Single Customer View SCV vs Single Customer Wallet SCW by Neil Channing
If you have been reading the previous articles that I've written on the subject of the Gambling Review and the new law that is coming our way you will realise that my main arguments against the idea of having to provide huge amounts of information to bookmakers in order to have a bet are that I don't believe the government should be interfering in the lives of punters, when punters are just pursuing a legitimate activity, and that the operators already have enough information available to them to detect Problem Gamblers, (PGs), without having to bring in strict affordability checks. I do have plenty of other issues with the idea of these checks, possibly the main one being the effect that they'll have on the bookmaking industry, driving customers away, sending people to the black market, costing the Treasury hundreds of millions and potentially destroying the sport of horse racing.
If that wasn't all bad enough I also have a massive problem with this whole process in that I don't trust the operators to collect and store all this data safely and efficiently, and I don't want to have to spend the enormous amounts of time required by the process, just to pursue an activity that I, like 99% of people, am quite happy to take part in quite safely and legally. Although affordability checks are not currently a legal requirement many operators have already introduced them for some customers over the last few years, and some would say that for under 25s, the largest gamblers and those suspected of being problem gamblers that is perfectly reasonable and shows the industry can "police itself". I only have anecdotal evidence here but I am constantly contacted by people who have had to go through this process. Usually they are over 25, they are staking higher than average amounts but they are not PGs. The process has often been triggered because of a losing run with one particular operator and this run may not present a true picture of their overall gambling activity. Often they tell me their account has been suspended, funds are inaccessible, they are asked for enormous amounts of highly sensitive information, they have no way to speak to a real person at the company they are dealing with and emails requesting information or complaining about their treatment are routinely ignored. People that work at operators tell me that they are swamped with cases to deal with and often people wait months for simple cases to be dealt with, that they "aren't allowed" to speak to the customers and that if customers refuse to engage in the process they are happy to simply close their accounts and will often withold any balance.
It's not just the fact that the bookmakers all have different processes, all seem to have not allocated enough resources, all are causing delays to customers and all are very poor at communication, that annoys me. I also simply don't trust the industry to handle all this sensitive data. The people that work at bookmakers are not your bank manager, your accountant or your solicitor, they are often quite low paid young people who regularly move between companies and who also often leave the industry. Handing over much more financial information than you'd need to buy a car and as much as you'd need to get a mortgage, just to have a bet, seems crazy to me but it also seems pretty dangerous when we have no idea which members of staff are likely to see this information, how safely the information will be stored, how long it will be kept for and what will be done with it. People are rightly concerned about scammers online trying to get their banking details, yet some are presenting it as perfectly normal to send in two years of bank statements, copies of your id, pictures of bank cards, share certificates, pension details, your P60 and company accounts without even getting a receipt, being told who will be using this information or when it might be returned. On top of all of this we must worry that the information will be used by the operators for commercial advantage, in an attempt to weed out potential winners and to highlight those customers who might lose more. Obviously, the industry are keen to stress that this is not their aim and they are simply acknowledging that their behaviour in the past has not been perfect and they now wish to, "clean up their own house", but it's this past behaviour which should make people dubious.
The Gambling Commision, (GC), are likely to come through this whole Gambling Review process with more powers and probably less additional money than they really wanted. In February last year they challenged the industry to come up with a Single Customer View, (SCV), solution. This is the idea that there could be a cross-operator holistic view of a gamblers online behaviour so that customers would not have to go through the process of affordability checks with multiple companies and so that winnings and losses from different firms could be seen by all operators and potential PGs can't simply be given a deposit limit by each firm and just open dozens of accounts and deposit the maximum with each. In November 2020 the Information Commissioner's Office, (ICO), concluded that the sharing of data between operators may possibly be legal under UK GDPR as potentially identifying those at harm could deliver a public benefit.
The Betting and Gaming Council, (BGC), are now engaged in a trial with all major gambling operators and overseen by the GC and in February of this year the BGC chose Gamstop, which is an independent not-for-profit organisation that has run the national gambling self-exclusion scheme for some time, to run the scheme. The operators have already invested over £1 million into the trial and I can't help feeling that this will be declared a success and SCV will come in under the new Gambling Act. The minister responsible for the new Gambling Act, Chris Philp, has previously said that the establishment of this scheme is “an important step towards protecting vulnerable people". I feel like the government will nod to the scepticism of people who say the operators should not be given access to all this data and the ability to share it as they can't be trusted and then they'll go ahead with it anyway.
There is so much about how SCV will work that we just don't know but I guess one issue is the problem of updating it in real time and thus the opportunity for "free-hitters" to open multiple accounts instantly after being restricted as a potential PG by one firm. The fraudster or PG could then gamble quickly with each firm and if they lose simply point out that they are a PG and the SCV should have excluded them from depositing with multiple firms. For the "normal" punter one firm highlighting a big loser could be a potential PG might be a problem if wins elsewhere are not being updated in real time. Some might consider the death of matched bettors and arbitrage players as no bad thing, but it's undoubtedly true that these activities are allowing a lot of low wage people with time on their hands, like students and stay at home mothers, to supplement their income. If the SCV doesn't update in real time then any kind of offsetting bet, whether it's hedging or matched-betting, is likely to identify a punter as a potential PG and might cause them to need affordability checks when they need not really be involved in that process. Just for ordinary punters there doesn't seem to be any understanding that it's quite common to go on runs of winning and losing and to win with one firm and lose with another and none of that makes you a PG. If it isn't watertight and the criteria are poorly thought out then it just won't work.
