UK Gaming Sector Market Report

The new Chief Executive of the UK Gambling Commission, Andrew Rhodes, is already leaving quite an impression in the early days of his tenure. His no-nonsense style has headlined the release of the UK Gambling Compliance and Enforcement report from 2020 to 2021.

This comprehensive report mainly features the UK Gambling Commission’s casework findings against license holders. And of course, it also showcases where the gambling industry in the UK needs to up its game. The report resulted from extensive research that included 25 full assessments of online operators, 5 land-based operators, 83 website reviews, and 262 security audits.

A quick rundown of the report revealed the following;

• £32.1 million was paid by 15 gambling businesses to the UK gambling commission. The money collected included fines paid by the said gambling businesses or regulatory settlements. The £30 million-plus figure is an undisputable show of effective work as this amount is the most raised for this purpose by the UK gambling commission to date.
• During the period covered by the report, there was the revocation of licenses for one operator and nine personal management license holders
• Andrew Rhodes, the new Chief Executive, pointed out two key areas where the industry needs to up its game. These were social responsibility and anti-money laundering rules.

UKGC’s Compliance report also pointed out that regulators need to prioritize their regulatory roles ahead of their commercial obligations. Per the report, it is incumbent upon the betting regulators within the UK to not only look at the money they’re making but also control what happens when people are gambling. Additionally, the UK gaming watchdog discussed a fundamental weakness: most regulators do not allocate enough resources into their regulatory role, thus posing a risk of not doing a good job regulating. Let’s get to the specifics, shall we?

Anti-Money Laundering and Counter-Terrorism Financing Issues

Over the years, there has been a lot of concern that gambling has been used to facilitate money laundering and terrorism funding. Similarly, there have been instances where gambling has been used to enable crime or as an investment avenue for criminal proceeds. In that case, some of the issues the report highlighted include:

• Inadequate due diligence – UKGC’s research established a lack of responsibility for some of the regulatory officers and the businesses offering gambling services. Both parties are not doing enough to establish that licensed platforms were not being misused for money laundering or terrorism purposes. In addition, there have been inadequate steps taken to act as preventive measures towards these vices impacting the gambling scene in the UK.
• Failure to take account of money laundering and terrorist financing risks within the British gambling industry – A big part of the gambling scene in the UK is focused on the commercial aspect of gambling. Thus, anti-money laundering (AML) and counter-financial terrorism (CFT) measures have dangerously taken a back seat.
• Failure for guidance for remote and land-based casino operators on anti-money laundering – There is a lack of adequate guidance for UK operators and education on how to handle issues related to AML and CFT.
• Not taking account of risks identified in the Commissions’ risk assessment of the money laundering and terrorist financing in Great Britain’s gambling industry
• Over-reliance on third-party providers to conduct due diligence checks.
• Operators were delaying customer identification checks – Lack of swift customer identification threats on people using an operator’s platform for gambling. As a result, there could be potentially dangerous individuals using gambling platforms to launder money or conduct terrorist activities.

The commission recommended stern action be taken to ensure that money laundering and terrorism have no place in gambling. Some of the measures proposed include:

1. The commission advised on the need to carry out in-depth and widespread due diligence
2. Thorough risk assessment to mitigate against the threat posed by money laundering and terrorism financing issues that have in the past been associated with gambling in the UK.
3. Deliver all-rounded and up to date employee training sufficient to prevent the penetration of money laundering and terrorist activities into gambling
4. Operators and regulatory officers have also been encouraged to apply a risk-based approach to flushing out AML and CFT issues.

Illegal Gambling

Illegal gambling is on the rise in the UK. It is rapidly rising, especially due to the stringent measures the UK gambling commission has continuously implemented. Not to be stopped in its mission to sanitize the gambling scene, the UK gambling commission in its report highlighted some of the issues it continues to face regarding illegal gambling.

