50% of gambling in the UK takes place offline, or “IRL” as young people like to say.
In betting shops and bingo halls, high-end casinos and racetracks, the thrill of being there isn’t going away any time soon.
But for retail betting businesses, affordability and source of funds (SOF) checks present a unique challenge. Let’s imagine a customer walking into a casino one evening with £1,000 in their pocket. Ensuring that this person is not staking beyond their means is today a complex business that is likely to end with the individual being frustrated and the casino in question turning away what may well be a perfectly legitimate source of revenue.
A request to look at a payslip or bank statements, for example, is unlikely to be something that can be met at that particular moment in time. Most of us don’t carry these things around with us. And even if we did, or we downloaded them on the spot, is there time to perform a proper financial check, to read and evaluate a statement to discern actual disposable income and establish that income comes from legitimate sources? Unlikely.
That challenge is even greater in a betting shop, where a single large bet often has to be refused because conducting a check in situ and in the moment is simply not possible.
As a consequence, the industry is losing millions in revenue every year. And at the individual business level, we have to drive away our very best customers because there is simply no way to comply with affordability and AML regulations as things currently stand.
Fortunately, that is about to change.
Picture this alternative scene.
That same customer walks into a betting shop hoping to place a large bet: the sort that inevitably triggers an affordability check. They are directed towards a simple self-serve interaction, hosted on nothing more sophisticated than a tablet, that invites them to:
After doing so, and confirming on their own phone that they are happy to share data, a simple yes/no decision is returned in the space of a few seconds.
There is no need to have and share physical documents, no need to manually check those documents, and thus no waiting time. If the customer has the money (as defined by the company’s own risk policies), and a legitimate source for that money can be confirmed, the bet can be placed, there and then.
Perhaps even more importantly, the customer can withdraw access to their data the moment the bet has been placed, giving the sort of peace of mind you can’t enjoy when handing over a physical statement.
A system like the one I describe above enables those who can afford it to bet, and protects those who cannot. It is based on real financial data, so the results are truly accurate. And it can be implemented in almost any real-world environment.
And the really good news: it is all possible today.
We’ve spent the best part of a year speaking to gambing and betting businesses of all shapes and sizes. And it is apparent that managing the affordability process well - without driving away good customers - is equally important in both retail and online environments.
With that in mind we built our solution to support both. Open Banking enables financial data to be shared with nothing more than the customer's own phone. Our own models and machine learning engine enable that data to be interpreted in seconds. And by applying pre-defined tolerances a decision can be returned on the spot.
As a result, it becomes possible to start taking those large bets, helping to improve revenues, keep customers happy (and protected), and stay on the right side of the regulator. Simple.
Of course not all affordability checks for retail gambling need to be conducted in this way. For member’s clubs, for example, a similar process can be conducted online. It is just a matter of reaching out via email, SMS or even good old conventional mail, directing members to a hosted journey in which they can share data in their own time.
But either way, the process is faster, smoother, less invasive and a lot more effective than any way in which it has been done before.