According to the regulator’s 2019-20 compliance and enforcement report, operators in the gambling industry need to reassess their affordability checks to identify vulnerable customers early. Despite this recommendation, the report revealed that operators continue to allow individuals to gamble without sufficient affordability checks, even when signs of harm are evident. Examples were given, such as one operator permitting a customer to deposit and lose £187,000 in just two days, despite having no regular source of income. Another case involved a customer who lost £18,000 in one year, despite telling staff that she had exhausted her savings and was playing with borrowed money.
The report emphasized that operators should keep in mind the average annual earnings of UK employees, which is around £30,500 before tax. It also noted that managers, directors, and senior officials, the highest-earning employment category, earn less than £45,000 per year. These figures should be considered when assessing affordability for customers.
The regulator highlighted the need for operators to have policies, procedures, and systems in place to identify customers who may be experiencing or at risk of developing gambling-related problems. The impact of the COVID-19 lockdown was also mentioned, with decreased disposable income and declining mental health potentially increasing levels of play.
In terms of anti-money laundering checks, the report criticized the lack of risk assessments by operators and a failure to learn from past enforcement actions. Operators were urged to evaluate the adequacy of their anti-money laundering practices and ensure that commercial considerations do not override regulatory responsibilities and compliance with licensing conditions.
White label agreements were also a concern, as unlicensed operators could potentially use this model to provide gambling services in Great Britain without passing the Commission’s initial licensing suitability checks. Licensees were reminded to conduct appropriate due diligence checks on their white label partners to maintain their license.
Betting exchanges received increased regulatory attention during the year, with Matchbook operator Triplebet’s license suspension serving as a warning. Exchanges were advised to apply critical risk-based thinking when expanding their betting markets or jurisdictions to avoid regulatory consequences.
The report concluded by highlighting the Gambling Commission’s regulatory activity, including license suspensions, revocations, penalty packages, security audits, website reviews, and compliance assessments. The Commission’s National Strategic Assessment document was also mentioned as the foundation for future action in prioritizing gambling-related risks.
The National Strategic Assessment document identified major risks in four categories: the person gambling, the place of gambling, the products used, and the providers of gambling services. Risks stemming from customers’ gambling habits, multiple operator spending, and underage gambling were considered significant. Operators were urged to better understand their customers’ affordability, circumstances, reactions to products, play patterns, and behaviors.
Risks associated with the places of gambling included accessibility to online gambling, extensive advertising, and anonymity in retail locations. Operators were reminded to assess risks at each stage of the online gambling process, from customer decision-making to signing up and throughout gameplay.
The report recognized that game design, gambling machines, higher-risk products, and product innovation posed risks in terms of product offerings. Online slots were identified as generating the most revenue, making safe design crucial. The Commission emphasized that addressing product-related risks should involve a package of complementary initiatives impacting various stages of customer interaction with the products. The results of a consultation on safer game design, proposing measures such as banning auto-play and celebrating losses disguised as wins, would be published soon.
As for the providers of gambling services, the report highlighted risks associated with a lack of transparency in ownership, illegal operators, and combating suspicious activity. The Commission stressed that entities or individuals seeking to operate in the British gambling market must demonstrate transparency and cooperation with regulatory authorities.
