The UKGC has issued strict guidelines on how gambling operators should manage their VIP schemes.
The Commission identified these VIP schemes as an area that would require change, following a consultation which saw ‘high value’ customers provided with gifts or preferential services in an aim to increase their custom, without enough consideration of their spending abilities. The last paragraph of the guidance was just as telling, with more than a hint of the likely announcement of a consultation around customer interaction which will heavily focus on ‘affordability’.
'In the coming weeks, the Commission will be launching a consultation on customer interaction which will include the assessment of affordability'.
– UK Gambling Commission
One would expect this to be a public consultation if a customers’ views are to be taken into account and the area of affordability is likely to generate one of the largest responses to this consultation. This comes hot on the heels of the 192-page ‘Gambling Harm – Time for Action’ report, produced by The House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry, and the 81-page ‘Gambling Review and Reform’ report produced by the SMF (Social Market Foundation), both released this summer.
Roll on to Autumn and two heavyweights have joined the tsunami of opinion demanding gambling operators to regulate further. Downing Street has reportedly taken control of the upcoming review of gambling legislation, due to be launched within weeks, amid a growing appetite for sweeping reform of the industry from Boris Johnson and his closest advisers.
The Department of Digital, Culture, Media and Sport (DCMS) is expected to kick off the long-awaited review this Autumn but well-placed sources said Boris Johnson and his closest advisers were now steering the plans. ‘The PM just sees it as people being exploited and it’s not him’, said one MP with intimate knowledge of discussions within Whitehall.
The Guardian was quoted as saying ‘Johnson’s closest adviser Dominic Cummings and Munira Mirza – Director of the No.10 policy unit – have both taken a personal interest in a push to overhaul the 2005 Gambling Act’.
Around the same time as this Downing Street intention, came the announcement that a group of some 150 peers from within the House of Lords will undertake a review of gambling industry safeguards, duties and customer protections, seeking to inform the government about urgent changes to gambling regulation. ‘Peers for Gambling Reform’ (PGR) will be Chaired by Lord Foster of Bath (Liberal Democrat). Vice Chairs of the Group will include Lord Smith of Hindhead (Conservative), Baroness Armstrong (Labour), Lord Butler (Crossbench) and the Bishop of St Albans.
The group has been formed ahead of the government and UKGC’s planned reform of the 2005 Gambling Act, in which PGR outlined its key priorities. These include ‘effective affordability checks for gamblers to prevent harm’.
Link this with the UK Gambling Commission’s continued calls for ‘the need for improved affordability checks’ and it wouldn’t take a data scientist to work out that legislative changes are coming. At the very least, we are likely to see clearer and tighter regulations on what affordability means or, to put in bluntly, what an operator is going to need to do to be compliant with affordability based licence conditions.
At LendingMetrics, we have had discussions with a number of operators who are keen to tap into our knowledge and experience of providing automated risk decisioning to online consumer and commercial lending organisations. Lenders are ultimately building affordability profiles to help decide what amounts they are able to responsibly lend to a customer and on what terms, arguably akin to deciding what amount a client can ‘lose’ to help ensure they are ‘betting within their means’.
This same technology that we have used to assist lenders over the last 10 years, is being used to build affordability profiles for gambling clients. Our experience of working through the (conceivably toxic) payday loans period, which saw the rise of high cost short term credit, has given us great insight as to how the work of regulators evolves. Too many solutions are currently being touted as ‘affordability solutions’, when in reality they are nothing more than a component of the overall affordability picture.
At LendingMetrics we see that this is just the beginning of the changes to the gambling regulatory landscape and that gambling operators need more than a sticking plaster. They need a future-proofed solution, capable of orchestrating all of the vendor solutions available today and those that will surely come to market in the coming months and years. Our Auto Decision Platform (ADP) can pull data from any feed into one place to build a more fulsome profile. It can link the profile with operators’ customer betting data to provide a robust affordability profile, as well as allow the managing of customer trigger points (i.e. excess betting) accordingly. We have integrations with all of the major CRAs as well as offering our own CRA data (LMX). We offer a FREE Open Banking solution with OpenBankVision (OBV) – providing a customer has given permissions - and our ADP platform helps automate, in seconds, an affordability profile. What’s more, there are audits and manual interventions to add the human touch where desirable.
The political and regulatory voices have been vocal on what’s coming. All operators should be on notice and looking at how they should automate and manage affordability.
For an exploratory discussion on how we can help with your affordability profiling or if you want access to free Open Banking, please get in touch with one of our team of experienced online gaming experts on +44 (0) 2394 211010.