Gambling operators have faced a warning from the UK Gambling Commission (UKGC) that they will face regulatory action in case they do not make sure they manage carefully third-party websites they are responsible for.
The warning of the gambling watchdog comes after the UKGC took action against FSB Technology that will be forced to change the way it operates under some additional licence conditions. The company will also have to pay £600,000 for social responsibility, money laundering and advertising failures.
The business model of FSB Technology includes contracting provisions of the company’s licensed activities to third-party websites. The arrangement is often referred to as “white label” and puts the responsibility for ensuring the safety, transparency and fairness of the third-party partners to the holder of the original gambling licence. As revealed by the watchdog, the Commission’s officers are still reviewing the actions of the holders of the so-called personal management licences.
As a probe held by the UK Gambling Commission into the operations of FSB Technology, however, showed that the company’s oversight of three third-party websites was insufficient. The regulatory investigation also found that the operator did not have adequate social responsibility and anti-money laundering policies and procedures in place in the period from January 2017 to August 2019.
Lack of Adequate AML and Social Responsibility Policies Found between January 2018 and August 2019
FSB Technology is blamed for an ineffective source of funds checks and customer interactions with an individual who had indicated gambling addiction and spent a total of £282,000 over an 18-month period. The UK gambling watchdog also found that a VIP team manager had been operating without sufficient anti-money laundering training and adequate oversight.
Furthermore, the company was found to have sent advertising materials via email to more than 2,320 users who had already self-excluded. The investigation of the UKGC also found that the operator had placed an inappropriate banner advertisement featuring cartoon nudity on a UK-facing website, with the latter offering unauthorised access to copyrighted content.
The Executive Director of the UKGC, Richard Watson, said that all gambling operators are held responsible for third-party relationships and the Commission would act against any of its licence holders that do not adequately handle such third parties. He described FSB Technology’s transgressions as “blatant breaches” of rules that had been placed to make sure that the country’s gambling sector is safe, transparent, fair and crime-free.
The UKGC found that the company violated its Licence Condition 12.1.1 (2) and (3) related to the prevention of terrorist organisations financing and money laundering. Besides, FSB Technology was found to have failed to comply with the provision 3.4.1 of the social responsibility code, associated with customer interaction. The investigation of the gambling regulatory body also proved some due diligence and control failures associated with third-party arrangements of the company, which are exactly the so-called “white label” arrangements.
As mentioned above, FSB Technology would have to pay a monetary fine worth £600,000 for its failures, with the money being redirected as funding to the National Strategy to Reduce Gambling Harm. Apart from that, the gambling company would be imposed some additional conditions on its operating licence that would be set at making sure it conducts risk-based due diligence on both its existing and new third-party websites.
- Author
Olivia Cole