To combat black-market gambling, the gaming ombudsman disclosed some of its actions within the last year in that regard. For instance, the report identified a total of 99 unregistered and unlicensed remote operators within the UK between the years 2020 and 2021. Additionally, some of the actions taken and the number of operators affected are as follows:

• UK registration removed: 14
• GEO IP Blocked: 13
• Removed by host: 10
• Removed by owner: 7
• Website suspended: 3

The Gambling Commission has also been working quite closely with the police force to curb illegal gaming in the UK. They’ve not stopped there, though; they’ve also consulted widely with 15 international regulators to get tips on adequately handling the situation. As a user, it is also upon you to check that the gambling site you are gambling in is registered. Here are a few tips should you need help there;

1. Check whether the website you’re in holds a UK gambling commission license. Most legit online betting sites usually display this on their site. Alarm bells should therefore start ringing should a gambling website miss this essential feature.
2. Most registered gambling sites will display their physical addresses and phone contacts on their website.
3. You may head on over to the UK gambling commission website for a comprehensive list of registered gambling businesses should you have any doubts about the legibility of the platform you are using.
4. Most of us don’t bother looking at the terms and conditions of use for these gambling sites. So, you must make sure you read into them to establish the legitimacy of the site you are using.

Illegal lotteries have also been a big problem in UK’s gambling sector in the past year (2020 – 2021). UKGC’s report noted a shocking number of illegal lotteries being promoted on social media. Over the past year, the gaming watchdog received a whooping 823 claims that social media platforms were promoting lotteries entirely not registered by the UK gambling commission.

The unregulated nature of these lotteries leaves room for exploitation of many non-suspecting gamblers who frequent these social media apps. Again, it all comes down to individuals being on the lookout and being able to differentiate what is genuine and really what isn’t. During the last year alone, 378 lotteries were removed by Facebook following reports by the UK gambling commission to the social media giant. Twitter removed 2, and YouTube removed 4.

Arguments Against Stricter Enforcement

Well, we all get the necessity for the UK gambling industry to be highly regulated. There is even a proposal by Members of Parliament in Britain to bring in cryptocurrency regulation when it comes to gambling. Cryptos are currently the in thing right now, especially in online gambling, and this is sure to spoil the excitement riffing even with the entry of crypto tokens and NFTs in gambling. However, all these measures have come under criticism from some players in this industry. Here’s the rationale;

Many argue that making the gambling market too strict may push individuals towards betters who do not operate within the confines of the law and ones’ that are not regulated by the UK gambling commission. It’s the reality of things, really.

Take, for instance, the Betting Gaming Council has recently released a report showcasing an increase of unlicensed betting websites. The stark increase in people opting for the black market is probably attributed to the COVID-19 pandemic that saw many people engage in betting to keep busy. Even though this prospect might seem scary to the rest of us, Andrew Rhoades, the UK Gambling Commission Chief Executive, is having none of it. It comes as no surprise owing to his fierce approach. He is quoted saying that the black market is nowhere near a threat enough to derail the UK Gambling commission from taking stern action if needed.

Bottomline

Some of the other key takeaways of the compliance report include:

• The report recommended that gambling companies always inform the public should they intend to close down. Take football index, for example, has received criticism even from the Chief Executive of the UK gambling commission after its collapse. Its non-transparency and lack of accountability towards its clients have led to many people losing their money.
• There have also been calls by the UK Gambling Commission for people to gamble responsibly and for regulators to monitor patterns of gambling that may indicate a person has a gambling problem. This will help the person to seek the help they require.

Well, plenty can be said about how the gambling industry has faired over the past year. Nonetheless, one thing is for sure that this industry is a fast-growing one, and the UK gambling commission has got its hands full in its regulatory capacity. And from the looks of it, the UKGC means business despite a few slip-ups here and there.

As the Gambling Act 2005 review continues, let us wait and see what the revamped UK gambling laws will look like and their impact on the evolving gambling sector.