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Everyone is talking about affordability. Operators are still faced with a “sustainability dilemma” – they have to meet their regulatory obligations, protect players and ensure their business is profitable while also fulfilling their regulatory commitments. Many customers lose out when they’re asked to prove that they have enough money to spend. Open Banking, which can be used to perform these checks quickly, may help to retain customers and increase revenue.
The Gambling Commission has launched a financial risk check, while the DCMS published a consultation. Both have brought affordability to the forefront of their agendas, but operators now need to strike a balance between minimising damage and maximising revenues. The Gambling Commission launched its own financial risk checks, bringing affordability to the forefront of their agenda. Operators must now strike a balance between minimising harm and maximising revenue.
Financial risk checks should be completed as quickly as possible and as frictionlessly as possible. This will allow customers to complete them as easily as they would approve a payment when shopping online. Operators must make a quick decision because the longer they wait, the higher the likelihood that players will move elsewhere.
There are people who will never share their financial information with a gambling operator. Some people will not share their data with gambling operators because they know that they gamble beyond their means. It’s good to see the system functioning as it should. There’s also a third group for whom the effort is too great. When asked for bank statements, they move on to another competitor because the hassle is not worth it.
Open Bank technologies, like ClearStake allow customers to download and print bank statements, and wait for the operator to review the data. This process now takes only 30 seconds and just a few clicks. The operator is notified immediately of the decision and the process could theoretically take less than one minute. The players click on a link and are taken to an easy and slick process, where they simply press a few buttons and their financial information is securely shared. The players are in full control of the data they share and can withdraw their permission at any time.
We can calculate anything the operator wishes to see. This could be the current balance, disposable income, gambling net spend, or total income. Our software also allows operators to evaluate the rate at which the change occurs. This way, they can determine if a player’s gambling is within their financial limits.
If we don’t have enhanced due diligence (EDD) and responsible gaming, the gambling industry will be overregulated to the point of extinction as it becomes unprofitable. We need to find an answer to the sustainability dilemma that many operators are facing. Sustainability is about not letting people go beyond their means. It is about letting people bet on sports if they are able to do so, but not spending more than they have.
The Gambling Commission has become more strict in the past two to three years when it comes to affordability checks. Operators were asked how they knew someone could afford to bet a certain amount. The White Paper has agreed with the Gambling Commission, and clarified that operators should have confidence in a player’s financial status if they lose PS2,000 over three months, or PS1,000 within one month. The headline stated that EDD and affordability checks should take place.
The discussion about affordability is not limited to the UK. We are also seeing legislators and regulators in other countries consider measures in this area.
In order to solve the problem, the industry must be proactive. If it continues to allow people to wager money that they do not have, then this will continue to happen. Gambling will be regulated to extinction in the minds of the public, just like cigarettes.
