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Guidance

Advisory Board for Safer Gambling (ABSG) advice on proposals for a voluntary code on deposit thresholds

ABSG has given advice to the Gambling Commission in regards to the introduction of an industry measure using net deposit thresholds.

Published
4 February 2025

Last updated
4 February 2025 - Changes

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Contents

Background

What has ABSG said to date on the management of financial risks?

Advisory Board for Safer Gambling (ABSG) has advised the Gambling Commission through its Progress Reports (2021, 2022) and advice on the Gambling Act Review (GAR) (2022) that mandated financial checks on net losses would be the most appropriate regulatory intervention to take forward as one of a number of interventions (opens in new tab) required to prevent harm. In our GAR advice we observed operators themselves concluded that operators would not act unless all are mandated to act and that more stringent mandated checks (opens in new tab) were therefore required to create leverage for improving customer interaction and reducing harm.

In its advice to the Commission Board (9 April 2021) ABSG made the following specific points:

  1. Net losses are a better metric to use, as deposits can be used as savings accounts, seen elsewhere as in utilities allowing customers to accrue direct debit payments.
  2. £500 per month net loss over several months would pick up the 1 percent who are classified as high risk gamblers (Forrest and McHale 2020, opens in new tab), but it would not pick up the wider group who have high likelihood of being harmed - the 25 percent identified in Muggleton and others 2021 paper (opens in new tab). This is why the communications around this needs to emphasise that there is no 'one size fits all' regulatory solution and that actions announced in the short term are a step towards further regulatory measures to improve protection and reducing harms.
  3. Over the longer term, develop a formula for calculating affordability that includes not only expenditure, but also time spent gambling, type of product and age - 3 additional variables that together would give us a much more targeted and comprehensive measure of harm than a £500 net loss per month alone. That formula could be mandated by the Commission - all operators would have to apply it, and the Commission could test and develop it within the single customer view project.
  4. In summary:
    1. focus first on curbing excessive (binge) gambling and agree a net loss trigger of £500 per month for customer interaction
    2. commission work on an algorithm for calculating affordability based on expenditure, time, product design and age
    3. signal that this is the direction of travel and that there will be further requirements on the industry.

What has the Commission done to date?

Over the past 3 years, the Commission has had ongoing engagement with its stakeholders on improving financial risk checks in order to improve protection for consumers. The analysis of the Commission’s November 2020 consultation found that 75 percent of respondents agreed that more should be done to protect vulnerable consumers.

Following the publication of the White Paper, the Commission introduced new proposals and published a consultation on financial vulnerability and financial risk checks. The Commission’s proposed financial risk thresholds for intervention are £125 net loss per rolling 30 days and £500 net loss over 365 days. The Commission consultation proposals on financial vulnerability and financial risk are summarised in Table 2 of the Appendix in this guidance.

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Comments on the proposed net deposit threshold - ABSG advice on proposals for a voluntary code on deposit thresholds
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