UK operators’ white paper submissions rail against affordability checks

A series of leading operators including Entain, Flutter and bet365 have all railed against affordability checks, according to written evidence published by the government.

The Department for Digital, Culture, Media and Sport (DCMS) has published 91 submissions of written evidence in relation to the white paper into the Gambling Act 2005 review, ahead of the document’s release.

Along with operators, lobbyists, trade bodies and academics have all had their written comments made public.

The statements reveal that operators hold severe reservations around affordability checks and the government’s approach to the policy.

There are also concerns regarding the role of the UK Gambling Commission (UKGC) in the gambling ecosystem from operators, with some suggesting the regulator may well have overstepped its mark.

The written evidence revealed serious concerns among operators in regard to the black market and its growth.

Here, EGR details the responses from all the operators that submitted responses to the government.

Bet365

The family-owned firm was adamant in its support for a shift in rhetoric around affordability checks and pointed to former de facto gambling minister Paul Scully’s comments at the Betting and Gaming Council (BGC) AGM where he referred to the measure as “financial risk tests”.

The operator added that the checks would need to be “tried and tested” before being implemented and that there should be some leeway for customers who are able to prove they can stake at higher levels.

Bet365 said: “We know from our own experience that only a small minority of customers will ever share financial information on request, and it is essential we get this right to avoid driving players into the black market.

“The same is the case for stake limits on online slots. In the online environment, operators have access to information on a customer’s activity which can allow an assessment to be made to support a tailored solution. Coupled with an effective affordability framework, customers who can afford to stake at higher levels should not be constrained by arbitrary limits at low levels.”

Entain

FTSE 100 operator Entain said the so-called “frictionless” checks, as referenced by Scully, needed to be fully tested by the government before wider implementation and said that its in-house Advanced Responsibility & Care (ARC) system was already delivering on the remit of reducing gambling-related harm.

ARC uses AI modelling to identify customers that could be at risk and suggests control settings, which, according to Entain, has resulted in 80% of customers setting the gambling control at the level recommended by the system.

ARC has also resulted in 90% of high-risk customers setting gambling controls and 48% of medium-risk customers setting gambling controls.

Entain said that should the checks proposed by the government show weaknesses in the testing period, affordability should instead by measured using a combination of individual assessment and operator technology. Entain said the trial period should last for at least 12 months.

Elsewhere, the operator added that the UKGC should “should regulate in a predictable and transparent manner” as well as taking a backseat from issuing guidance and instead regulate from afar.

Flutter Entertainment

Flutter said affordability checks were the area of the white paper that concerned the firm most and agreed with Entain that operators are best placed to manage the customer relationship due to their insight and tech capabilities.

Flutter said should the policy be implemented without adequate testing or study, they had the potential to drive “hundreds of thousands of players to unregulated sites”.

The firm also highlighted its own research showed that 40% of customers would not provide financial documents and 75% of those who would not comply would gamble elsewhere, including with black-market operators.

Flutter added the reported £2,000 loss limit over a 90-day period would impact a “significantly higher percentage” of its regular punters compared to the reported 3% of customers that other research has suggested. 

Additionally, it argued for the regulated industry’s right to advertise across television, social media and sport. The firm said it was already subject to “stringent regulations” around marketing and that further clampdowns would only benefit the black market.

Flutter pointed to its partnership with the English Football League (EFL) via its Sky Bet brand, stating it could “provide the basis for a new standard model for all such relationships in the future”.

Flutter also joined other operators in arguing that the UKGC needed to engage constructively with the industry, rather than ruling with an iron fist, to better regulate the market.

The FTSE 100 giant said the UKGC should be given the “right tools” to carry out its role, including a bigger budget and more staff.

Kindred Group 

Kindred Group said a “risk-based approach” to reducing gambling-related harm was of paramount importance in the white paper and added that any blanket approach towards affordability or stake limits would be a severe detriment.

