Volume: 17 Issue: 1
The British Gambling Commission (‘the Commission’) has written to all GB-licensed online casino operators to notify them of its concerns in relation to their practices in the areas of anti-money laundering/terrorist financing and social responsibility, the Commission announced on 4 January 2018. The Commission stated that at the time of writing the letter, it had begun investigations into 17 remote gambling operators and that it is considering a licence review in relation to five operators. At the present time, the identities of the operators being investigated have not been disclosed.
“My strong suspicion is that the number of operators under investigation will rise above the initial 17,” said David Clifton, Director at Clifton Davies Consultancy Ltd. “I am not the slightest bit surprised that this has happened now. Indeed, if I am surprised at all, it is that it has not happened before now. Whilst responsible operators have been working hard to improve their anti-money laundering and social responsibility controls over the last three or four years, too many others - including operators who came through the transition licensing process in 2014 - have taken an unrealistically optimistic view that the Gambling Commission may not direct its regulatory focus against smaller operators.”
The letter follows the findings of a compliance assessment activity carried out by the Commission, which focused on measures taken by remote operators around the prevention of money laundering and terrorist financing, and which left the Commission with serious concerns. For example, the Commission found that in regards to customer due diligence/enhanced due diligence, there was a lack of evidence of ongoing monitoring of customer accounts. The Commission further identified the need for action around social responsibility (‘SR’) code breaches and in its letter, the Commission explains that having reviewed a large number of customer accounts as part of its assessment activity, it noted that in many cases potential signs of problem gambling did not lead to the operator interacting with the customer.
The letter does not introduce new requirements for operators, instead setting out that the Commission expects operators to review their processes in the areas of social responsibility and anti-money laundering. “The Commission’s letter sets out five specific actions which they expect licensees to take now, by way of reviewing their anti-money laundering and social responsibility policies,” said Andrew Danson, Partner at Bird & Bird. “Operators should not just do that, but also document that they are doing it. They should also ensure that their policies and procedures are actually followed by the relevant staff, not least in relation to customer interaction.”
The Commission’s interest in the online casino sector was highlighted at the Commission’s own Raising Standards conference held in November last year, in which it warned the industry that it was looking in particular at online casinos. “There is no doubt that the Commission has stepped up regulatory compliance activity on many fronts and 2018 started with a bang,” said Richard Williams, Partner at Joelson. “I think we are going to see a lot more regulatory activity by the Commission this year and Sarah Harrison will want to leave the Commission at the end of February with a track record of heading up a ‘getting tough’ regulator. Given the press onslaught against the gambling industry, the Commission had to take note and take action - which it has done.”