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Attorney: Affordability Checks’ Impact Underestimated

A leading gambling lawyer has warned that the financial blow likely to be caused by controversial affordability checks has been underestimated by the UK government. 

Bahar Alaeddini, a partner at specialist gambling firm Harris Hagan, predicted a “significant drop-off” of customers because they did not wish to consent to requests for information.

In April, the UK government published its long-awaited proposals for gambling reform in a white paper, which estimated the likely impact of what it described as “frictionless checks” on the gambling industry.

Figures from across British racing have expressed their concern over the knock-on effect of such checks, which it is claimed could wipe tens of millions of pounds from the sport’s income if punters refused to submit to them.

“The key issue here is the meaning of frictionless and whether it means consent-free, and really the worrying disconnect between the government’s policy and practice,” said Alaeddini. 

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“It seems to me the practical reality within the industry is that there’s going to be a significant drop-off rate of customers after receiving a request for consent, whether for a credit reference agency check, open banking, or, indeed, to go through a manual check. That is going to be, in my humble opinion, far greater and higher than the amount modeled in the white paper.”

In July, the Gambling Commission published a consultation on how affordability checks would be put into effect, which set out that information provided by credit reference agencies might not be enough to prevent large numbers of customers having to undergo more intrusive checks. The checks can include analyzing information about customers, such as their postcode area and job titles.

Sports minister Stuart Andrew told MPs this month that financial risk checks would be introduced only when they were genuinely frictionless, and suggested such checks could be piloted to make sure they work.

Alaeddini, who was speaking at a webinar on gambling compliance, added: “I welcome the confirmation last week that checks will be rolled out only when the government is confident they can be delivered frictionlessly.

“There’s no doubt extensive support in the industry for levelling the playing field and providing consistency on these checks, so the positive thing is the white paper was an acknowledgement from the government that people should spend their dosh as they wish to. The challenge remains the implementation of the government’s policy objective.

“As the minister has acknowledged, if the commission doesn’t get this right, it will be very much open to challenge, which nobody wants because it’s going to significantly delay things.”

Gambling Commission chief executive Andrew Rhodes has claimed that three percent of all betting accounts would be subject to enhanced affordability checks, of which around 90% would be carried out through credit reference agencies and open-source banking via a regulated third-party provider. He also said checks would be carried out only on those betting online and would not take place in high-street bookmakers or at racecourses.

However, bookmakers have warned affordability checks on customers will inevitably extend into betting shops, and David Pluck, who has 35 shops across Merseyside and the north-west, has called for more clarity.

“I’m surprised some people don’t think checks have been happening,” said Pluck. “We do checks on customers that come in that appear to be unusual. We’d expect the Gambling Commission and the white paper to give us some sort of framework to work alongside, as what we want is some clarity.”

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