The UKGC Enforcement Report and Its Key Findings

Posted by Harry Kane on Thursday, August 9, 2018

The UK Gambling Commission (UKGC) has faced a challenging 2018 to date, with the online gambling industry having being blighted by various regulatory failures and high profile cases of money laundering.

These challenges, which have seen the UKGC adopt an increasingly hard-line approach and dish out some hefty financial sanctions, have also prompted the Commission to redefine its core strategic objectives through 2021.

More specifically, the regulator has to prioritise the safeguarding of vulnerable players within the sector, while also raising industry standards and improving its wider perception.

With these points in mind, the UKGC’s recent enforcement report made for extremely interesting reading when it was released recently. Below are some key insights and the subsequent takeaways for operators.

1. The Eradication of Illegal and Unlicensed Operators

Given the regulators desire to significantly raise industry standards and alter the way in which it’s perceived by non-patrons, it’s no surprise that the UKGC has spent the last 12 months shutting down a wealth of illegal and unlicensed operators.

According to statistics, the UKGC closed a total of 40 unlicensed operators back in 2015, with this number increasing to 57 just 12 months later.

In 2017, the regulator shutdown 61 unlicensed casinos, as it continues to intensify its efforts to safeguard the interests of players across the board.

On a fundamental level, this is contributing to a safer marketplace, and one in which players are only able to access fully licensed and reputable operators. It’s also sending a clear message to licensed operators, however, particularly in relation to the importance of compliance and the consequences of failing to protect the needs of customers.

This was borne out last year, when a total of five online casino operators faced the prospect of losing their licence due to their inadequate money laundering measure.

At this time, the Commission wrote to 17 virtual casinos based throughout the UK, highlighting the serious flaws discovering when investing their existing controls against money laundering, problem gambling and terrorist financing.

While the licensing review failed to result in any established operators losing their right to trade, we have seen brands hit with a number of hefty fines during the last 12 months.

Firstly, 888.com was hit with a record, £7.8 million fine by the Commission last August, after the brand failed to adequately safeguard vulnerable customers. More specifically, a technical failure in the company’s systems led meant that more than 7,000 customers who had chosen to self-exclude from the platform retained access to their accounts and promotional marketing material.

Just six months later, the regulator then fined online betting group William Hill £6.2 million, primarily for failing to protect gamblers who were showing signs of problem behaviour. The brand was also found to have failed in its attempts to prevent money laundering through the website, with the investigation being undertaken over the course of two years.

With the UKGC maintaining this tough stance, we’re sure to see more operators hit with financial sanctions as 2018 progresses. This should serve as a warning sign to brands, who must understand the regulator’s desire to achieve its core strategic goals.

2. Making Leading Brands Responsible for Their Customers

These instances represent clear examples of the regulator policing individual operators, which many will argue is the sole reason for its existence.

From a strategic perspective, however, there’s an obvious need for the UKGC to place greater responsibility on the shoulders of operators, so that they begin to play a leading role in the safeguarding of online gamblers and the industry as a whole.

This was also touched on as part of the enforcement report, while UKGC boss Neil McArthur has also gone on record as saying that companies could do “a lot more to demonstrate that they care about customers” and adopt a far more proactive approach when protecting their interests online.

The statement was delivered as a call to action, with the Commission apparently targeting the industry’s leading operators and most established brands. The ultimate goal is to create a culture where compliance and consumer welfare are paramount, with the highest profile brands setting an industry standard for others to follow.

These operators would then effectively emerge as ambassadors for responsible gambling in the modern age, affording greater security to players in the process. This would also help to alter the perception of the industry for the better, while creating a sense of accountability that enables the UKGC to focus on its wider strategic approach.

This is a crucial message for operators to heed, as brands who are not proactive and fail to take control of their customer journeys ultimately risk being sanctioned. Not only this, but they’ll also miss out on an opportunity to become a complaint and progressive operator, and one that could achieve a larger market share as a result.

3. Introducing More Measures to Protect Children

When we talk about problem gamers, thoughts are instantly drawn to prolific players and those who are struggling with burgeoning addictions.

This could also include children in the digital age, however, with an annual study by Youth Gambling suggesting that an estimated 25,000 kids aged between 11 and 16 may now be classed as problem gamblers.

This has quickly become a leading priority for the regulator, particularly as part of its goal to ensure that vulnerable players are well looked after at all times.

In the enforcement report, the UKGC laid out four areas that required urgent attention, starting with the access and exposure to gambling that children have in the digital age. The accessibility of social and online games was also a major concern, particularly through largely unregulated channels like Facebook.

The need for preventative education and treatment was also referenced by the regulator, while the reports also highlighted that further evidence collection was crucial if a viable strategy was to be deployed.

The response is likely to be robust, with targeted compliance enforcement applied against operators in instances where the proper age verification of players is not carried out. It remains to be seen how regulators can work with social channels to enforce similar rules, however, with individuals able to register for a Facebook account and access gambling-inspired games from the age of 13 upwards.

From an operators perspective, however, there’s no doubt that any future breaches will be met with an heavy-handed approach. Age verification and the safeguarding of children should therefore be a key priority for operators in 2018 and beyond, otherwise they may well risk losing their license in the future.