UKGC issues warning following FSB failures

Simona Boshkova | Published 7 May 2020, 10:21 a.m.

The UK Gambling Commission’s enforcement activities started from the beginning of this year and haven’t stopped ever since. So far, the Commission has collected a record amount of fines from operators that failed to comply with its regulations. UKGC made it clear more than once that operators must put player protection a priority of their activities and ensure that they have anti-money laundering processes in place.

Many people were wondering how the UKGC is going to spend the collected funds from penalties. Last week, the regulator announced that it will provide £9m to GambleAware to help its charity that deals with problem gambling. The charity will use the funds to help players that are considered as problem gamblers.

Now, UKGC reviewed FBS Technology’s licence and found advertising, money laundering and social responsibility failures. For that reason, the Commission has once again reminded gambling businesses that they will face regulatory actions if they don’t carefully manage all the third party websites that they are responsible for.

FSB Technology to pay £600,000 after a series of failures

FSB Technology is a UK company focused on providing sportsbook and white label gaming solutions. The business model of FSB includes contracting provisions of its licenced activities to third parties. This setting is known as a “white label” which places responsibility on the licensee to make sure that its third-party partners maintain fair and secure gambling.

Nevertheless, the UK Gambling Commission conducted an investigation and found out that FBS failed to have sufficient oversight and effective policies on three third-party websites. It was found that FBS made advertising, money laundering and social responsibility failures in the period between January 2017 and August 2019. As a result, FSB is to pay £600,000 to the National Strategy to Reduce Gambling Harms.

Some of the failures that FSB made include ineffective customer interactions and source of funds checks on a customer who showed indications of problem gambling and spent £282,000 in a period of 18 months. In addition, the Commission discovered that FSB sent a marketing email to over 2,000 customers who had previously self-excluded. There was also a situation where a VIP team manager acted improperly and didn’t receive sufficient AML training.

Following the investigation, FSB implemented a couple of significant improvements to customer interaction, safer gambling, AML, and due diligence processes. The company stated that it is aware of its failures and will be able to meet the standards set by the UKGC with these improvements.

UKGC issues new white label warning after the FSB failures

After the FSB investigation, the UK Gambling Commission issued a warning to all gambling operators. Richard Watson, Commission Executive Director of UKGC, said that all operators should take notes from the FSB case because it shows that the Commission holds all licensees fully responsible for third-party relationships. Following this, Mr Watson said that the Commission will act against any of the licensees that won’t manage third parties properly.

The UK Gambling Commission has placed a couple of restrictive rules in order to make sure that gambling is fair, safe, and crime-free. They are still reviewing the actions of personal management licence holders involved in the FSB investigation.

Licenced gambling operators have a legal duty to ensure that their gambling facilities are in compliance with the Gambling Act 2005. The whole statement of the Commission can be found on their website.

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