Banks, payments blocks and widening the safety net
In 2004, a study found that just one operator from 30 surveyed offered customers the option to self-exclude. A 2017 investigation of 50 operators found this number had jumped to 86%. By 31 March 2020, the online self-exclusion system GamStop is mandatory for all British licensees. Other markets, such as Spain, are looking to combine regional self-exclusion systems into a single national entity.
These blocks only cover access to gambling sites, and are therefore only part of the safety net. And since 2018, gambling blocks have moved beyond operator and industry platforms. Solutions such as GamBan go a step further, blocking access to gambling sites entirely. And banks, led by digital challenger bank Monzo, have pioneered solutions whereby banks block gambling merchant codes.
“We believe allowing customers to manage their self-exclusion directly from their bank account will also give them more independence and ownership over their recovery,” it explained at the time. “And if our goal is to give people choice and control over their money, that includes giving you the option to choose how not to spend it.”
Monzo cited figures from GambleAware that suggested 80% of those seeking help for gambling harm were in debt. Based on the 2018 estimate of 0.8% of Britain’s adult population identifying as having a problem with gambling, it estimated that 5,000 customers were affected.
Ultimately it was another challenger, Starling Bank, that launched the feature first, on 13 June, 2018. Monzo’s followed on 19 June.
In each case, the feature worked in a broadly similar way. Customers could turn it on via app or by speaking to a customer service representative. Monzo’s feature then required customers to sit through a 48 hour cooling-off period before it was lifted, while Starling would message the individual with advice on safer gambling, including the National Gambling Helpline’s number.
This attracted praise from Westminster, with Mike Penning, MP for Hemel Hempstead, calling on other banks to do the same.
Rapid adoption
The UK’s other high street banks heeded the call. By 2021, 11 popular banks allow customers to block gambling transactions. Barclays was the first high street bank to launch this feature, in December 2018, and the likes of NatWest, HSBC, Lloyds and MBNA have since followed suit.
While exact numbers are not available for all banks, Monzo said in July 2020 that 222,993 customers had turned on the gambling block since launch – suggesting an average of 2,314 per month.
Others in parliament were not immediately appreciative of these measures. Carolyn Harris, MP for Swansea East and chair of the Gambling Related Harm All Party Parliamentary Group, said in a February 2020 interview: “[It’s] not the banks that are encouraging people to gamble. It should be saying to gambling companies that it’s the industry’s responsibility to stop banks from needing those controls.”
A month later, ‘A blueprint for bank card gambling blockers’, a study by the University of Bristol’s Personal Finance Research Centre, estimated that around 60% of UK current accounts had access to the feature. This equates to around 49m current accounts, it noted.
Multiple banks were asked to comment on the success of the feature, and how it may be developed going forward, but none were willing to do so.
The Personal Finance Research Centre did give some insight into their effectiveness. One unnamed bank, researchers pointed out, had provided data showing approximately 390,000 to 585,000 transactions were being blocked per month. This equated to 2-3 gambling transactions being stopped for customers that had activated the blocker.
The Centre’s own study of more than 100 people with lived experience of gambling revealed that 30% of respondents had turned on a block. Over half had spent less or no money on gambling since doing so.
It also flagged gaps in the safety net. While 60% of current accounts were able to block gambling transactions, that left 40% unable to do so. This, it said, meant an estimated 28m current accounts could not block gambling transactions.
Some banks only offered the functionality on certain accounts. Furthermore, 43% of individuals surveyed as part of the project were not aware that gambling blocks existed. “This is notable given many were currently receiving treatment and support for their gambling,” the report said.
It also queried the level of friction created by the blocks. Some could be toggled on and off instantly, though others would take between 24 and 72 hours to turn off. However, the overwhelming conclusion was that gambling payment blocks work – and should be made standard across all UK bank accounts, as part of the “self-exclusion triangle”.
The self-exclusion triangle
This acknowledges that blocking transactions is only one element of preventing access to gambling. It must be supported by software that blocks gambling websites on smartphones and computers, such as GamBan – a feature now offered by a number of banks – and self-exclusion schemes such as GamStop and MOSES.