The Unibet parent company said that blanket approaches to gambling policy were “overly bureaucratic, unprecedented and disproportionate” and cited that 97% of its customers always gambled safely and responsibly.

The firm added that via its technology and data systems it was able to monitor customers in real time and set stake limits based on customers’ risk and financial profiles. Kindred said blanket measures would be a “huge step backwards” in its efforts to tackle the issue.

The operator also hit out at the role of the UKGC in its written submission.

Kindred wrote: “We also believe it is important to ensure the Gambling Commission is clear in its role in light of recent indications from CEO Andrew Rhodes that its enforcement officials have overstepped the mark. A clear sense of direction from the government in the white paper to the Gambling Commission will be helpful for the whole sector.”

Bally’s Corporation/Gamesys

 Bally’s used its written submission to highlight the risk of the growing black market in the UK and said that government should not lose sight of regular punters in its efforts to stymie gambling-related harm.

The operator said it appeared there had been “little done by the government to understand the impact on general customers” and that policies aimed to protect those at risk could ultimately drive the majority into the arms of the black market.

The firm said: “The focus on problem and at-risk gamblers is prudent but should not be done in a vacuum of the effect of proposed measures on regular customers. To date, it is not discernible if any effort has been made to connect with regular customers who enjoy betting and gaming but are not at risk or showing signs of problematic behaviour.

“Again, this harks back to comments on proportionality and should be viewed in light of the alternative – the black market.”

Bally’s said policymakers and the UKGC should use the white paper as an opportunity to improve the regulated market in the UK while also decreasing the prevalence of the black market.

The operator continued: “Government legislation and Gambling Commission regulations must seek to strengthen the quality of the UK regulated betting market whilst not implementing policies that drive customers away from reputable operators and into the black market.

“This includes attracting online gambling companies based outside of the UK to seek licences in the UK that carry the full responsibility of regulating and paying gambling taxes.”

BetVictor

Alongside arguing for the “civil liberty” afforded to punters in regard to affordability checks, BetVictor took the opportunity to rally the cause for the use of cryptocurrency in the regulated market while also taking a swipe at loot boxes.

BetVictor said: “We continue to see video game providers promote the use of loot boxes through in-game content without regard for the customer’s age, without proper verification of their circumstances and without the restrictions imposed on gambling operators for using similar mechanics.

“The gambling white paper should provide the basis for regulatory control over ‘gambling-like’ products in Great Britain which are arguably more damaging to society as these games are clearly targeting children.”

On cryptocurrency, BetVictor argued that the regulated market was losing out to black-market operators by not offering the payment method and that customers were at risk because the regulated option did not exist. The firm said the digital currency should be able to be used as long as all KYC and AML risks are properly assessed.

888

888’s written response was less detailed than its fellow operators but did note it agreed with the government’s aims of ensuring there was an “appropriate balance” between consumer freedom and prevention of harm for those at risk.

The operator said: “The vast majority of customers are playing in a safe way. However, protecting the vulnerable is crucial and will rightly be a central element of the white paper. At 888 Holdings we are committed to customer protection and safer gambling.”

UK Tote Group

The UK Tote Group used its written evidence to herald the importance of the gambling industry in supporting horseracing, communities and livelihoods, and called on any regulation to support those who may well be impacted.

The firm pointed to its seven-year deal with racecourses beginning in 2019, which will see UK Tote pay a minimum of £50m to the sport.

The firm said: “The white paper needs to recognise the broader social and economic reach of the gambling industry. Most pertinently for Tote, that means ensuring the gambling industry is able to continue to provide vital funding for sports such as horseracing which need gambling revenues to survive and flourish.

“One of Tote’s foundational principles was to ensure gambling revenues are reinvested into horseracing, so it is absolutely core to everything we do. The white paper must not damage the horseracing industry as a by-product of misguided regulations.”

The operator also said there needed to be a concerted effort to tackle black-market operators and that the UK “should not sleepwalk into stimulating” it.