On 9 December 2021, the UK Gambling Commission published its annual Compliance and Enforcement Report ("Report"). The Report details the regulator’s findings and enforcement action taken during the period 2020-2021. Such action included:
- the suspension of five operator licences;
- the revocation of licences for one operator and nine personal management licence holders; and
- a total of £32.1 million being paid by 15 gambling businesses as a result of fines or regulatory settlements.
Gambling Commission Chief Executive Andrew Rhodes highlighted that in almost every case of enforcement action, compliance with social responsibility and anti-money laundering rules were at their heart. A copy of the full Report is available here.
The Report highlights common poor practices, in particular concerning anti-money laundering and counter terrorist financing, such as an over reliance on third party providers to conduct due diligence, and delayed customer ID checks. The Report specifically highlights Licence Condition 12.1.1 (of the Licence Conditions and Codes of Practice), which requires operators to develop and implement a money-laundering/terrorist financing risk assessment which should then be used to develop and implement policies, procedures and controls to prevent financial crime.
A number of illegal operators and lotteries were the subject of enforcement action. 823 instances of illegal lotteries being advertised or operated on social media were identified, the vast majority of which were via Facebook (Meta).
Rhodes highlights that, in the Commission's view, "operators are either not making suitable resources available or are simply putting commercial objectives ahead of regulatory ones". He states that the Commission's enforcement and compliance work will continue to focus on customer protection: scrutinising novel products, checking that operators are looking after their customers by meeting the LCCP requirements, and taking into account the current Commission guidance on anti-money laundering and customer interaction.
It is clear that, possibly heightened by recent political and wider scrutiny of the Commission's activities and proposed Gambling Act reform, that Rhodes and the Commission are keen to send a clear message to operators that the Commission will not hesitate to take appropriate enforcement action, where necessary. Operators ought to heed that warning and ensure that, in particular, AML and due diligence practices are kept under regular review, and in line with any LCCP updates.