The work to ascertain how the three sides of the triangle shield players from harm remains a work in progress. There remain lessons to be learned on how these features work alone and in tandem, says Playtech’s director of public affairs and sustainability Lauren Iannarone.
“This will require ongoing dialogue and engagement across the banking, debt advice and gambling sectors to learn about what is working, how to integrate (where appropriate) as well as to identify opportunities to further develop the next generation of tools and approaches for reducing gambling related harm,” she says.
What is clear, she adds, is that the different layers of protection complement one another. “All offer some degree of protection on their own, but they can be much more effective if they are used in conjunction with each other – as we see with the TalkBanStop campaign,” Iannarone explains.
TalkBanStop, which brings together all three sides of the self-exclusion triangle in GamBan’s site blocking software, GamStop’s self-exclusion solution and GamCare’s counselling and treatment services, launched in March this year.
By October, an Ipsos Mori poll suggested those that had used all three elements reported a lower appetite to gamble and also a reduction in gambling-related harms.
“Working together, they can be really powerful in minimising risks for players. The challenge is to ensure they are applied efficiently at different stages of the player journey,” Iannarone says. “All players can benefit from awareness and use of basic protections on their accounts so they can gamble safely.
“It is the role of the industry to ensure they are identifying players that might be at risk and intervene effectively. This is where use of data and insights can help ensure that those interventions are timely, relevant and personalised.
However, Filippos Antonopoulos, chief executive of payment solutions provider Okto, argues that there is a lack of fundamental alignment on these services. “So these various measures [such as self-exclusion, gambling blocks and safer gambling tools] do not come from institutions that have aligned interests and common marketplaces,” he says. “Someone, or some company, some corporate entity needs to come in and combine them.
“What you’re lacking here is an integrated offering.”
The role of regulation
But while GamStop and MOSES are mandatory for all British licensees, site- and payment-blocking are not yet compulsory for banks and operators. Here again, Monzo is leading the charge for uniform rules across the industry.
In an open letter announcing a campaign for three recommendations for the government’s ongoing Gambling Act review in February 2021, Monzo CEO TS Anil asked for account providers to be required to offer a card-based gambling block.
“These blocks are opt-in features that customers control, are simple to build, proven to work, and will help protect hundreds of thousands of people,” Anil wrote.
“The financial services industry has seen the impact of this intervention, with the first friction-driven, card-based gambling block launched back in 2018,” he continued. “But despite support from prominent gambling harm-reduction practitioners, researchers and charities, just over half of UK current accounts support this feature.”
Anil’s proposal went even further. In order for the blocks to be ‘future proofed’ to reflect the evolution of payment options offered by gambling operators – such as e-wallets and account-to-account payments – he called for bank account details to be held in a central registry. This would open up the data to financial service firms, he said.
Whether this would be accepted by the industry seems unlikely. Some politicians, such as Betting and Gaming All Party Parliamentary Group chair Scott Benton MP, are critical of the concept.
“My own view is that this is completely intrusive for customers and an unwelcome and unnecessary step,” Benton said. “The focus on tackling problem gambling should be for companies to focus their efforts on the very small percentage of vulnerable people who are displaying signs of a problem rather than to bring in intrusive measures such as these which capture all customers.”
Integration issues
And Antonopoulos points out that solutions such as e-wallets are subject to hybrid regulation from the banking and gambling sectors. “We take our compliance rulebook and regulatory rulebook from the payment side. That ultimately co-regulates us,” he says. “Therefore, what’s naturally built into our wallet includes all KYC and AML checks and controls, including strong transaction monitoring tools.
“However, and additionally, we take our business specs from the gaming industry, because we target users who are also players. So not only have we already built them because the regulators say so, but we are also improving on them as a consumer-facing proposition.”
“No technology sits on an island,” he adds. “it is always in use, so the continuous improvements come from operating all these tools. So our digital operations, AML, compliance teams collaborate with our community management and CRM teams to make sure the usage of these tools remains a good experience for the user and a safe and regulated process in the eyes of the authorities.