The solution that gambling reformers are advocating for is an independent body, perhaps an ombudsman, dealing with the affordability checks. They suggest that most customers should be subjected to affordability checks but this expensive and time consuming process should not be dealt with by the operators. Punters will send their information to just one organisation, which might be the ombudsman, and the operators never get to see any of your financial data or share that information and you are just given a monthly budget that the independent body decides you can afford and then you get to spend that money with any operator you choose. If we have to have affordability checks this might be the best solution as it stops you having to spend huge amounts of time sending information to multiple operators, many of whom are hugely disorganised, who you might not trust to have that data or to not use it for commercial gain. The downside is you will be sending your data to a separate body, most likely a private entity run by a friend of someone involved with this government, and possibly owned and run by people who don't gamble or understand gambling. The odds on the implementation of this running smoothly are 1000/1 and the damage to the industry that could occur if this company or body fails to do it's job successfully are massive. It's also unclear whether your "account balance" can be updated in real time and if there is still the chance for scammers or PGs to exploit the system.
An alternative suggestion that some reformers and some professional punters have suggested is Single Customer Wallet (SCW). The suggestion here is that a new entity, probably a commercial organisation, is created and they do the affordability checks and can decide a monthly spend for people. It may also give you a separate spend for games of chance versus "games of skill". Probably they simply follow government guidelines and "grant you" a percentage of your income so that the number you get is not hugely subjective. The difference with this idea is that they hold the balance for every punter and you don't actually deposit money to the betting site. When you go to use the betting site you transfer your money from the SCW and is returned to that wallet after you have completed your business, either the settlement of your bet or the end of your casino, poker, slots or bingo session.
For the operators this is a terrible solution as they have spent many years building up "one stop shops" encouraging people to "do all their gambling in one place" and hopefully leaving a balance there without continually withdrawing. Under SCW the transaction charges for them will be high as will the admin, but the real problem will be that the total change in the value of a customer. Currently they have all the advantages of customer loyalty, like price indifference and the chance to cross-sell, that a one stop shop brings. If the value of a customer goes down then the price of acquisition and retention will have to go down and that means less advertising spend, less affiliate payments, less free bets, less bonuses and less concessions. Gambling reformers may like the sound of all that but it will turn the industry upside down and is a threat to many ancillary businesses, like media organisations, and the jobs that come with them.
The problems for the industry from SCW are massive though and I don't think I have seen them discussed. You are creating a totally new entity that controls the funds currently held by a dozen large multi-national corporations. Do you realise how much that is? We are talking billions of pounds being controlled by who? A company that wins a contract to run this thing from this government? Maybe Dido isn't too busy.
Who would oversee and regulate the SCW provider? The GC? We have already established that they haven't got enough resource to do what they are currently doing. Suddenly we are allowing a single, presumably private, entity to have total control and to gain all the knowledge and data of the gambling spend of every punter in the UK? Presumably there would have to be just one entity controlling this so what would now be one of the biggest financial institutions in the country gets to operate, and make a ton of money, with zero competition? Presumably they get to decide the transaction charges and they charge the operators to do the KYC, AML and Affordabilty Checks for a price set by them.
Now we have one place where all deposits are made...what happens if it crashes? If I'm Bet365 and no UK customer can play on my site because the SCW has crashed and it's day one of the World Cup who do I sue? What happens if it gets attacked by hackers? How would punters be compensated? Can you see the government bailing it out with billions of pounds so that we all get paid?
Presumably the operators wouldn't be constantly emailing back and forward to the SCW asking if Joe Bloggs is Ok and to find out his limit so there would be a certain amount of access to the details, perhaps you can log-in to the site and run a check. Who would have that access and how you would control it is a massive question. Presumably every time you open a new gambling account the operator could now log on and see your lifetime profit and loss, what products you have ever used, your average spend and every other detail of your financial life. If you believe that the GC are going to be able to handle the regulation of that then I don't know what to tell you.
My guess is that the White Paper will reveal that SCV has been a great success in the trial, and that will be the solution they pick as they have already spent a load of money on it and it presents the least barriers. Whether that is the best solution is a totally different matter. I still maintain that the best idea is that the operators use the information they currently have to attempt to identify potential PGs with no need at all for affordability checks. It does feel like I am going to lose this argument but the White Paper, which will probably be out in the next two weeks, is not the end of the process. It is kind of like a menu of what will be in the final bill and a starting point for discussion. If you have strong views on how you would like to see this thing play out then you really need to contact your MP. I suspect the number of letters they are getting has slightly dried up but once the White Paper has come out there will be a new flood of people writing to say this isn't what they want. I've heard that currently MPs are getting many more letters from those objecting to the changes than are encouraging them and every letter helps.
If you want to write to your MP and tell them what you think about the Gambling Review there is still time. The White Paper showing what will be in the Gambling Act is probably still a little while away from publication and a lot of letters going in can create the pressure that brings change. If you want to use my template letter you can click here...
Do make the effort to send off a letter to your MP. I've written one for you here
Neil
