Gambling Review... How the Checks Work Now... by Neil Channing


 There are basically three kinds of checks already currently being made by UK bookmakers on their customers and I thought today I'd look at the differences and talk about how they have been used and the implications that increased regulation can have on the industry.


 First up we have basic identity checks often known as "Know Your Customer" and shortened to KYC. The bookmaker needs to know your name, your age and your address. Bookmakers have been obliged to carry these out for many years now, but in 2019 the Gambling Commission ruled that a gambling business can't ask you to prove your age and identity as a condition of withdrawing your money if they could have asked you at an earlier point. Commonly customers will be asked to send a form of photo-id, like a picture of their passport or driving licence, plus a utility bill showing their current address. The GC do not specify exactly which documents can or need to be sent in, but they can fine companies who delay withdrawals when information has been sent in.


 Most customers are fairly used to these kind of checks, they have been around a while, people generally see them as reasonable and there isn't much evidence that they have pushed people to the black market. However, punters often complain that the companies are using these simple ID checks to attempt to turn away potential winning customers, that often they are asked to send the information multiple times, that accounts are suspended for long periods while these simple checks are apparently being done and that withdrawals can be delayed. All companies have rules in place that the account is only to be used by the person who opens it and generally the companies are covered by suggesting that any delays are purely down to genuine suspicions about who they are dealing with.


 A definite issue which isn't often talked about is how all kinds of checks have lead to an increase in administration for the operators who now spend increasing amounts hiring compliance personnel. The delays in verification and withdrawals that you hear about are often from smaller firms with fewer staff. It is definitely true that increasing the burden on operators to deal with compliance issues is a barrier to entry to the gambling market, penalises medium sized operators, and makes the market less competitive, as only the largest operators can afford the huge resources needed to deal with the regulation efficiently. Anecdotally I have heard multiple stories of accounts suspended for months while various checks are done on customers, who have sent in documents immediately when asked, and the customer being told "it just takes a long time as we are snowed under". With greater regulation this problem can only get worse.


 The 2nd kind of check that operators carry out is Anti Money Laundering (AML). The regulations around this have been around a very long time, are pretty complex and change quite often, so I won't go into much detail here. From a punters point of view the difference between KYC and AML is the operator will be asking about your finances rather than just who you are and if you are old enough to gamble. Basically, they are going to ask you for bank statements and for information relating to irregular income patterns on your bank account, for example if you pay in large amounts of cash or receive a big bonus or an inheritance. You might be asked to provide company accounts if you are self-employed or a P60 if you are employed, and all of these are to judge where the money you are funding your betting account with comes from. Most customers will never reach the thresholds that need to be hit for these checks to come in, but larger punters will be aware that operators have been seeking this sort of information for years.


 There is no accurate estimate or any data to show if these regulations drive people away from betting with licensed UK operators and into the black market, but you'd imagine that they probably would, and some would argue that we should be pleased that people with "dodgy money" are unable to gamble as much as they want with UK licensed businesses. However, again anecdotally, I have spoken to many customers who would question how this information is used, they suspect that the operators may attempt to weed out business that is unprofitable under the guise of AML regulation. Others have suggested to me that they don't trust the companies with such sensitive information and when I questioned one large company for some basic information about GDPR, who sees my information? How long do they hold it for? Can it be accessed by junior staff? How is it stored? I simply didn't get a reply to my email.


 I think it's very reasonable to assume that these kind of intrusive AML checks have already driven away many customers who were doing nothing illegal, but were just unhappy with the level of detail they were being asked for, and some of those customers will have gone to the black market. That is not to say I disagree with checks that help fight money laundering, but I don't believe the operators are currently doing a good enough job and I feel their procedures are badly lacking. If the number of customers who will be affected by these kind of checks is to grow 100x I have zero confidence that the operators will be ready to deal with the administration effectively.


