The UK Gambling Commission has tentatively introduced its much-feared Financial Risk Assessments (FRA), but despite the regulator tip-toeing across the start line, the industry remains convinced that the highly controversial policy will lead to disaster.
The commission announced on Tuesday (July 7) that it will roll out its FRA project in three stages, with only the most high spending players and the largest operators required to comply during its initial phase.
In this first introductory period, any customer of the market’s largest operators depositing over £5,000 in 24 hours will need to be subject to an FRA, which in most cases will see a check conducted by a credit reference agency in the background without the gambler’s knowledge.
Eventually, that threshold will drop to £1,000 in 24 hours or £3,000 in a rolling 90-day period. Individuals aged under-25 will trigger checks if they deposit more than £750 in 24 hours or £2,000 in a 90-day period.
In some cases, customers will need to submit additional personal documents to allow operators to assess whether they need additional support.
It is these instances to which the industry has responded overwhelmingly negatively, with gambling firms warning of further consumer leakage to a black market that they say is already gaining ground.
The Gambling Commission argues that only 3 percent of customers that trigger these checks will require additional documents or open banking checks to complete their assessments, and that only 1 in 1000 gamblers will even trigger an FRA in the first place.
In fact, the regulator argues that the new system will actually reduce the existing reliance on document checks, by shifting some of that compliance burden onto a “frictionless” background system.
“People who place an occasional bet, are a recent winning customer or even regularly spend hundreds of pounds would be unlikely to need a check,” the regulator said.
Why now?
The commission said that its key motivation for pushing forward with FRAs is that some high spending customers are not being adequately protected.
Where FRAs reveal that a gambler may be spending beyond their needs, operators will be expected to take “proportionate” action, which may include reducing marketing or setting deposit limits, the commission said.
“We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk,” said acting Gambling Commission CEO, Sarah Gardner.
During an initial risk assessment phase set to kick off this Summer, licensees will not be penalised if they take no action as a result of an FRA, but the implication is very much that the regulator will take enforcement action in this area in the future.
There is currently no timeline for when the UK industry will move into the second implementation stage or what requirements will be added at that point.
The commission has said only that it will engage with industry implementation groups and other stakeholders beforehand.
Similarly, there is no estimate of when the third and final implementation stage will begin.
“We have listened to feedback throughout the pilot process which has led to us deciding to carefully proceed,” said Gardner.
“We will work with key partners to make sure that they are implemented in the most effective way for consumers and operators.”
Industry aghast
Trade group the Betting and Gaming Council has reacted with dismay to the news, with chief executive Grainne Hurst saying it was “deeply disappointed and frustrated” that the commission had not abandoned the project completely.
Hurst said that the phased implementation was a clear indication that the channelisation risks posed by FRAs, which it has consistently warned of, are real.
“These checks cannot be described as genuinely frictionless if they produce unreliable outcomes, lead to unnecessary account restrictions or ultimately result in customers being asked to provide documents or open banking information,” said Hurst.
The industry, in particular the horseracing sector, remains very concerned that revenues will shrink in the days and months following the introduction of FRAs, much as they did in the aftermath of the affordability regime introduced in the Netherlands in 2024.
“The commission’s announcement does nothing to assuage that concern,” said Chris Elliott, a partner at London law firm Wiggin.
He added that it remains unclear what action operators should take once an FRA is complete and called for more guidance from the Gambling Commission.
“The staged approach risks being a staggered imposition of uncertainty rather than a measured roll-out of clear requirements,” said Elliott.
The UK gambling minister said the government supports FRAs, but appeared to back a tentative approach.
“The right balance must be struck so that assessments protect those in financial difficulties from the risk of gambling-related harm but do not create unnecessary burdens for the industry or consumers,” said Baroness Twycross.
