Why Gambling Compliance Matters
Gambling compliance checks are an essential process that guarantees licensed operators are following their licensing conditions. This keeps online casinos and sportsbooks acting in a manner that is fair, safe, legal and ethical. In this guide, we’ve explained the finer details of gambling compliance and why it’s necessary.
Is Gambling Compliance Important to Me?
Before you can know why gambling compliance is important to you, it’s important to know what it entails. To get things started, we’ve provided a thorough overview of what compliance means and how it is assessed. We’ve then looked at the different codes of practice for gambling websites.
You will then learn about how disputes between customers and gambling sites are resolved, before looking at the penalties that are applied to operators who breach their licensing terms. You can use the following links to each of these topics below, or continue reading to get a deeper understanding of the whole topic.
What is Gambling Compliance?
In order to accept players in England, Wales and Scotland, operators must be licensed by the UK Gambling Commission. When applicants apply for a licence, they must provide ample evidence that their business is legitimate, sustainable and follow the strict guidelines and laws of the Gambling Act.
Gambling compliance refers to how UK operators adhere to the regulations set out in their licensing agreements. There are myriad requirements included in licensing agreements, such as the necessity to create safe gambling environments and prevent minors from joining and combatting money laundering and crime.
Both land-based and online casino operators will be subject to regular assessments of their gambling compliance. When an operator is found to be in breach of these regulations, they may receive guidance, warnings or strict penalties that may impact their ability to offer gambling products.
If you use unlicensed and untrustworthy websites, you will not benefit from knowing that the operators are submitting to gambling compliance checks. This puts you at great risk of dealing with a site that is unfair, unsafe, negligent and even criminal. Therefore you are advised to gamble only in the best safe online gambling sites in the UK. Gambling compliance is for the safety of customers and is not to be underestimated.
Gambling Compliance Checks
The UK requires that all online gambling operators have a physical presence in the region. This helps with gambling compliance checks, which are usually done on-site by a compliance officer. During a compliance check, operators must provide documents that prove they are following regulations.
These tests are very thorough, and require physical evidence that the site has continued to operate in accordance with the law. A full assessment will include a review of the licensed domains, a marketing and advertising review, interviews, a review of the operator policies and procedures and a review of customer accounts.
Depending on how the operator has complied, follow-up assessments may be required, an improvement notice could be issued or regulatory action could be filed. Below, we’ve outlined five of the key areas that compliance officers review to maintain gambling site integrity and lawfulness.
Money Laundering
Unfortunately, casinos and sportsbooks are an attractive method for criminal or terrorist enterprises to launder their cash. For example, these groups may transfer illicit funds through a mule account to break auditable trails of transactions. The risk of this has grown high with online gambling, as mules are often vulnerable persons.
Gambling operators must take strong action against money laundering through several measures. One way this can be done is by including threshold triggers that send alerts when unusually high deposits or suspicious activity have been recognised. Operators must alert the UKGC and the National Crime Agency of these instances.
Problem Gambling and Self-Exclusion
Operators must be committed to a reasonable degree of customer interaction. There are several tools available that can identify if a player is at risk of problem gambling harm. When this behaviour has been recognised, operators must interact with customers and help them to prevent the situation from worsening.
In more extreme cases, gambling websites can close player accounts if gambling harms are predicted. All of these interactions and identification procedures must be noted for compliance evaluation. Checks will review the effectiveness of these interactions, and how well other self-limitation and exclusion tools have been offered.
General Data Protection Regulation
In 2018, the UKGC introduced an updated general data protection regulation (GDPR) that mandated how licensees could use customers’ personal data. The primary purpose of this was to improve the rights of players when it comes to their data and requires organisations to understand and mitigate risks that come with data storage and processing.
For example, gambling websites must have a valid reason for processing data in a certain way, whether that be for an anti-money laundering test or social responsibility purposes. Data should never be used to manipulate players into gambling more or sold to other companies for marketing purposes.
Advertising Standards
There are very striction advertising regulations surrounding gambling set by the Advertising Standards Authority. Operators must advertise their products in a responsible manner or risk receiving heavy fines. For example, gambling advertising must not suggest:
- suggest gambling is a rite of passage
- suggest gambling is a means to a financial end
- suggest gambling is a reliable means of income
- suggest gambling is suitable for minors
- portray gambling as an exhibition of resilience
These rules are to protect vulnerable members of society from developing harmful habits. Operators must also take steps to ensure that self-excluded gamblers do not receive marketing or promotional materials. Once a player has self-excluded, gambling websites must immediately remove their names and details from marketing emails and ensure any third parties do the same.
