Bigger fines await gambling operators if compliance problems persist

The new report issued by the Gambling Commission on Thursday highlighted the "step change" in the regulator's approach to enforcement in recent times, gambling law expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law.com, said.

The Gambling Commission's enforcement report (29-page / 715KB PDF), the first of its kind it has issued, contained details of the regulator's enforcement action over the last year, issues and practices it has concerns about, and guidance operators should follow.

It warned operators that if they ignore the guidance it issues they face potentially larger fines in future.

"Licensees are on notice that a failure to adhere to the guidance in both this document and within our public decision notices may see us bringing enforcement action more swiftly and with greater penalty if we are of the view lessons are not being learned, or if the issue in question has been uncovered by us or another authority," the Gambling Commission said. "Similarly, operators can expect lesser penalties if they report the matter to us promptly, cooperate during our investigation and proactively look to rectify matters."

Neil McArthur, Gambling Commission chief executive, said the regulator is demanding a 'top down' approach to compliance.

"It is important that CEOs and boards take this report seriously because we need them to understand their responsibilities and make sure that they are investing enough resources to make sure that the gambling they offer is as fair and safe as it can be for their consumers," McArthur said. "We want operators and their boards to set the tone from the top in a way that puts the consumer first. We want them to manage the risks and we want them to innovate as much to protect their consumers as they do to drive profits and the bottom line."

The report identified particular concerns with the way gambling operators are managing risks of money laundering and problem gambling, and also reiterated its concerns about the use of unfair contract terms and practices, and compliance in gambling adverts.

Rees-Gay said: "The enforcement report reinforces the step change taken by the Gambling Commission in recent years to focus on consumer protection. It will be clear to all operators in the gambling industry that if they have not acted previously to ensure that they are compliant with the licensing conditions and codes of practice (LCCP) in relation to responsible gambling and consumer protection, that now is the time to do so."

"The recent spate of large fines and the threat of further increased fines should mean that operators are taking the Gambling Commission seriously as a regulatory body," he said.

Earlier this month, online gambling provider 32Red paid a penalty of more than £2 million after the Gambling Commission found it had failed to meet its obligations on social responsibility and on addressing the risk of money laundering.

Last year, online gambling operator 888 was hit with a £7.8 million penalty after "a technical failure" meant thousands of customers who had self-excluded themselves from gambling were able to continue to use some of the company's gambling services.