Financial risk check proposals – open letter to Andrew Rhodes, Gambling Commission CEO

20th September 2023 (Updated 25th September 2023)

This is a response to the open letter (opens in a new tab) that Gambling Commission CEO, Andrew Rhodes wrote to Racing Post readers on 19th September 2023.

Dear Andrew Rhodes,

As an avid Racing Post reader I would like to thank you for your open letter on 19th September 2023 to all Racing Post readers. I am grateful to the CEO of the gambling regulator for taking the time to reach out to concerned consumers directly.

There are a number of points in your letter that I seek clarity on. Without clarity on these details it is virtually impossible to respond to your consultation on the Financial risk check proposals in a meaningful or useful way.

‘It’s estimated that just 3 percent of accounts would undergo financial risk assessments’

Can you please explain where this estimate comes from, how it is calculated and how you are defining an ‘account’?

In the Summer 2023 Consultation Document (opens in a new tab) by the Gambling Commission Table B (page 68) states that 3.2% of ‘active’ accounts would meet the requirement for a ‘significant losses over time’ financial risk check and 2% of ‘active’ accounts would meet the ‘binge gambling criteria’. Obviously there could be some cross over between the two but even on your own assessment the minimum percentage would be 3.2% which you state would be 1 million accounts. This alone is above the 3% number in your letter.

The Gambling Commission suggests the number of ‘active’ accounts is over 31m from data collected. You do not define what an ‘active’ account is. This compares with the Patterns of Play (PoP) study (opens in a new tab) from 2019 data where they estimate there were 10.2m accounts registered in GB that had at least 1 bet over a year with the major operators. From these accounts 4m accounts placed gaming bets and 8.8m accounts placed betting bets. The accounts sampled were 37.5% of the gaming market and 85% of the betting market. So the maximum number of accounts that actually bet are 4m/0.375 + 8.8m/0.85 = 21m. As some accounts bet on both gaming and betting the total number of accounts is likely to be c.17m (21m * 10.2m/12.8m).

When we combine Gambling Commission data that a minimum of 1m accounts would face financial risk checks with the PoP numbers we find that 5.9% (1m/17m) of accounts who place at least one bet a year would be subject to checks. This is far above the estimate in your letter. Please can you explain to Racing Post readers the reason for this difference? Is the Gambling Commission using accounts that have not placed a real money bet for over a year in its calculations?

‘by our estimates at most just a tenth of that 3 percent would not have a frictionless check via credit reference agency or open banking data’

Can you please explain where this estimate comes from, how it is calculated and if open banking data is regarded by you as ‘frictionless’?

You provide no evidence for where this figure comes from. How have you estimated that 90% of financial risk checks can be done through credit reference agencies and open banking.

What percentage do you estimate could be done solely through credit reference agencies with zero friction? Do you have any evidence that any checks could be done this way?

Furthermore you do not state whether you regard open banking as ‘frictionless’. This is crucial information to be considered in replying to consultation.

Are the numbers you quote directly from the DCMS estimates in Gambling White Paper or are they calculated by the Gambling Commission?

On page 223 of The Gambling White Paper (opens in a new tab) it is suggested that c.3% of accounts would require an enhanced spending check in the first year. They also state that 80% of checks could be done through credit reference agencies, 10% through open banking and 10% through people sending in private documentation (such as bank statements).

Are these DCMS estimates the sole source for your estimates in your letter? If they are, why have you used those numbers instead of the 3.2% and 2% Gambling Commission numbers I mentioned above?

I wrote to DCMS on 31st August asking for clarity on how their numbers were calculated. I am yet to receive a reply. I would be grateful if you could use your position as CEO of Gambling Commission to get clarity from the DCMS on the numbers. In particular, what is their definition of an active account? Are they using accounts that have not placed a real money bet for over a year in their calculations?

Your whole consultation is based on the premise that the estimates you mentioned in your letter are correct and unambiguous in their meaning. Clarifying their source and the full methodology behind their calculation is critical for everyone trying to respond to your consultation.

Yours sincerely,

Chris Fawcett