However, it is hard to deny that banks’ gambling blocks are a starting point, rather than a successful conclusion. This was highlighted by the Gambling Related Financial Harm (GRFH) workshop, organised by gambling harm charity GamCare in March this year.
Bringing together representatives from financial services, debt advisors, gambling businesses and support services, as well as experts by experience, it aimed to identify gaps and loopholes, and suggest ways these could be closed.
Iannarone believes the GamCare team has “done a tremendous job” of unifying a diverse group of stakeholders to work towards a common goal of reducing gambling financial related harm. “People who are affected by gambling-related harm may seek help from non-problem gambling support services,” she points out. “That is why we believe that it is important to bring in organisations who may have a role to play and are working in areas such as financial difficulty or mental health.
“A cross-sector collaborative approach can ensure that more people are identified and supported as early and as effectively as possible.”
This also provides an opportunity to address gaps in the safety net. For example, electronic money institutions (EMIs, such as e-wallet providers and prepaid cards) faster payments and cryptocurrencies meant that card-based payments were only one of an array of payment options for consumers.
Online payments, where no merchant clearing code is generated, can slip through the safety net. This means that open banking – where banks share data via APIs – can be used to circumvent blocks. Monzo is trialing an open banking block, in partnership with TrueLayer, but this only covers the transactions initiated by the supplier.
Furthermore, instant bank transfers do not use MCCs, so can also circumvent blocks, while EMIs are yet to roll out their own gambling blocks. These are only in place to prevent credit card transactions, in the wake of the Gambling Commission banning the use of credit to fund gambling from April 2020. The controls offered by operators, it is worth noting, are also only in place for licensees, meaning customers gambling offshore could also be at risk from harm. Credit cards could therefore still be used to fund offshore accounts.
As a result a host of recommendations were made, from ramping up awareness of additional payment solutions, to greater transparency by banks, gambling operators – echoing Monzo’s call for a central registry containing bank account details associated with gambling operators.
“Whilst different payment methods offered by gambling operators give a lot of flexibility for consumers, it can also leave them vulnerable to gambling harm when these payment methods are not subject to gambling blocks,” GamCare financial harm manager Raminta Diliso explained.
“We’re pleased that so many organisations have shown interest in this issue and we would like to see a collaborative cross-sector response to drive through a number of additional changes to further protect people from gambling related harm.”
However Paul Foster, CEO of Crucial Compliance, argues that technology could play a crucial role alongside the coordination of the services. This, he adds, would require significant investment from the gambling sector.
“I think, in the UK especially, a lot of people hang their head on the single customer view,” he explains. “If you have a single customer view, the need to link a lot of these things goes away. If you want to link all the areas of consumer protection – talking about banking, access to payments, access to sites, and everything else in the gambling ecosystem – then what you would need is a platform aggregator.
“A single platform that would aggregate all of these different users in the ecosystem, and that is only going to come when there is a financial advantage to developing such a solution.” In Britain, he adds, there is not – “everyone is hoping someone else comes up with a single view of customers”.
Aggregation of games didn’t come about until operators realised they didn’t have the capacity to integrate 30 different game suppliers, he adds. Ultimately, he says, there has to be an aggregator capable of taking all the elements from payments, KYC, source of funds, responsibility, responsible gaming, banking, and linking people into GamBan, GamStop and self-exclusion systems all around the world.
“That thing is going to be very useful for the industry but we are probably 5-10 years away from someone accidentally building it, because I can’t see someone putting the money up for it. It’s going to cost upwards of £20m to build that system.”
That platform, it should be noted, would only work if there were uniformly applied self-exclusion systems to be aggregated on the platform. And if these solutions are not uniformly applied, it’s hard to argue that the role of banks in tackling gambling-related harm remains in its infancy.
Further efforts to strengthen the safeguards, such as through Monzo’s open banking blocking pilot, are underway, but much of the GamCare workshop’s recommendations are reliant on regulatory or legislative action.
Just as self-exclusion was rolled out operator-by-operator before a formalised framework was mandated through GamStop, it’s political action that will take the process to its next stage.