commission.

On its website, the Commission wrote:

Dear Racing Post readers,

I write to you about our ongoing consultation about proposed financial risk checks.

We understand that there may be some concerns about the Government and the Gambling Commission proposals from consumers who are concerned about potential privacy issues.

However, as a regulator we must help clear up misunderstandings about these proposed checks so that all Racing Post readers can engage with our consultation (opens in new tab) in an informed way.

Firstly, readers could easily assume – based on the volume and nature of the coverage - that under the proposals a good proportion of gambling consumers would have to be handing over payslips or bank statements when they want to place a bet.

This is not true.

It’s estimated that just 3 percent of accounts would undergo financial risk assessments. And by our estimates at most just a tenth of that 3 percent would not have a frictionless check via credit reference agency or open banking data. So our estimate is that at most just 0.3 percent of account holders would ever be asked to directly provide the additional financial information that operators are already requiring of some customers.

This means 99.7 percent of customers would not be asked to directly provide any information.

The financial risk checks consultation is Racing Post readers' chance to engage in the development of policy, and we would invite your views on how the 0.3 percent of account holders could have their financial risk assessed if they are not asked to directly provide the additional financial information.

The vast majority of financial risk assessments - around 90 percent - would be carried out through credit reference agencies and open-source banking via a regulated third-party provider under the proposals. These checks will not give gambling companies access to customers’ full bank account data, and any information operators receive must only ever be used for assessing risks of harm, rather than practices like identifying and restricting winners.

Secondly, little of the commentary specifies that these proposals relate to online gambling only. They would not apply to betting in bookmakers or at the racetrack. High street bookmakers may decide to carry out checks based on social responsibility or anti-money laundering risks but these changes being consulted on apply only to online gambling.

And thirdly, although there is often the assumption that credit checks impact a credit rating and could damage credit scores, these soft credit checks will not. Credit scores will be unaffected and data on a customer’s gambling behaviour will not be shared with the financial sector under these proposals.

There are also other misunderstandings which are set out on our website and information which may be helpful for those interested in the consultation proposals.

The Health Survey for England 2018 (opens in new tab) suggests that the percentage of people who have bet online with a bookmaker in the past year and are experiencing problem gambling is 3.7 percent. 5.2 percent are at moderate risk of gambling harm.1

The Government's White Paper proposed that one way we will tackle this is by implementing financial risk checks. This would introduce a frictionless system which is not currently available and make sure the smallest possible number of customers are unnecessarily inconvenienced by checks at all.

In summary, most customers would not undergo checks under these proposals. The government and the Gambling Commission have also been clear that we would not mandate operators to implement checks at levels such as those proposed in the consultation until we were sure that they can be delivered frictionlessly for the vast majority of customers who would be checked. We would be looking to trial this following the consultation should we decide to proceed.

There remains another four weeks of the consultation and we welcome all responses to ensure we strike the right balance between protecting the freedom of the individual to gamble and protecting those most vulnerable from gambling related harm.

Andrew Rhodes

Gambling Commission CEO