The UKCG Goes on the Offensive – How will Operators React?

Posted by Harry Kane on Friday, October 18, 2019

In some respects, the UK Gambling Commission’s (UKGC’s) core strategic objectives through 2021 remain the worst-kept secrets in the iGaming space. However, as the end of 2019 approaches, there’s little wonder that the commission’s desire to achieve these goals is compelling them to adopt an increasingly aggressive stance when enforcing regulations.

This has been borne out by a number of recent events, from the roll-out of increasingly stringent guidelines for operators to several seven figure financial sanctions that have been imposed on various high-profile and market leading brands.

In this post, we’ll look back at how the UKGC’s more aggressive approach has begun to manifest itself, whilst asking how operators are likely to react as 2020 draws ever closer?

How Has the UKGC Gone up a Gear in Recent Times?

The recent developments have arguably come to a head of late, as part of the regulator’s period review of all issued licenses in the UK.

This review applies to both online operators and on-course bookmakers too, with seven bookies currently having their license reviewed after it was revealed that a 16-year old had been allowed to place a bet.

This incident caused officers from the Royal Borough of Windsor and Maidenhead to attend Royal Ascot and conduct an Age Verification test, as seven out of a total of 17 on-course operators allowed the youth in question to place a £5 bet.

It’s fair to surmise that online operators have endured a difficult time of late too, both before and during the periodical review of their license.

This is largely because the UKGC has identified various instances of operators not following anti-money laundering regulations and failing to protect vulnerable customers, whilst the commission has also opted to sanction these brands with hefty fines.

Noticeable sanctions have also been imposed for relatively small breaches by operators, such as the failure to display the correct compliance information on their website.

This has led to a number of both large and independent operators being sanctioned for very similar reasons during the summer of 2019, with the cumulative fines amounting to tens of millions of pounds within a relatively short period of time.

One of the most noticeable fines was reserved for the market leading Ladbrokes Coral Group, which was ordered to pay a whopping £5.9 million for historic failures to abide by stringent anti-money laundering regulations and protect vulnerable customers from gambling-related harm.

When justifying this fine, the UKGC listed a number of sanctionable incidents that had taken place between November 2014 and October 2017. This list included numerous failures to identify problem gamblers and prevent them from losing significant sums of money, even after requesting that protection measures were put in place.

In one incident, a single customer lost £1.5 million over the near three-year reporting period, as the operator failed to introduce safeguards or verify their income source and whether this could withstand such heavy losses.

Following the fine, Ladbrokes Coral parent company GVC Holdings has pledged to overhaul its compliance proceedings, whilst the regulator looks to fix its stake in the ground and set a tough precedent with regards to future compliance.

Using Financial Sanctions to Tackle Gambling-related Harm

The precedent set by the UKGC has also compelled independent operators to raise the bar, and this has caused several smaller casinos to face similar sanctions during the last few months.

Platinum Gaming Ltd and Casino 36 were both been hit with sizeable fines this summer, for example, with these operators also failing to perform sufficient or recurring checks on players who were displaying signs of problem gambling.

Platinum Gaming Ltd were also found to have allowed a convicted scam artist to spend more than £600,000 that was believed to be stolen, with this serious issue indicative of the challenges facing iGaming brands in the digital age.

As we’ve already said, the regulator’s noticeably tougher stance and willingness to impose heavy sanctions in relation to compliance breaches is beginning to have a seismic impact on the marketplace.

Additionally, the UKGC has also adopted a proactive approach to spending the cash received in fines, with at least some of this money being used to accelerate the commission’s National Strategy to Reduce Gambling Harms.

This initiative is considered to be pivotal to the future of responsible gambling in the UK, as it aims to unite regulators, health organisations, charities and financial services firms in a single drive to prevent problem gambling and (in some instances) mitigate its societal impact.

With this in mind, we can expect the number and size of sanctions to increase incrementally in the months ahead, as the UKGC adopts a zero-tolerance approach to non-compliance and persistent breaches.

This will even extend to land-based casinos and sportsbooks too, with the owner of the prestigious Park Lane Club in Mayfair recently fined £1.8 million following instances in which staff members also failed to recognise the signs of problem gambling.

The Last Word – How Are Regulators Responding?

Ultimately, the UKGC only has a limited window of opportunity in which to achieve its core strategic objectives through 2021, which include the protection of players and the prevention of widespread gambling-related harm in society.

This is one of the reasons why the regulator has gone on the offensive of late, as it strives to accelerate the process of creating widespread industry compliance and generating revenue that can be invested directly into the National Strategy to Reduce Gambling Harms.

The good news is that the approach seems to be working, as despite the recent slew of financial sanctions, affected operators such as GVC Holdings are now investing in revising their approach to responsible gambling and how they deal with problem gamblers.

With market leaders of this ilk finally setting a positive example for others to follow, the UKGC is creating a regulatory climate in which operators must either commit to becoming ambassadors for responsible gambling or face up to the threat of having their license revoked.

This will represent positive news for everyone within the iGaming space, including firms who commit to blazing a trail in the field of responsible gambling.