The GCF react to Andrew Rhodes ‘mythbusting’ blog

What are Harms markers and are they working?

Following the DCMS select committee and further pressure on the Gambling Commission from those opposed to affordability plan, their Chief Executive Andrew Rhodes has produced this blog which he states that it answers some important questions to clarify the most frequent misconceptions.

The GCF have reviewed these responses below and made comment underneath the question and answer in italics. As you will see, there are still many concerns on what the GC are saying:

Won’t these checks impact and cause inconvenience to a significant proportion of customers?


“No, not at all and this is the key myth that we are hearing from various stakeholders. We have proposed a system of proportionate checks to target only the very highest spending customers where the impacts of any harm may be most severe.


Proposed light touch financial vulnerability checks would be carried out on around 20 percent of accounts and most of those checked will not be impacted unless serious concerns are raised and the operator takes some action to support that customer.


It’s estimated that just the very highest spending 3 percent of accounts would undergo financial risk assessments.


The vast majority of financial risk assessments – at least 80 percent – would be carried out through credit reference agencies. The check will be frictionless and not interrupt the customer journey unless concerns are raised. We estimate a further 10 percent of risk assessments will be done through limited data-sharing through third-party open-source banking, which is similarly straightforward from a customer perspective.


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


The financial risk checks consultation is your 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’re not asked to directly provide the additional financial information.


The 2018 Health Survey for England (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. The proportions for people who participate in ‘online gambling on slots, casino or bingo games’ are 8.5 percent for problem gambling. The proportion of online bettors classed as being at ‘moderate risk’ is 5.2 percent and for those that participate in ‘online gambling on slots, casino or bingo games 13.8 percent.


Looking at the problem gambling rates, information about population level disposable income and loss levels by account the Government and the Gambling Commission consider these proportionate proposals to consult on and we welcome views.”


There is no evidence that affordability checks will have any impact on those suffering with gambling harm, nor is there is any evidence that addiction is characterised by losses incurred or money spent. Addiction, in any form, is created by genetics and spurred on by trauma and exposure. Only clinical treatment can confront those cognitive compulsions, whilst managing the trauma and exposure. Anything else is merely an ineffective and costly substitute for the real solution.


How can you be sure these checks will be frictionless?


“Most customers would not undergo checks under these proposals The government and the Gambling Commission have also been clear that we wouldn’t 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


For how long, and what are the parameters of the trial? How will it be judged a success or failure? Recent evidence presented to the CMS Select Committee suggests this is a complete unknown by the Gambling Commission.


Isn’t this very burdensome on operators having to conduct a manual review of all accounts checked?


If a check shows no risk flags, there is no need for a customer to be inconvenienced at all, and the process can be entirely automated.”


What are the risk flags? Have they been identified, or do they remain undefined? Given that the Gambling Commission itself acknowledges that are even unable to define what ‘gambling harm’ is, it’s no wonder they want to rush these proposals through before they are properly scrutinised for the large holes that exist within them.


What does open banking mean? Will the gambling company have access to bank account details?


“No, the gambling company would not have direct access to bank details. Instead, they would need to engage an FCA approved provider. The customer would choose whether to provide consent to this third-party provider who would then supply the operator with an assessment of financial risk.”


This requires the consumer to be happy to allow the bank to decode data and analyse your account. Many banks are not offering the service and there are questions about mistakes being made, and indeed how banks treat gambling transactions as a marker of risk. There have been reports of customers being refused credit on the basis on deposits to bookmakers. The GC have also not clarified if this is a frictionless or non frictionless check.


Is it correct that a customer would be checked every six months?


“For the light touch Financial Vulnerability Check, we have proposed that a customer would not be checked again for 12 months even if they met the loss thresholds again and we welcome views on this timeframe.


For the Financial Risk Assessment we have proposed that a customer would not be checked again for 6 months, even if they met the loss thresholds again. We welcome views on this timeframe.


After these periods, we propose that a customer would only be checked if they met the loss thresholds again.”


No comment other than disputing the need for the checks and questioning of how much will running them will cost, and whether it regulates out challengers to the dominant players in the industry.


Will these proposals impact betting in betting shops or at the racetrack?


“No. These proposals only relate to online gambling.”


Betfred’s CEO has implied checks will take place in shops with it being stated in the Racing Post on 12th June ‘Betfred chief executive Joanne Whittaker told the event that the operator was not only having to carry out checks online but in betting shops too’ Another report of shop checks is below:


Will a gambling company see my bank account?


“Gambling companies would not have direct access to any individual consumer’s bank details or records.”


This is contradicted by the GC statement that 0.3% of accounts being subjected to enhanced checks involving bank accounts and payslips. If, as estimated, the 3% subjected to checks is 1 million accounts then 100000 accounts will be required to provide bank account information. The GC is only quoting percentage figures rather than actual numbers which leads to speculation on the actual number.


Will my response to the consultation actually make a difference?


“Yes, we welcome all views and will consider responses carefully. We will also continue to liaise with Government. It would be helpful if responses could set out as much detail as possible on what you think would work in practice to balance consumer protection and consumer freedom.”


Consumers would have more confidence in this if the results of the 2021 call for evidence had been released. Concerns will remain that this is a confirmation rather than a consultation unless there is transparency with the evidence collected in the consultation. Perhaps as a regulator that is supposed to protect the best interests of the consumer, they would also appreciate being able to engage with their regulator on Twitter!


Will these checks impact on my credit rating?


