Affordability. How much is enough?

Nick Arron of Poppleston Allen LLP discusses how clubs can improve compliance through local knowledge.

Nick Arron

Affordability has been a much debated topic over recent months within the industry. It is one of the topics of the current Government Review of the Gambling Act 2005. In the Call for Evidence, in December 2020, the Government consulted on tighter requirements for operators to protect customers. One of the questions asked by the government concerned greater controls on online gambling accounts, including but not limited to deposit, loss, and spend limits and asked for evidence on whether any such limits should be on a universal basis or targeted at individuals based on affordability.

The Gambling Commission themselves have consulted twice on affordability during z2020/2021, focusing on online operation rather than land based.

There were a number of Government announcements over recent months suggesting that affordability will be introduced as part of the Review of the Gambling Act. What we don’t yet know is to what extent that would impact on land based bingo. Recent statements in Parliament and from Government suggest that the reforms are not focusing on a night at bingo, and that the Government are recognising that bingo presents less risk than other forms of harder gambling.

In recent years the Gambling Commission has introduced customer protections with reference to affordability checks within their guidance on customer interaction.

Affordability was the subject of the Gambling Commission’s letter to the land based bingo industry on raising standards, in October 2021. The Commission asked bingo club operators whether they consider affordability to ensure vulnerable customers are identified as early as possible and interacted with appropriately?

So, what is the current position regarding affordability in bingo clubs?
Affordability is not directly mentioned in the Licence Conditions and Codes of Practice. The application of affordability in bingo clubs relates to customer interaction. Social Responsibility (therefore mandatory) Code provision 3.4.1 requires licensees to interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. The code provision requires licensees to take into account the Commission’s guidance on customer interaction.

The Gambling Commission’s formal guidance for premises based operators on customer interaction refers to affordability. So, in order to comply with social responsibility code provision 3.4.1 we must take into account the Gambling Commission’s guidance on customer interaction and in doing so must take into account the paragraphs of that customer interaction which refer to affordability.

There are five paragraphs in the guidance on affordability. The first refers to the historic position, that gambling operators have not systematically considered customer affordability when developing their customer interaction policies. The guidance talks about deposit or loss thresholds as a main or sole prompt for customer interaction, but this reference would be more applicable to an online business than to a land based business. Land based businesses’ customer interaction tends to be more based on customer behaviour as the customer is in the venue, rather than looking specifically at spend.

The next paragraph of the Commission guidance refers to examples of customers spending more than they can afford, but again if you look at the Gambling Commission’s regulatory action this relates to online businesses rather than land based, except for some land based casinos.

The next paragraph of the customer interaction guidance on affordability refers to setting threshold levels at an appropriate level. In doing so operators are pointed towards the Office of National Statistics publications of levels of household income, and to awareness of the difference between disposable income and discretionary income.

No further guidance is provided by the Gambling Commission on affordability.

What can the clubs do to improve compliance?
Affordability is one aspect of knowing your customer. I have always believed that land based bingo venues, know their customers better than the rest of the gambling industry, because of the social nature of bingo clubs and the interaction between members of staff and customers. Because operators know their customers, they are in a better position to be able to assess affordability. If you know your customer you know what they do for a living, you know what they generally or habitually spend, then monitoring affordability is possible. It does require you to keep records of interactions, but you are required to keep records of customer interactions in any event. Customer intervention is about identifying, interacting and then evaluating. Land based bingo is very good at identifying and interacting, it may not be so good at evaluation which is where you may need to improve compliance.

Affordability is a current significant topic of gambling regulation. It is largely focused on online. However, it is a requirement that you consider affordability in your customer interactions and the more you understand the subject the better prepared you are for the changes which may come about with a Review of the Gambling Act 2005.

Nick Arron is a partner at niche licensing law firm Poppleston Allen. Poppleston Allen act for The Bingo Association and advises its members. Nick can be contacted via email or telephone 07968 805559.