HomeInsightsDon’t bet with us. You haven’t paid your mobile phone bill this month, have you?

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The British regulator has now published its Enforcement report for 2018/19 and everyone has had the chance to digest and consider.

The regulator has been busy: 160 regulatory and criminal investigations, 2,000 intelligence reports and ‘hundreds’ of risk-based assessments. £19.6m worth of fines have been awarded and sanctions have been applied to personal licensees. There has also been proactivity – workshops, webinars and instructional videos as well as extensive publication of enforcement actions. The industry is better-informed of regulatory expectations than it has been at any previous time and one has to say that some of the doings that have given rise to Commission action really shouldn’t have happened.

However the drawing of lessons from the immediate past is only one part of these reports from the regulator. They also point to the future and provide clear hints about how regulatory thinking is evolving. Of particular interest is the regulator’s clear conflation of ‘consumer protection’ with ‘affordability’ and the separation of ‘affordability’ from social responsibility. Perhaps for the first time, the regulator sets out what the average Briton in a certain category of employment can expect to have in his or her pocket each month after paying the mortgage, food, petrol, utilities, council tax and so on. The conclusion is reached that on average the British population have disposable income per month from a figure of less than £125 up to £499 – equivalent to less than £1,500 and £6,000 per annum. It is also pointed out that this amount has to cover ‘transport, fuel, monthly contractual payments (mobile phones, cars, life insurance), vehicle maintenance (service, repairs, MOT), clothing and personal care’.

What is significant about this is that this is the first time (to the writer’s knowledge) that any regulator has gone into this degree of detail about the personal circumstances of players and the first time that these notional disposable income statistics have been characterised as ‘clear benchmarks that should drive Social Responsibility triggers’. The Commission almost trips over the line of requiring gambling to be withdrawn if a player hasn’t paid their phone bill that month but rather pulls back at the last minute, merely noting that ‘most people would consider it harmful if they were spending all their disposable income gambling’ and that the financial parameters based around domestic outgoings – ‘affordability’ – should ‘identify instances where an operator needs to understand more’. The regulatory risk that this presents is that it is likely to be unsatisfactory to do no more than identify unlawful sources of funds and pathological gambling (difficult enough though that is) and that – additionally – an operator should be aware of ‘whether customers are spending an affordable amount’. It is this last principle that calls for interpretation. A customer may well want to spend a lot on gambling – an amount which another person might consider ‘unaffordable’. The question is whether a person who may be entirely in control of their gambling and who is using legitimate funds – now needs to be told that their gambling is ‘unaffordable’ and that they should instead be using their money to defray the costs of the things that the Commission lists as monthly necessities – mobile phone payments, car leasing costs, council tax…and so on. The three principles are rather jumbled up in the relevant passages of the Enforcement report and it may be that the regulator is doing no more than emphasise that ‘affordability’ should be a more prominent factor amongst those taken into account by a comprehensive ongoing KYC overview of each player. However it does raise the threat that an operator might be blamed for nothing more than a customer overspending.