The Betting and Gaming Council (BGC) has told SBC News that it feels ‘left with little choice’ but to consider a legal challenge against the full implementation of affordability checks for UK gambling.

Financial Risk Assessments (FRAs), the second and most stringent level of the Gambling Commission’s affordability check solution, are set to  be implemented on Friday 22 May. 

FRAs will be triggered only in cases of high loss levels, such as in cases of binge gambling, and will use credit bureau data to assess a customer’s financial standing.

The BGC, and many other betting and gaming stakeholders including those in horse racing, have been opposed to the checks from the start – dating back to the first mention of the need for an ‘affordability check’ style solution during the early stages of the 2005 Gambling Act review, taking place between 2020-2023.

“We want the Gambling Commission to properly review these proposals before taking any further steps,” a BGC spokesperson told SBC News this morning.

“Evidence from the Commission’s own pilot shows these Financial Risk Assessments are simply not frictionless, with serious inconsistencies in the data and a real risk that large numbers of customers will face intrusive financial checks.”

The industry’s concerns about affordability checks have been well documented. During the Gambling Act review, estimates of a financial hit to horse racing of over £60m a year were repeatedly cited, for example.

In more recent years, the augment has shifted to concerns that customers could be pushed away from the regulated market and to the unregulated one – a market which, according to Gamstop at least, some 8% of self-excluded British punters already admit to using.

“This is another perfect example of the lanyard class going against the working class. It’s got to stop,” an industry source told SBC News.

Get the lawyers ready…

The BGC is now preparing to take its fight against affordability checks to another level.

A letter penned by Grainne Hurst, Chief Executive Officer of the BGC, and seen by the Racing Post, put it plainly that the trade body views affordability checks as “disproportionate and potentially open to legal challenge”.

In her letter, Hurst reiterated the BGC’s argument that checks will have ‘significant problems’ with accuracy, consistency and data relevance and will encounter ‘fundamental implementation issues’ as more customers receive requests for documentation.

FRAs were one of two key measures proposed by the Commission to solve the affordability problem, which the Gambling Act review White Paper of April 2023 made clear was a key issue the government wanted to address.

Alongside the more intense FRAs, there will also be Financial Vulnerability Checks, initiated when a customer deposits more than £150 over a rolling 30 day period. The initial threshold was proposed at £500, but this was dropped to £150 during the Commission’s six month consultation on the checks last year.

The Commission has consistently defended its approach to affordability checks, estimating that just 3% of bettors will be affected by the light-touch Vulnerability Checks and that an even lower number would be affected by the more indepth FRAs.

The BGC is not satisfied with this, however. The trade body believes that the number affected by Vulnerability Checks will actually be closer to 5%, and could rise to 10% for customers who wager every month and to 20% if customers with an annual net spend of £200 are removed.

“This has to work for all customers, but the evidence so far suggests these proposals are not fit for purpose and risk driving people away from the regulated market towards the growing illegal online black market, where there are no protections and no safeguards,” the BGC’s spokesperson told SBC News.

“Given the serious concerns raised by operators there is a real risk the industry could ultimately be left with little choice but to consider legal challenge if these proposals proceed without further scrutiny.”

Commission: any checks are ‘carefully considered’

The Gambling Commission has long maintained that its affordability check solution will be as frictionless as possible for customers, and that the vast majority will be able to place their weekly accumulator without any intrusiveness.

The regulator’s proposals heavily rely on the use of Open Banking, which will be used to share data between a customer’s banking provider and the relevant betting operator to assess their financial position at the time.

When approached about the BGC’s possible legal action, a Gambling Commission spokesperson gave SBC News the following statement: 

“We reiterate that we are continuing to work on financial risk assessments, with one of the key focuses being on removing unnecessary friction for consumers. If introduced, the checks would apply only to a small proportion of the highest-spending accounts and would be frictionless for the vast majority of those assessed.

“No decisions have yet been made and we will shortly be putting recommendations to our Board on next steps. We are continuing to engage regularly with industry and other stakeholders as the pilot progresses, and will continue to provide updates as this work develops. 

“Any future implementation would be carefully considered, evidence-led and introduced in a measured and proportionate way.”

Part of the problem for some punters may be terminology. Take Open Banking, for example – the concept of what it is and how it works is not exactly common knowledge, and when many in the general public hear ‘open banking’ they may think it means all their details and documents are going to be open to view by everyone, which is far from the case.

Another problem industry lobbyists face, however, is inevitably pushback from the other side. Gambling reform advocates have long argued that affordability solutions are needed to prevent customers from betting more than they can afford. 

Despite racing and betting’s best efforts during the Gambling Act review, the government took the former’s opinions on board. 

The BGC’s mulling of legal action could buy more time, and the Commission’s own wording indicates even it is not 100% on pushing through with the solutions, but it could eventually get to the point where the industry has to face the music.