 The 3rd kind of check is the one that many gambling reformers would like to see brought into law in the new Gambling Act and that's the Affordability Checks which are purely about protecting customers from the dangers of problem gambling.


 Currently all UK Operators are committed to attempting to protect customers from problem gambling and many studies show that fewer than 0.5% of gamblers are problem gamblers. However, there has been a recent growth in the total number of all gamblers and so that means a growth in the total number of problem gamblers. This new gambling act has been a long time coming, during that time the US market has opened up and it's definitely true to say that UK operators have much bigger fish to fry across the ocean and they don't want anything to rock the boat at home, so they have mostly decided to try and head off any big changes in regulations that might come with the new act by making changes themselves.


 All firms have ways to measure potential problem gamblers, and these include the length of time spent on the site, increasing stakes to try and win back losses, multiple deposits in a day, banks declining deposits and withdrawals being immediately followed by deposits. Customers are regularly emailed when any of these trigger points come up, they may be asked to contact the operator and they could have to chat to a member of staff who will ask if they are comfortable with the amount of time they are spending on the site, the amount they are losing, if they know about the deposit limits they can choose to set, if they would like to take a time out, to have regular breaks or for the site to be blocked to them.


 In all forms of addiction it is a commonly held view that people will only quit when they are ready to do so, when they have hit rock bottom and when they have accepted they have a problem. In my opinion once the firms have asked all these questions and been told there is not a problem, and that the customer is very happy to continue without any intervention by the operator then that should be the end of it. Closing an account, or restricting deposits to such an extent that the customer is going to stop using that site, will just drive the problem gambler to another avenue to feed their addiction. For the customer who is caught up in this who is not a problem gambler, they will simply move to other operators and eventually they'll have to either stop betting or move to the black market.


 If the customer refuses to engage in that process or doesn't "pass" then they will become subject to affordability checks. Even if you answer "correctly" all the questions, saying you are quite happy with the time you are spending on the site, you are totally comfortable with the amount you are gambling, you can give valid reasons why you have upped the frequency of bets or your stakes, you can still face a "Computer Says No" situation where you are moved onto the next step of having to undergo affordability checks.


 You'll now be asked to provide details of your salary, a recent payslip, three months bank statements showing your salary and your P60. If you've received a bonus at work, you'll be asked to send the payslip and preferably a letter from the employer confirming that. If you have pension income, you'll be asked to send in a pension statement. If you receive a lump sum from a pension, you'll need to send in a letter signed by your solicitor or accountant to confirm that. If you have savings, then a statement from a bank or building society showing them. If you've sold a property a signed letter from an accountant, solicitor, or the estate agent to confirm this. Similar letters would apply for money received from the sale of shares, a company sale, any maturing investment policies, inheritance, a gift, or a compensation claim. If you run your own business, you'll need to send in audited accounts. If you've won money from the lottery, a casino win or a betting win that will need to show on an account statement from the operator who you won from. That latter one is particularly interesting as I don't think any operator will accept that you may have lost a lot with them this month, but you won a lot from one of their competitors or even from them two months earlier.


 I listed them all, and I appreciate that for a lot of people it will mean simply sending in their P60 and their bank statements, but I think you'll agree that the whole list is a huge amount of information and much more than you'd need to buy a car with finance, to get a mortgage and certainly way more than you'd need to buy shares, cryptocurrency or to buy a picture of a gorilla that you sort of own but can't easily explain why. It must also be remembered that this is to gamble with your own money, not to get credit, and a credit check on you will be done by the companies in some circumstances although it isn't clear exactly when, or if it will be merely a "soft check" that won't affect your credit rating.


 So these are the three reasons for checks now and what those checks look like and while we might agree that they are all done for good reasons, there is definitely a massive amount of disagreement as to how much wider the group of people facing these kind of checks should be and how much information should be asked for and I'll talk about that and the implications for horse racing next time.


Do make the effort to send off a letter to your MP on the imposition of affordability checks. I've written one for you here