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The UK Gambling Commission says it is giving the industry some leeway by holding off on action against suppliers that service the black market, but has warned it will only wait for so long.
A senior executive at the regulator told the industry it has grave concerns over the number of suppliers that provide content to both the regulated market and those operators targeting the UK illegally.
Speaking at a conference organised at the London offices of law firm CMS, commission deputy chief executive Sarah Gardner encouraged the gambling industry to hold its suppliers to account, otherwise the regulator will step in.
“Were we to take action we’re very conscious of the effect that could have on the licensed industry,” she said.
Gardner noted that some operators are very reliant on particular suppliers and that taking extreme action like revoking licences could leave some B2C companies with a sudden absence of content.
“But at some point, we will have to take action if they persist in supplying the unlicensed market,” she said.
“So we do encourage operators to do their own due diligence on their suppliers to make sure they are not supplying to the black market because you are creating a risk exposure.”
Supplier giant Evolution is currently facing a licence review in the UK, which the company attributed in part to allegations that its content is available on some unlicensed websites.
Further Gambling Commission action against double-dealing suppliers would build on the regulator’s renewed focus on the UK black market.
As part of that work, Gardner previewed a report she said would be published in the summer, which seeks to understand the consumer motivations for gambling outside the licensed market.
Some are looking for better bonus offers or to gamble with crypto currencies, while others are seeking to escape self-exclusion, she said.
A meaningful cohort, Gardner noted, does not even realise they are gambling with an unlicensed operator.
Asked repeatedly if a customer demand for crypto meant that the commission would finally approve betting with bitcoin and other currencies, Gardner offered only scraps of hope.
“We’re looking at this the whole time, we’re talking to colleagues across government about how it possibly could be regulated, but we’re in the starting blocks for that,” Gardner said, adding that the commission was unlikely to budge before UK financial regulators relaxed their stances on crypto.
Gardner, who was joined on the panel by Betting and Gaming Council (BGC) chief executive Grainne Hurst, also discussed the ongoing pilot into financial risk assessments.
Hurst said the industry was concerned about reports provided by different credit reference agencies on the same individual, often meaningfully diverging from one another.
“We need to have confidence that the outputs are consistent,” she said. “I accept we’ll never get full consistency, but the amount of discrepancy is relatively worrying.”
The scheme remains in a pilot phase with no defined end date and Hurst said the commission and industry were working well together on ironing out problems, including the credit reference issues.
Looking to distance the planned financial assessments from the more controversial concept of affordability, Gardner repeated the regulator’s assertion that it has no requirement for its licensees to carry out these kinds of checks.
The claim has been challenged by several in the industry, who point to previous guidance and enforcement reports that suggested operators are expected to be conducting customer affordability reviews.
“We are in open dialogue with the commission because it has led to a bit of confusion,” said Hurst.
The BGC contends that requests for personal paperwork are the motivation behind a large percentage of black market gambling.
To reduce the number of times operators feel a need to request documents from their customers, Hurst said the trade group was working on a new AML code, mirroring the social responsibility code it rolled out last year.
The code is one of several pending regulatory changes in the UK, including several elements of the 2023 white paper that have yet to be implemented.
These include a long-desired liberalisation of land-based casino rules and the creation of a gambling ombudsman, which, despite being one of the most high-profile projects promised by the then-government’s review of the Gambling Act, has lain dormant for many months.
“We worked really closely [on the ombudsman] with DCMS in the run up to the election [of July 2024] and we reiterated that with the new government and it’s with them for their review,” said Hurst.