“No. As stated in the Government’s White Paper (opens in new tab), credit scores will be unaffected by financial vulnerability checks or financial risk assessments and data on a customer’s gambling behaviour will not be shared with the financial sector. “


To have full confidence in this and future use of information, we would prefer a statement from the Financial Conduct Authority confirming this will not be allowed to happen.


Isn’t there a risk that operators will use my data inappropriately?


“If introduced, the Commission’s requirements will specify that these checks must only be undertaken at the appropriate time and for regulatory purposes, and the information must not be used for any commercial purposes, in line with data protection law. There are strong powers to take compliance and enforcement action should there be a breach of the proposed licence condition or data protection law more generally.”


There are numerous examples of bookmakers using spurious regulatory reasons to delay payment of winnings, the most notable recent case being William Hill calling the Police when a bettor went to collect his winnings and subjected to a 23 day delay for ‘regulatory and legal’ obligations when they had already part paid. The GC say they do not get involved in individual cases, so who enforces the compliance and enforcement action and breaches of conditions in cases such as this where data is being erroneously requested?


Under your proposals wouldn’t we have a situation where a punter could win £20,000 one week and then two weeks later have to undergo a financial risk check because they had lost £1,000 of their £20,000 winnings?


“For the purposes of consultation, the Government and the Gambling Commission propose that winnings or losses outside of the seven-day period wouldn’t be taken into account for the purposes of triggering the need for a check. But they would be taken into account by the operator when considering what an appropriate response would be if any – for example if a customer has had an unusual and temporary losing streak with no other concerns this can be taken into account in considering if any or what action may be needed.


The seven-day period is subject to consultation. Any period set though would create the scenario of a potential big win just in advance of that period.


The only way this is avoided is to consider the lifetime profit and/or loss of the account and give weight to the relevance of a big win a number of years ago to a significant loss today. The period is solely for the purposes of triggering a check – not necessarily stopping the gambling or taking other action. The lifetime profit and/or loss of the account is likely to be one consideration amongst other information known about the customer that determines whether any action by the operator is required. “


It goes without saying that 7 days is a wholly unacceptable time period for this consideration when variance can last for weeks and months. 


You don’t have financial risk checks when you buy a car or clothes, why should you have one for gambling?


“While most people enjoy gambling and don’t experience harm, the Government has determined that gambling should be a regulated industry partly because of the harm that gambling products can cause. We welcome comments on proportionate measures should be in place to reduce that harm.”


This argument can be more reasonably applied to excess consumption of alcohol or food which causes physical harm and are products subjected to more abuse compared to the 99% of people who gamble safely and without risk of addiction. You could argue that gambling, under these proposals, will become more heavily regulated than tobacco – a product that is indiscriminately harmful; you don’t have to pass a health screen to go and purchase a packet of cigarettes. And of course, there is no evidence that smoking regulation has worked either – smoking rates are falling in nations that allow advertising and don’t allow advertising, but this has not accompanied a fall in nicotine harm.


Do you consider these checks will force people to the black market?


“Part of our statutory remit and a key licensing objective is to keep crime out of gambling. When consumers access potentially illegal gambling sites, they expose themselves to many risks and are not afforded the protections in place that are required in the regulated sector.


In recent years we have been able to direct more resource at tackling illegal online activity – this has led to enforcement actions increasing and a doubling of the number of successful positive disruption outcomes.


We have also been disrupting these sites upstream by working with other regulators, payment providers and Internet Service Providers to help us cut these sites off from the British market.


In addition, we have been promised additional powers to deal with illegal online gambling in the White Paper that was published in April.


However, we will never accept the argument that because an illegal online option exists, this should mean that the regulated gambling sector should have lower, less fair or less safe standards. Britain is, and must continue to be, a world leader in providing consumers with a fair and safe gambling market.”


There is an inevitability that those who cannot place their bets with regulated bookmakers or are unwilling to present documentation in order to do so, or even when presenting documentation find they are unable to bet relative amount to their wealth, that the gap will be filled by the black market. A cursory glance at the Asian Racing Federations report into illegal betting highlights the risks posed, such as the integrity of racing not to mention the opportunity is presents to those with criminal links. It is an open secret that there are many black market bookmakers operating through mediums such as Whatsapp as well as bookmakers operating to UK customers in Eastern Europe and South America as a result of disproportionate regulation.


Why aren’t you proposing checks just for punters who gamble on riskier products like slots?


“Although slots products are associated with greater risk, customers do experience harm gambling on other products too. Many customers gamble across multiple products. At threshold levels set out in the consultation operators would only be required to understand more about financial risk of 3 percent of active accounts.


In considering financial risk we consider it is appropriate to set a consistent net loss threshold rather than separating out on which products that loss occurred. “


Does this not add credence to the argument that it is the individual rather than the product that is the issue, and greater awareness of addiction harm markers would be an appropriate response?


Variance in sports betting can mean seasoned but safe gamblers can go through losing periods which would easily result in a check. It doesn’t make them a problem gambler.


“The thresholds we propose for checks represent a highly unusual period of loss, even among those who have a long history of gambling. Even when a check is triggered, the operator would then consider the results alongside all the information they know about the customer, such as their previous gambling history, in determining what if any action would be appropriate for them to take.


If the customer was playing with winnings, outside of the immediately preceding period, this would be taken into account by the operator in their consideration of potential action.”


This has not been the case. There are numerous examples of profitable accounts on Betfair being restricted and shut with little to no account of previous play. An example in the Racing Post being the case of Alan Potts:


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