Up all night to get lucky
The White Paper may not even mention affordability. Good news?
Welcome to the latest edition of Pinchpoint, your go-to source for news and practical insights into affordability and financially responsible gambling.
This month we look at the specific wording used by the (then) minister with responsibility for gambling, Paul Scully, to discuss the subject of affordability measures.
The wording, we suggest, was carefully chosen.
A game of risk
“It may be more accurate”, Scully said, during his brief stint at the Department for Culture, Media and Sport, “to call them ‘financial risk’ checks – checking that a higher than usual level of spend is not itself an indicator of harm."
Mere spin? We think not.
‘Financial risk’ means something very specific in the world of personal finance, credit and banking. Such things do not drop into a minister’s speech (in lawyerly quotes - note) by accident. Gambling operators and customers would be wise to take note.
The Financial Conduct Authority defines four indicators of financial vulnerability which lenders are expected to look out for, and act upon. They are: resilience to financial shocks; capability to handle money; life shocks (traumas like divorce or bereavement), and long-term health conditions which could impact a person’s ability to earn a living or consumes all their money on care.
According to the FCA’s most recent annual survey, nearly 45% of adults in the UK exhibit one or more indicators of financial vulnerability. Yes, that’s you.
This is roughly the same number of people who gamble, and many times greater than even the most pessimistic count of people experiencing gambling harm.
No-one yet knows what the Venn diagram of these three groups looks like, but the potential overlap and interaction between financial vulnerability and gambling harm is now on the agenda. It could soon become law.
There are signs that a better understanding of the financial lives of gamblers could yield surprising insights, some of which may even challenge the consensus around “markers of harm” based purely on gambling behaviour itself.
Analysis by Department of Trust, discussed at the KnowNow conference in London recently, suggests that the most intense gamblers are not all draining their bank accounts with their wagering. Conversely, those that do empty the kitty are not always the most frequent or extravagant players.
Night-time economy
An important and interesting academic paper, just published by Dr. Kas Ghaharian at the University of Las Vegas, takes data from a gambling-focused eWallet to identify different profiles of gamblers in the US based on deposits and withdrawals. It also yields some surprises.
Like DoTrust, this data is based entirely on financial flows and has no access to wagering data.
The second largest cluster in the UNLV study was of people who gamble mostly at night: a typical red flag in behavioural risk models. 80% of their deposits happened between 1am and 5am.
Yet this group was also the lowest value depositors in the whole study by some margin. They withdrew the least, topped up their accounts less often, and overall had the lowest net spend of all the clusters.
To our eyes, this is a classic ‘leisure player’ profile who is buying time, having fun, keeping it under control, and not seeking profit or chasing losses. Precisely the kind of customer every responsible operator wants to cultivate.
Open relationship
Public adoption of open banking is on the rise.
While the White Paper debate rumbles on (and on, and on), it is interesting to see the progress being made with regard to what might well be the backbone of the infrastructure that would be needed to support any eventual decisions around affordability.
The recent news on the take-up of open banking, for instance, demonstrates increasing consumer awareness and adoption. The data for January from Open Banking Ltd, the body set up to oversee the implementation of the Competition and Market Authority’s plans, said there had been over one billion bank account data calls in the month.
These are people agreeing to share their bank data with third parties for everything from affordability checks and scoring to budgeting tools and saving advice.
The data comes on the fifth anniversary of the introduction of the second Payment Services Directive (PSD2) and shows that open banking usage has risen 120% over the past 12 months.
While open banking still has further to go, we think it is important for those in the gambling space who rail against intrusive checks on the part of gambling operators to understand the actual technological advances being made and how that might allay some of their fears over personal intrusion.
Open banking gives the means but not the ends. As Pinchpoint has argued before, only proper government guidance via the White Paper followed up by sensible implementation on the part of the Commission will give the sector the security of knowing what happens next.
But the figures on open banking do at last offer a view of what the future might look like for operators and punters alike.
Have you tried…
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About
The newsletter is published independently under the editorial supervision of Scott Longley of +More Media. Pinchpoint is not affiliated with any other publications. Pinchpoint is funded by Department of Trust and BetBudget.
We hope you find it useful and, as ever with these things, if you think any of your colleagues would be interested, then please feel free to share.
Contact
Scott Longley, scott@andmore.media
