Reminder: nothing has changed

Another day, another swingeing Gambling Commission fine for AML and affordability breaches. This time around it was Gamesys in the dock, to the tune of £6,000,000. I don’t take any great pleasure in picking through the bones of these settlements (“I told you so” isn’t a great sales or marketing strategy after all) but it is important to understand what is happening.

A partial list of issues reads as follows:

• “No risks were identified when one customer deposited £8,255 within three days of opening an account, another lost £5,968 within five weeks of opening account and another lost £17,482 within 34 days of opening an account”

• “In certain circumstances, some customers were able …. to spend significant sums without AML checks being conducted – one customer deposited £14,585 in a 28 week period, another deposited £18,884 in just over six months and another deposited £34,280 in five and a half months”

• “Conducting inadequate customer due diligence … of customers, including one who deposited over £25,000 in three months, another who deposited over £58,000 in six months, and another who deposited over £65,000 in six months”

Which all adds up to: not checking actual financial data when passing through the type of spend thresholds that have now been clarified in the whitepaper: ie a loss of £1,000 in a day or £2,000 in the space of three months. 

So far, so much business as usual. So why the blog post? Well, until the message that this IS business as usual has sunk in, we’ll keep beating the drum.

Affordability checks are here today

To read significant chunks of the gambling and racing media you would assume that affordability checks are something that is being proposed. Barely a day goes by without some dire warning about what will happen to the British racing industry, gambling industry, and humble punter if these checks are introduced some time in the future. In many cases, they come from people who really should (and probably do) know better.

But of course this is all absolute nonsense. They are here today, and they have been here for years. Ironically, everybody knows this. It is 10 months since Nick Luck interviewed Andrew Rhodes on RacingTV, and a key part of that conversation was the former attempting to make the latter acknowledge this truth:

Affordability and AML checks are taking place today, and fines for not conducting them are being imposed today.

Remembering this central fact helps to focus the mind, or at least it should do. The campaign to do away with affordability checks isn’t one that is in favour of the status quo. It is one that requires change in order to succeed. And it there’s one thing any observer of Government, or indeed life in general, should be aware of, it is that change has a habit of happening pretty slowly.

A few weeks ago I predicted that ‘nothing’ would happen in 2024. That wasn’t a joke. It should be entirely obvious to anyone in the industry that the UK Gambling commission will be expecting operators to conduct affordability checks this time next year, and will be fining those who do not.

Given this is the case, it might be worth asking what you intend to do over the next 12 months. Carry on asking for paper bank statements and spending time and money working through them with a biro and calculator? Watch customers disappear when you ask them for financial data because you are asking them to do all the work - and giving them every possible opportunity to think twice?

To me, that doesn’t seem sensible unless you really like watching your most valuable customers churn. 

Let me paint a different picture. We’ve just onboarded our latest customer. This particular job was a full integration, so that ClearStake is embedded in compliance processes and happens almost automatically when required. How long did it take to set everything up? Well, there was a certain amount of back and forth, but not much more than about two weeks all in. Probably a few days of actual work.

For that small investment, that operator will be spending 2024 enjoying significantly reduced customer churn. And when they find themselves in the same position this time next year, they’ll already be ahead of the game. The penny will drop sooner or later for every operator. The ones who act sooner will win.

Enjoy the rest of your year!