Problem Gambling & Affordability: Is Change Really Coming?

After attending my first ICE event last week to discuss problem gambling and affordability I was impressed by the grandiose of the event and seeing the creativity different companies invest in making them stand out from the crowd.

For W2, we were situated within the consumer protection zone alongside our partners Crucial Compliance and nChain to discuss affordability, player protection, and safer gambling.

The consumer protection zone didn’t have the free drinks or fancy merchandise, but it was a selection of companies who are committed to making gambling safer for players and ensuring operators have the right processes in place to do so.

Since I joined W2 back in 2021 I have been pleasantly surprised how some operators are approaching the subject and it’s clear to me that safer gambling is a priority. At the event I had fantastic conversations with industry stakeholders on their perception of the issue at hand and how best to tackle it.

There were also some great panels within the consumer protection zone from operators, suppliers, and members of regulatory bodies discussing what responsible gambling looks like now and how they plan to implement new processes to better understand player behaviour.

Following these discussions at ICE, the UK Gambling Commission (UKGC) swiftly released a new report detailing how they are implementing new rules to ensure ‘online gambling businesses do more to identify and take action to protect consumers at risk of harm’ to further tackle problem gambling.

The finer detail within the new guidance requires operators to conduct the following:

  • Monitor a specific range of indicators, as a minimum, to identify gambling harm
  • Flag indicators of harm and act in a timely manner
  • Implement automated processes for strong indicators of harm
  • Prevent marketing and the take-up of new bonuses for at risk customers
  • Evaluate their interactions and ensure they interact with consumers at least at the level of problem gambling for the relevant activity
  • Evidence their customer interaction evaluation to the Gambling Commission during routine casework
  • Comply with these requirements at all times, this includes ensuring the compliance of third-party providers.

You can read the full announcement here.

Markers of harm will be a key buzzword moving forwards in the industry and companies such as W2 partner Crucial Compliance are already developing innovative solutions which is focused on this model. Crucial Player Protection consists of a set of advanced behavioural markers which, although powerful individually, when combined can enable operators to analyse whether a customer is at risk of gambling related harm.

The new rules will come into play on 12th September 2022, to give operators time to implement new procedures to ensure they are complying with the guidance.

Within the guidance, the UKGC also mentioned that in the next phase of their programme they will be consulting further on identifying consumers who are financially vulnerable and tackling significant unaffordable gambling.

When the review of the 2005 gambling act was announced all the way back in December 2020, the industry was convinced that the key focus of the review would be affordability. Considering that the new rules announced last week won’t be enforced until September of this year, it’s likely that the review will not be complete by the end of 2022.

And whilst companies within the space have been busy developing several types of affordability solutions which often focus on open banking and geo data to prove affordability, what I’ve discovered from various conversations is a collaboration between that and individual markers of harm is what the industry is searching for. If affordability solutions are really going to make a difference to gambling related harm and player protection, they need to focus on the affordability of the individual.

Geo affordability can give a good general idea of a player’s affordability based on postcode level data. But for example, if person A lives in a million-pound house and earns 6 figures a year, and person B lives in a one-bedroom flat earning minimum wage across the road then it could cause issues. Open banking affordability gives more of an indication into the player’s banking details, income, and outgoings. But many customers might find it intrusive to consent to sharing this data with an operator. With so many operators in the UK, the player could just hop over to another and continue spending.

The pressure is rising for both operators and the UKGC. It is now almost a weekly occurrence for an operator to be fined millions for failures when it comes to AML (Anti-Money Laundering) and player protection. Without a clear-cut update to regulation set out 17 years ago when the industry was in a completely different place than in 2022, and a seeming disconnect between the regulator and operators, meaningful change needs to happen.

From the conversations we are having and discussions taking place in the industry, the current regulation does not yet feel fit for purpose and affordability on an individual level is looking like it could be a huge aid in the fight against problem gambling. For now, though, unfortunately we must wait patiently for the consultation to continue and collaborate across the industry to tackle the issue at hand in the best way possible.

If you are interested in hearing about how W2 in collaboration with our partners Crucial Compliance and nChain could assist your business, contact us here.

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