Underage Gambling
It is illegal to gamble under the age of 18 years old in the UK and preventing minors from gambling should always be one of the primary concerns of a licensee. At gambling websites, the first barrier to underage gambling is the sign-up process. Operators must use ID verification technology to ensure all players are of age.
Gambling websites must also take steps to ensure that their products are not presented in a way that appeals to children, adolescents or is associated with youth culture. These steps must also be taken at land-based casinos and betting parlours through strict supervision of youth on-premises and ID checks.
Licensing Condition Codes of Practice
The best way for a licensee to uphold the rules and regulations of the UKGC is to follow the Licensing Condition Codes of Practice (LCCP). This document provides a detailed guide on how management and staff can follow lawful procedures. We’ve outlined some of the most important codes below.
Software
All gambling software provided by online casinos and sportsbooks must have a gambling software operating licence issued by the UKGC.
Segregation of Funds
All licensees that hold customer funds must hold the funds in a separate bank account. These must be readily available to customers for withdrawal.
Credit Cards
No credit cards should be accepted. This includes credit cards linked to a third-party services such as PayPal, Neteller or Skrill. Take a look at these instant withdrawal casino sites to see which payment methods can be used instead.
Access to Premises
Gambling website headquarters must always grant access to premises to UKGC compliance officers. Officers will always present identification upon arrival.
Display of Licence
Licensed operators must always display their licence to customers. At online gambling sites, this is usually placed at the bottom of the homepage footer, with a live link provided to its UKGC licence page.
Rules to Play
Licensees must clearly list their rules to play and customer terms and conditions. This must include a list of individual game’s house edges and clear guides on how to play games.
Marketing Consent
Players must first consent to receive any advertising or marketing materials via email, mail or telephone. If consent has been granted, the ability to withdraw consent must be offered.
Licence Breach Penalties
If the findings of a gambling compliance check find glaring infringements, the UKGC may be inclined to consider regulatory action. This could be due to breaches of the LCCP where there is evidence of player harm or risk of player harm. Regulatory action will include an investigation.
The penalties that can be incurred if the investigation finds gross breaches include the suspension of an operating licence, large fines or even revocation of licences. In the past, major gambling operators have earned fines exceeding £10 million for failing to recognise money laundering or problem gambling behaviours.
Dispute Resolution
If a player has an issue with how a gambling site has operated, they are entitled to seek dispute resolution through an Alternative Dispute Resolution (ADR) provider. These are independent authorities that can investigate player claims and act as an intermediary between players and licensees.
The ADR will act in accordance with UKGC regulations and report all its findings to the gambling commission. There are a number of reasons customers may seek a resolution, whether it be a failure to receive an owed payout, perceived injustices on part of the accused or a perceived breach of contract.
Frequently Asked Questions
If you still have questions about gambling compliance, keep reading. Below, we have provided responses to some commonly asked questions about this topic so that you don’t have to read the whole article. If you’re looking for more detailed answers, use the links in each to jump up to the relevant sections.
1️⃣ What does gambling compliance mean?
Gambling compliance refers to an operators ability to comply with gambling regulations. This is an important process that guarantees that licensees make a continued effort to provide a safe, fair, responsible and ethical gambling environment to patrons. There a strict regulations set out by the UK Gambling Commission that will result in serious penalties if they are breached.
2️⃣ What does a compliance check entail?
A compliance check is undertaken by a compliance officer, and tests the commitment of an operator to following guidelines set out in the LCCP. Operators must provide sufficient evidence that they are combatting money laundering crimes, minimising problem gambling harms, following advertising standards and preventing minors from joining among other things.
3️⃣ What are the codes of practice?
The Licensing Conditions Code of Practice is a comprehensive set of guidelines that operators must follow once they have been granted a gambling license. The Codes are highly specific and non-negotiable, with different documents provided for each type of gaming license.
4️⃣ What happens when the code of practice is breached?
There are a range of penalties that can be distributed if a licensee breaches the terms of the LCCP. These can include a warning, a suspension or revocation of license or large fines. There have been several high-profile cases of major operators receiving fines of more than £10 million for breaching the Code of Practice.
5️⃣ How can I resolve a dispute with an operator?
If you wish to resolve a dispute with a gambling operator, you can use the services of an Alternative Dispute Resolution (ADR) provider. The authorized agencies act as intermediaries between disputing parties and work under the guidance of the UKGC. You can seek damages for a range of issues, whether that be a failure to receive owed funds or receiving a site ban.