Rebekah Jackson talks with Chris Elliott, Senior Associate at Wiggin. They discuss the regulator's current stance on responsible gambling, as well as their thoughts on the challenges of implementing robust affordability checks.
Rebekah Jackson, GBG
Hi, thank you for joining us today. I'm here with Chris Elliott Senior Associate at Wiggin. I'm Rebekah Jackson, part of GBG’s gaming team. Thanks for joining me today, Chris. Okay, so we're here today again to have a conversation around portability and responsible gaming and getting a bit of insight from your point of view and Wiggins point of view. And I guess first of all, if we start with the gambling commission of what you think their current expectations are and approaches around Responsible Gambling
Chris Elliott, Wiggin
Yeah, so I mean, the Commission's made no secret of its desire to try and improve consumer standards in the industry and has been working closely with certainly the betting and gaming council to try and introduce either voluntarily or empty new requirements really designed to make a ganache safe, safer and reduce harm across the industry. And really when we talk about improving responsible gaming, it encompasses lots of different areas, including the affordability challenges that are currently faced. But also, you'll be aware that in this industry is being consulted at the moment around the regulation and controls put in place designed to minimise risks around VIPs. And high value consumers be also new new rules around kind of how it is that we're going to control gambling advertising, and also progress to be made on things like responsible product design. So there's a there's a real view at the moment that there are lots of different angles that the Commission is coming from.
RJ: Chris in terms of affordability checks, what type of affordability checks do the regulations currently ask operators to undertake.
CE: The Commission has been quite clear that it expects operators to be undertaking these checks. And have these types of control measures in place and to be performing them much earlier on in the customer relationship then has historically been the case.
And if you think about I mean unaffordability check is really being carried out for two purposes. One is for as an anti-money laundering control, and so they set up framework design, which say, you know, when customers, any customer Gamble's beyond a certain level, that operator needs to be curious about where that money that customer is getting their money from, and needs to have a control in place designed to minimise the risk that might actually be criminal money's being spent spending in criminal matters with an operator or NPC attempting to launder money in and out of an operator.
But generally speaking, those on the AML side have historically been done and actually still being done at slightly later stage in the customer relationship because you're it's a control measure against a slightly different risk, the risk being that they're gambling with criminal monies, but the champions the industry is facing at the moment is around an affordability check. been carried out for a safer gambling concern and the industry and the commission have been quite clear that it expected those types of checks to be benchmarked against what kind of average your average customers can afford, rather than, you know, those customers that might you might suspect of them spending criminal money.
So it's regulations currently requiring you to set those benchmarks to kind of reasonable estimate of what your average customers can afford, which obviously places a challenge on operators to work out what their average customers can afford, and how you might go about doing that. Because I suppose there's a there's a few kind of angles, a few challenges that are being faced, but it's, it's okay, where do you set those benchmarks for when it is that you're going to actually carry out the check
And there's still not huge consistency in the industry about when these types of checks should be carried out. But over and above that, it's what does what does these What do these type checks actually look at? What are we actually measuring against? And you know, we loosely described these checks as affordability checks, but what Is it that actually we're seeking to establish when these sorts of checks are being carried out? Not just when but how they're being done?
RJ: Then the speed and I've heard firsthand the challenges that operators are seeing with regards to carrying them out. From your perspective, have you heard have much experience with operators having challenges on how to carry out these challenges?
CE: Yeah, so and there is a there is real challenges, because I suppose if you think, you know, as a point of principle, and a full affordability check requires you to have some basis of some metrics to judge again. And the challenge comes in, you know, having access to the information allows you to form that judgement, be it based on say the data or really an opinion about whether someone can afford the amount that they're gambling with, you know, clearly if you or I were to judge it or own or make a judgement about whether or not the money that we are using to gamble with is within levels that we can afford, we will have access to a whole range of different data that allow us to form that judgement being not just, you know, what I earned, but also, you know what, what other obligations I might have to pay, for example, mortgage or school fees or, you know, food or your day to day expenditure
And, you know, the Commission has actually been quite in its published guidance says that operators should have regard to all of those things when seeking to establish whether or not someone has disposable income available to them to fund the government. And the challenge that they're facing is, you know, if you're asking operators to start doing these checks at much less earlier stages in the customer relationship, the challenges one is that operates their customers aren't necessarily always prepared to give or volunteer that type of information, but also that the information may be incomplete in order to form a proper view about whether or not someone is affording their spending with you. So really, that's gonna be one of the key challenges we are seeing now is not just say when but how it is that you actually measure affordability when these sorts of checks have been carried out.
RJ: Do you expect the regulation will change to enhance obligations around affordability? And if so, how?
CE: I think I mean, it's very clear that there will be some introduction of either enhanced or new requirements around this time, the “A” word, this affordability concept, at the moment, the regulations are actually that become more slightly prescriptive in the Commission's customer interaction, guidance around safe ergonomic around how it is that you're meant to identify and interact with customers.
It uses the concept of affordability really, in a quite narrow sense to define the points at which you need to effectively treat customer spend as a proxy for potential harm and the point of which you need to get to interact with customers. We're going to get to a point where it says we might start seeing sort of minimum standards by the regulator or probably ideally, the industry to define the points of which are just when an affordability check is going to be carried out, but kind of what it actually looks like what information you need in order to get to that.
To get to carry out that check, also, I suppose what might also be prescribed in regulation is also what, you know, at the point of which these sorts of say thresholds are met, what actually needs to happen? Can you let customers continue to gamble? And if not, you're really looking like it's looking more akin to a kind of mandatory deposit or even loss limit that's going to be set over which customers won't be allowed to gamble until you've carried out an affordability check.
RJ: I think it's going to be a real balance to get right to make sure that, as you say the right checks are done at the right time that aren't too intrusive to that customer, but also protect the vulnerable customers as well. And so I think it will Really, really interesting time to see what does come out. I do really appreciate you joining us today Chris and having a chat and going through your thoughts of what's gonna be coming up and what what's happening at the minute. So thank you so much for your time today and look forward to catching up with you soon.
CE: Great. Thanks very much.