Earlier this week, the Gambling Commission launched a new consultation looking for feedback into a set of new measures for online operators. The 10-week consultation will see both industry members and consumers come together to give their take on regulatory reform. As part of this consultation, participants will reportedly consider introducing a £100 ($130) per month affordability threshold for all customers of UK online operators.
With the Government set to review the Gambling Act 2005, it is clear the Commission is aiming to introduce new regulation itself. Although this might be concerning for operators in the short term, it could see the UK industry avoid more intense restrictions under the directive of the UK Government.
Already this year, we have seen the effect of a similar consultation into VIP betting in the UK. This saw the Commission publish a series of checks which must take place before an operator makes a customer a VIP, including funds, occupation and identity verification. Operators are also now expected to assign a senior executive to oversee VIP schemes, making that individual personally accountable for the safety of customers.
If this VIP reform is anything to go by, this most recent consultation could see some serious and permanent changes for online operators; so with that in mind, does the industry need to be worried?
According to the Commission, the current thresholds for customer protection action are too high to be effective in preventing harm to vulnerable customers. For that reason, the new requirements will dictate affordability measures with thresholds set out by the Commission. Other requirements will also be debated, such as mandatory time limits for gambling – after which customers must be contacted to question their behaviour.
While the Gambling Commission has suggested some online operators are already meeting its standards for customer protection, or have made efforts in an attempt to do so, the regulatory body has deemed new restrictions necessary to bring the whole industry into line.
A statement from Gambling Commission executive director Tim Miller read: “While some operators have continued to improve their customer interaction processes, our evidence shows that many online operators are not setting thresholds for action at appropriate levels. We are clear on the need for gambling companies to take further action and that the Commission must set firm requirements to set consistent standards.”
According to consultation documents seen by The Daily Telegraph this week, the Commission has deemed thresholds of “tens of thousands of pounds” ineffective in combating gambling-related harm. The Commission is also quoted as describing a £2,000 limit as “neither realistic nor appropriate.” Instead, as a result of evidence-based research and lived experience, the Commission is considering the introduction of loss limits as low as £100 per calendar month before action is necessary.
It is important to consider the Gambling Commission’s reasoning for this. According to the consultation documents, this minimum threshold amount is based on the fact 50% of the UK population has a “discretionary” £250 per month of spend after all other monthly bills are paid. The regulatory body has said any affordability threshold must take into account other spend such as travel, sport and leisure.
While it might be shocking for operators to see a potential £100 spending limit dominating newspaper headlines, it is also important to take stock of the facts. Rather than limiting all customers to £100 per week, this is the spending limit before action would be necessary to assess whether a customer was at risk. Once deemed not at risk, it is assumed a customer can be permitted to spend more in the month. This is also the lowest limit the Commission is considering, meaning it would be a worst-case-scenario for online operators; equally, it would be a loss limit not a deposit limit, so handle could still remain high if customers wagered £500 and got £450 back.
Ultimately, rather than being significantly detrimental to operator revenue, it seems these new requirements would cost more in terms of operational efforts. Operators may have to employ more staff to ensure they are meeting the customer protection standards set out by the Gambling Commission. There will undoubtedly be more frequent customer contact and this will make life more difficult for operators – particularly those who currently invest very little in responsible gambling. But if the result is genuinely greater player protection, this is no bad thing.
The only real financial cost other than this may come from customers frustrated by the greater number of account blocks and frequency of communication. This could see operators lose customers, particularly those who have considerably more than the “discretionary” £250 per month to play with. If a bettor’s recreational funds are closer to £10,000 each month, they will not be best pleased if they are asked for proof of funds after they spend £100 on a bet.
That said, it is also true that the Commission will only introduce any limits after the 10-week consultation. Certainly those industry minds partaking in the consultation will have a thing or two to say about such a low limit of affordability – and it is clear the Commission is willing to take all opinions into consideration. Ultimately, while a regulatory consultation may seem daunting, it doesn’t seem the industry has too much to be concerned about just yet.