GC’s Targeted Inspections: Fail to Prepare, Prepare to Fail
During the insightful IAGA webcast ‘Setting the UK Gambling Agenda for 2025: a less political year?’ on 15 January 2025, Mr Rhodes indicated that the Gambling Commission (GC), are likely to include smaller, targeted inspections based on factors such as customer complaints, industry trends, findings at other operator’s assessments. He also mentioned that preparation for the 2027 FATF mutual evaluation of the UK commences in 2025 which may throw up some AML issues the regulator will want to assess.
As reminded by Rhodes, on a basic level, the GC assess operators to test their level of compliance against the three licensing objectives – so here’s some thoughts on what the GC could be looking at, in more detail for each one:
Preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime.
This one is easy – the unregulated market. Mr Rhodes made it clear during the webcast, and again at the ICE 2025 World Regulatory Briefing that he ‘firmly encourages’ operators to undertake due diligence on any B2C or B2B company they work with. Although he concedes it’s not the operators’ job to take down ‘black market’ operators – it's pretty clear that you’re expected to disrupt where you can. Expect to be asked to provide records of due diligence for your partners such as games providers, payment providers and affiliates to prove you are not aware of them working in illegal markets.
Ensuring that gambling is conducted in a fair and open way.
This is not new – the GC have focused on this area for a while now. Previous focus has included areas such as temporarily withholding funds for customer due diligence reasons when such processes could have been completed earlier. So, what will be new for 2025? At ICE, Rhodes conveyed the GC are considering what action they need to take against operators who falsely claim to consumers that the checks they are performing are due to ‘regulatory reasons’ or simply because the GC has specifically mandated them. He suggested they’ve seen many examples of misleading customer communications in this regard. With this in mind, check that you don’t have any misrepresentative statements hidden in your website, buried within due diligence email requests or lurking within emails which may be coming from other departments such as Trading, Customer Service or Fraud and Risk. Assessments are likely to include an in depth look at operator T&C’s and consumer communications. This begs the question: When and how are you communicating to consumers that they must provide documentation and the reasoning behind it?
Protecting children and other vulnerable persons from being harmed or exploited by gambling. This is likely to be partially satisfied by the GC assessing the action operators are taking on the results of the financial vulnerability checks that drop to the £150 threshold at the end of next month. However, through the new assessment approach, which includes pre-meetings to discuss safer gambling algorithm mechanics, it is also clear that the management of marker of harm triggers is also coming even more firmly into focus. Recommendations for consideration include; are you taking proportionate action and recording financial vulnerability decisions appropriately? Are your policies and procedures up to date and fit for use? Do you have a robust understanding of how your algorithms work and can demonstrate that they are effective? A final point to note in this section is the requirement for operators to now provide much more detail around individual customers ahead of regulatory reviews. It is possible that the Commission may streamline their focus on individuals who have self-excluded or who have a history of heavy use of safer gambling tools.
Further key advice
Not necessarily tied to a specific licensing objective, but arguably just as important, my last pieces of advice are:
Invest in strong quality assurance processes and robust internal controls; it’s less painful to find problems and fix them yourself then to go through an improvement plan with the regulator.
Keep up to date with GC communications – if there are best practices or lessons to learn, do it.
If you are short on resources or time, get in a respected partner to assist with decades of gambling compliance experience - I know a great company if you want their number…….
Written by Nigel Harvey