For years, affordability checks have been like a boogie man for most markets. It lurks as a threat but it has yet to manifest into something operators and regulators have ever had to actually confront.

That is starting to change, though. The UK Gambling Commission began a pilot program on affordability checks in August of last year. The government assures the program will implement a “light touch” in regards to assessing whether players or gambling responsibly or not, but for many the concept at all is a non-starter.

For now, the pilot is looking at users with £500 in deposits a month, but the plan is to drop the number to £150 next month.

In North America, the idea of affordability checks still feels unlikely, but these developments at least raise the question of whether or not Canada will consider them in the future.

Privacy and politics pose challenges

During a presentation as part of SBC’s Player Protection Day, Vixio’s Gaming Compliance Managing Editor Joe Ewens said it is an inevitability, but also conceded that the changes are far from imminent.

“Some [customers] don’t like the idea of gambling operators being able to look into their personal finances. Also on a political front, in some jurisdictions, it’s crossed a political and ethical boundary around privacy and the right for people to spend their money as they wish,” he observed.

“So while we see the concept growing, it’s certain to remain a politically charged area for gambling regulation.”

“In theory, affordability checks are a potentially effective safer gambling tool, but they require a level of engagement from players.”

In the meantime, it is not as though the issue of affordability isn’t top of mind for Canadian regulators.

There are currently measures in place in Ontario, for example, requiring operators to monitor customer behaviour and intervene when certain behavioural signs indicate there could be an issue. Focusing on markers of harm and behavioural triggers as opposed to pure financials is the way several jurisdictions have tried to address the problem so as to avoid the burden of affordability checks.

“We have already seen both third-party providers and operators themselves develop and implement monitoring systems that enable operators to evaluate the behavior of players and intervene based on behavioral triggers,” observed Vixio Chief Analyst James Kilsby.

“It’s been an obligation in the UK and several other European markets for several years but I do think what we are seeing as part of the trend is that it is becoming more common for regulations to directly mandate monitoring and intervention.”

Ontario enforces monitoring standards

The Alcohol and Gaming Commission of Ontario (AGCO) is certainly paying attention to what operators are doing on that front. They may not be deploying new programs and initiatives, but they are taking a particularly strong stance on enforcement.

In the U.S., VIP programs have largely gone unquestioned, but in Ontario, operators like PointsBet and Apollo Entertainment have paid six-figure fines for failing to meet the monitoring standards set forth in current regulations.

In many ways, these responses stem from the same motivation driving the affordability programs in the UK.

“We want to tackle cases where customers have been able to gamble large amounts without any checks or support, where it was later identified that this led to significant harm,” UK Gambling Commission Director of Major Policy Projects Helen Rhodes said of the program.

“But we are proceeding cautiously to test whether and how financial risk assessments could be introduced in a way that supports high-spending customers in financial difficulties but also supports a frictionless customer journey for the vast majority of customers.”

Effects on customers worth considering

This friction is the primary reason operators fear that affordability checks could run counter to their intended purpose.

In a 2023 survey conducted by SBC in tandem with IDnow, operators confirmed that customer friction is already a huge issue, particularly when it comes to sensitive information. More than half of respondents said the biggest drop-off in the onboarding process came when potential users were asked to submit documents related to personal financial information.

“In theory, affordability checks are a potentially effective safer gambling tool, but they require a level of engagement from players. For those bettors unwilling to provide documents or who are wary of allowing a credit reference check, the chance to sign up with black market operators will become an attractive option,” SBC Content Director Ted Menmuir noted at the time.

In Canada, consumer credit reports already play a role for operators when it comes to compliance. In order to be in line with the Financial Transactions Reports Analysis Centre of Canada (FINTRAC), operators utilize thin credit reports from agencies like TransUnion or Equifax to verify customer identities. For now, these checks fall into the “soft” category and do not impact someone’s credit score.

“Some [customers] don’t like the idea of gambling operators being able to look into their personal finances.”

The UK program looks at elements of someone’s finances like bankruptcies and personal debt, which would qualify as a “hard” credit check in Canada. In other words, such an inquiry wouldn’t just be perceived by many users as invasive, it would potentially also have a negative effect on their credit score.
Improbable, but not impossible?

With so many fundamental differences in how credit is determined across the two countries, it would arguably be difficult to transplant the UK pilot program across the pond.

However, it would be naive to assume that it is impossible. As we have seen with advertising, there are lessons to learn from older markets. But, we’ve also seen that Ontario is an example of a group being proactive about player spending. Perhaps this particular boogie man’s bark might just be worse than its bite.

This article first appeared in the January 2025 issue of Canadian Gaming Business magazine.