UKGC addresses frequent misconceptions regarding financial checks

Major changes are coming to the gambling sector in the United Kingdom. The process started with the review of the Gambling Act 2005 which resulted in the release of the White Paper, outlining plans for changes to the sector in an effort to protect the consumers and fight financial crimes, among other strategic objectives. Much was said in the last few years prior to the release of the White Paper as industry stakeholders and gambling operators sought to predict how the change would impact them.

With many misconceptions and speculations, the gambling regulator in the UK, the Gambling Commission, released a new report, answering questions related to financial risk checks, one part of the changes that raised many concerns. The details come after last month, the gambling watchdog launched the first consultation related to the Gambling Act review in the country.

According to the Commission, an estimated 3% of gambling accounts are expected to undergo frictionless financial risk assessment. It said that the planned changes seek to impact only customers who are identified as at-risk or problem gamblers. This in other words means that customers that are not flagged as vulnerable or at risk would be able to continue engaging in gambling without enhanced checks. In its latest update, the gambling regulator explained: "these checks would take place primarily via a credit reference agency, with no impact on credit score."

Under the proposals related to financial risk checks, all participants in gambling activities will have "a credit reference file." The changes, if approved, would enable such files to be checked frictionlessly with high-spending customers undergoing scrutiny as well. Approximately 0.3% of the gambling accounts may be asked for limited data sharing with a third-party open banking provider, explains the Commission.

In cases when customers do not agree to share data via open banking and there is no credit file, they would be asked to "provide other evidence of financial circumstances to allow risk to be considered," reveals the gambling regulator. It estimates that only some 0.3% of the gambling accounts would be asked to provide bank information such as statements or pay slips.

On the other hand, on the lighter side of the checks, publicly available data will be used to determine if a certain individual is bankrupt. Around 20% of the account holders may be impacted by this measure but according to the Commission, this would not cause any inconvenience.

"We seek in our proposals to strike the right balance between the freedoms of people to gamble but also conducting proportionate checks to identify and protect the most vulnerable customers from harm," explains the gambling regulator in the UK.

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