Rate of Frictionless Risk Checks Increases, According to UKGC
The UKGC reports a higher-than-expected rate of frictionless risk checks.
Key Facts:
- The UKGC launched a financial risk checks pilot last August
- The results from the second phase are better than the first
- The second phase results are also much better than initially predicted
In August 2024, the UK Gambling Commission (UKGC) launched the first phase of its financial risk checks pilot. The three-phase project was highlighted in the UK’s gambling review white paper as one of the key recommendations that should be implemented.
The results from the first phase showed that approximately 95% of risk checks were frictionless. This was seen as a major success by the UKGC. For the second phase, the rate of frictionless checks was even higher at 97%.
A check is activated whenever someone’s net deposit exceeds £500 in a calendar month. A net deposit is the total amount of money deposited, taking away the amount the person has withdrawn. For example, if someone deposits £1,000 and withdraws £500, their net deposit would be £500.
Results from the Second Phase
For the pilot’s second phase, the UKGC carried out roughly 1.7 million assessments on gambling sites’ risk checks. A total of 860,000 accounts across three separate credit reference agencies were involved. The 97% figure is much greater than the 80% predicted in the gambling review white paper.
When the white paper came out, there were concerns that risk checks could become problematic and create issues regarding the privacy of customers. The fact that nearly all checks have been deemed frictionless shows that there’s no real cause for concern.
The UKGC suggested that the higher rate of frictionless checks could be due to the second phase of the pilot using more recent data from operators. Helen Rhodes, the UKGC’s Director of Major Policy Projects, has said the following:
These further findings from the pilot have helped us understand the extent that assessments could be conducted in a frictionless manner. Building on our staged approach to the pilot, we will no further explore data consistency across credit reference agencies, as well as how to support operators to identify the severity of financial difficulties that a customer may be experiencing and how they could support these customers.– Helen Rhodes, UKGC Major Policy Projects Director Comments on Risk Check Results, iGamingBusiness
Interpreting the Data
The pilot has enabled the UKGC to gain a better understanding of the types of bettors who trigger risk checks and what their financial profiles are like. Of the three credit reference agencies involved in the pilot, two revealed some key data.
This showed that bettors who passed the £500 net deposit monthly threshold were more likely to trigger a direct risk flag than those who didn’t meet the threshold. A direct risk flag allowed operators to receive data directly from credit reference agencies.
Those who passed the threshold were two to four times more likely to be working on a debt management plan. They were also two to five times more likely than the average UK adult to have a default of some kind in the previous 12 months.
The Third Phase
The UKGC has revealed that the third and final phase of the pilot is currently underway. It plans on using the data from it and the previous two phases to determine how checks can best be utilised in order to protect financially vulnerable bettors.
The organisation also plans to reduce the number of inconsistencies between credit reference agencies and support operators looking to implement more detailed checks. The third phase is in its analysis phase, with the data-acquiring part having ended on 30 April.
