There’s a rumour going around that the UK government is poised to announce an affordability limit of £500, and that they will do it without waiting for a white paper or legislation. At London’s ICE 2022 Conference it was all anyone could talk about. But if it happened, would it really be the end for the industry as we know it?
It started as ICE floor gossip but by the end of the week, the prospect of the UK regulator mandating a £500 limit on affordability had been heard so often it just felt true and inevitable.
Rumours like that do have a habit of becoming fact: think back to the regulatory outcomes of the FOBTs £2 stake limit and the credit card ban. So what will happen if a £500 limit on affordability comes into force, and how can the industry get ahead of it, should the gossip turn out to be true?
The £500 question
My view is that the number itself is the messenger, not the message. Actually having a number would be progress for many; at least everyone will know where the line is drawn and that all operators are being held to the same threshold.
But whatever the number is, and how it is expected to be calculated, what will matter most of all are the guidelines on how operators are expected to implement it.
The government has said very little of substance so far, but the direction of travel when it comes to stricter affordability tests is pretty clear.
In early March, the minister with responsibility for gambling, Chris Phillip, spoke at a Gambling Reform rally where he cited recent affordability failures, including the sanctions against one operator for allowing an NHS worker earning £1,400 a month to set a deposit cap at £1,300 a month.
This is what he said: “That’s over 90% of their monthly income. In addition to that, they allowed another customer to lose £37,000 in an extremely short period of time with no checks whatsoever.”
We can infer from this that once the affordability limit has been imposed, operators will have no leeway with regard to how they conduct their checks on a customer from this point. It has to be actual data which gives a true picture of the individual’s finances. Making estimates or accepting self-certification (e.g. of profession) probably won’t cut it any more.
The hope is that the industry is consulted at this point, although the record of the Gambling Commission at this stage is poor in this regard.
Whoever gets the job of writing the rules will certainly need guidance – I’m sure the sector’s regulatory and compliance experts are as we speak modelling what they think might be coming down the track. Their combined expertise will be crucial in the next six months.
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