Bank Data Analysis Suggests UK Lenders Could Be Unwittingly Fuelling Gambling Problems 

Gambling issues are a hot topic, with the world turning to online casinos and sportsbooks as quickly as it is. Most governments have implemented ways to curb gambling addiction and continue to aid those affected.

One of the UK’s most recent interventions is GamStop, the Gambling Self-Exclusion Scheme. GamStop is a free online tool that enables users to block themselves from all gaming websites with UKGC (United Kingdom Gambling Commission) licences for a specific period of time.

However, this doesn’t help those who don’t self-exclude, and it has no effect on non-GamStop casinos. Credit cards have already been banned in the UK as payment methods on online betting platforms.

The main issue as per British Gambler experts seems to be that there has traditionally been nothing to deter gamblers from using alternative borrowing methods to fund gambling activities. UK financial institutions may be lending millions weekly to individuals who gamble a high percentage of their income.

A credit technology company assessed the applicants’ financial activities over six months by using artificial intelligence and open banking data from their banking accounts. According to the findings, lenders may unintentionally encourage problem gambling.

They’re doing this by granting credit to clients who often deposit money in betting accounts or use it to place bets at High Street bookies. This company rejects anyone who does one of the below two things:

– Consistently deposits over 30% of their income into gaming accounts over six months.
– Deposits more than 100% of their monthly income into a betting account during a six-month period.

It said that it denied around 29% of loan applications for these reasons. The company added that less sophisticated credit checks employed by lenders that did not frequently study open banking data would not have shown these consumers as hazardous borrowers.

Based on this company’s target market, lenders issue £600 million in credit each week. The company calculated that at least £174 million was being lent weekly to borrowers who would not have passed its own checks.

The government’s long-delayed measures to tighten affordability checks to establish if gamblers are overspending their means are still being debated. Such inspections would be based on losses, which may be offset by winning bets.

They should rather be based on the amount of money placed into an account through more rigorous AI and financial data vetting techniques. According to ministers, the new inspections won’t touch more than 3% of gamblers, but they could save vulnerable individuals from bankruptcy.

Losses of £1,000 each day for nine days, or £2,000 total, would result in increased contact from gaming companies. The gambling company could then request bank records or other documents from these clients to demonstrate that they can afford losses of that size.

Certain pro-gaming advocacy organisations and lobbyists have questioned the impact on civil rights. They contend that no one’s enjoyment should be interfered with for the sake of individuals with a gambling addiction.

Lenders are sometimes slow to recognise the warning indications that someone is using borrowing to pay for gaming, according to a prior study on the experiences of gambling addicts.

Lenders aren’t currently doing it improperly. However, the methods they are employing, like credit ratings, are outmoded and unable to recognise many online-era potential borrowers who are financially insecure.

One company claimed to lend money to 550 people every week while rejecting 230 more due to excessive casino expenditure. 15% of those who were rejected had previously been approved for loans elsewhere.

Lenders must continue to refine their methods for determining gambling damage by implementing rigorous audits and affordability evaluations. If the way that financial institutions perform their credibility checks is not changed, this problem will not go away.