UK Gambling Commission warns operators about third party responsibilities

The UK Gambling Commission issued Tuesday a warning to gambling businesses over third party responsibilities after FSB Technology (UK) received sanctions for failings.

FSB’s business model includes contracting provisions of its licensed activities to third parties. This arrangement, often referred to as a ‘white label’, places responsibility on the licensee to ensure that its third-party partners keep gambling fair, safe and crime-free.

We’ve issued advice to consumers on how gambling companies should keep you safe while betting online: https://t.co/kOhUDFM36R pic.twitter.com/WVZNXW5WqH

— Gambling Commission (@GamRegGB) May 6, 2020

However, an investigation by the regulator discovered FSB did not have "sufficient oversight of three third-party websites or effective anti-money money laundering and social responsibility policies and procedures in place between January 2017 and August 2019." 

According to the UKGC, the company's failings included:

• Ineffective customer interactions with, and source of funds checks on, a customer who displayed indicators of problem gambling and spent £282,000 over an 18-month period
• Sending a marketing email to 2,324 customers who had previously self-excluded
• A VIP team manager acting without adequate oversight and not receiving sufficient AML training
• Placement of an inappropriate banner advertisement containing cartoon nudity on a Great Britain facing website that was providing unauthorized access to copyrighted content.

Richard Watson, Commission Executive Director, said: "All operators should pay close attention to this case as it shows that we hold all licensees fully responsible for third party relationships - and we will act against any of our licensees that do not manage third parties appropriately.

"These were blatant breaches of rules we have put in place to ensure gambling is fair, safe and crime-free."

In addition to paying £600,000 (USD 747,000) towards delivering the National Strategy to Reduce Gambling Harms, FSB will also have additional conditions on its license to ensure it conducts risk-based due diligence on new and current third-party partners it runs websites on behalf of.

The Commission is still reviewing the actions of personal management license holders involved in this case.