Recommendation 6

HM Government Accepted

We welcome the Committee’s support of the principle of financial risk checks that are minimally intrusive and with appropriate data protection controls built in. We and the Gambling Commission are committed to a proportionate, frictionless system of financial risk checks, to protect those at risk of harm without over-regulating. This careful targeting of interventions has been a guiding principle during the development of the proposed financial risk checks. We are seeking to protect those at the greatest risk of devastating and life-changing financial losses, and there is a clear need for specific requirements on online operators to prevent substantial unchecked spend. We recognise that this needs to be proportionate and we expect the Gambling Commission to publish its consultation response following its summer 2023 consultation in due course detailing how this will be achieved, including a commitment to undertaking a pilot for enhanced risk assessments. The frictionless, light touch financial vulnerability checks will identify vulnerability such as where a customer is subject to a bankruptcy order or has a history of unpaid debts. They will focus solely on publicly available data and, following feedback through the consultation, will not require gambling businesses to consider an individual’s personal details such as postcode or job title. Some larger operators already conduct similar checks for all customers at registration, and others do so at some point in the customer journey. Most of those checked will not be impacted unless serious concerns are raised and the operator takes some action to support that customer. The threshold for these vulnerability checks will be set out by the Gambling Commission in its response. It has said in an update on its website that to ease the introduction of these checks they will initially come into force at a higher threshold, before reverting to a lower threshold later in the year to smooth implementation for consumers. The enhanced financial risk assessments will only be carried out on the very highest spending online customers. They will be conducted frictionlessly for the vast majority of consumers using data sharing and will not come with blanket rules for operator interventions if there are no signs of harm. In their blog post, the Gambling Commission confirmed that a pilot for enhanced risk assessments and data collection period will support final decisions on the way in which these assessments will be conducted. The pilot will enable the Gambling Commission to test the details of data-sharing in practice, and work with credit reference agencies and gambling businesses, to understand the impact on consumers and determine whether the policy will have any unintended consequences. The pilot period is to be a pilot of how the data sharing works and will not impact customers, though businesses will of course be expected to continue to protect consumers by implementing their own existing consumer safety controls and remaining compliant with existing regulatory requirements. The pilot will allow the Gambling Commission to refine the data-sharing processes before the assessments are rolled out in a live environment. At the same time, we are working closely with the Gambling Commission and industry to bring about an interim solution that ensures a level of parity and consistency in how industry-led checks are applied, before our new frictionless financial risk checks come into force. Alongside the pilot, the Gambling Commission will continue to gather data which will inform the final thresholds and definitions of loss or spend for implementation following the pilot period.