Technology companies have been warned
The UK Gambling Commission (UKGC) has warned technology companies that they will face regulatory action if they do not properly manage all third-party websites that they are responsible for.
This warning comes after the UKGC fined FSB Technology ￡600,000 ($741,000) for money laundering, advertising, and social responsibility failings. The company will have to change the way it operates as a result of these failings. There will also be extra conditions applied as part of the company’s operating license. This will ensure that risk-based due diligence is comprehensively conducted on current and new third-party partners.
money laundering, advertising, and social responsibility failings
As part of FSB’s business model, it contracts certain provisions of its licensed activities out to third parties. This is commonly known as white labeling.
In this relationship, the core licensee still is responsible for ensuring that all third-party partners are ensuring that their gambling offering is crime-free, fair, and safe. The actions of the personal management license holders that are part of this case are still being investigated.
FSB failed to carry out adequate checks
Following an investigation, the UKGC deemed that FSB was not adequately conducting oversight of three third-party partners. FSB also had ineffective social responsibility and anti-money laundering policies that were active from January 2017 until August 2019.
FSB also sent a marketing email to 2,324 people who had already self-excluded from the operator. There was also a case of a VIP manager not conducting proper oversight and not being properly trained in anti-money laundering policies. There was also the displaying of an ad that had cartoon nudity for a site that faces a UK audience.
The UKGC won’t tolerate such failings
The executive director of the UKGC, Richard Watson, used this case as an example of how the commission will be cracking down on third-party failings. Speaking about the FSB issues, he said:
These were blatant breaches of rules we have put in place to ensure gambling is fair, safe and crime-free.”
This warning comes at a time when there are major concerns that the ongoing coronavirus pandemic is leading to increasing levels of problem gambling. Numerous representative bodies have been calling on operators in the UK market to take further actions to protect customers.
This resulted in Betting and Gaming Council (BGC) members committing to stopping all television and radio advertising until the end of the lockdown.