The Gambling Commission of Great Britain is at the forefront of gambling regulation and compliance, ensuring the industry’s legitimacy. In September this year, they suspended In Touch Games’ three licences, which allowed the company to supply gambling products across 11 sites. The suspension was based on non-compliance with licensing conditions, unrealistic withdrawal deadlines, and social responsibility failures. 

The case suggests a closer examination of the Commission’s regulations is needed to understand the broader implications for the online gambling industry. Let’s dive in and take a look.

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The In Touch Games suspension – more details

The Gambling Commission rarely suspends operator licences. Usually, sanctions, like In Touch Games’ January fine for anti-money laundering failures, are the first point of call. If an operator continues to flout the rules, is a repeat offender, or the case warrants further investigation, the GC then looks to the more severe sanctions, like restricting or removing an operator’s licence.

In its decision, the GC said that In Touch Games may be “unsuitable” to operate in the UK based on a series of failures, including anti-money laundering, fair and transparent terms and practices, and reporting key events.

Interestingly, on September 5th, following the Gambling Commission’s announcement, In Touch surrendered its UK licences. Regardless, this hasn’t meant an end to the investigation, and the GC is still examining the case under section 116 of the Gambling Act 2005. This is not the first time the Commission has flagged In Touch Games, fining the company £2.2m in 2019 and £3.4m in 2021 for similar failings.

Anti-money laundering regulations and source of funds

One of the principal objectives of the GC is to ensure that the gambling industry in Great Britain is crime-free. By and large, this is regulated by financial conditions and mainly governed by anti-money laundering (AML) regulations. 

In the case of In Touch Games, the regulator found that they did not have appropriate policies, procedures, and controls in place and did not sufficiently consider the Gambling Commission’s AML risk assessment or guidance. 

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Part of the Commission’s AML guidance and regulations include KYC checks for players and source of funds inquiries, especially for those people with links to high-risk geographical regions or politically exposed persons and their family members. Of all gambling regulations in the UK, these are some of the most important and enshrined in law outside of the Gambling Commision. All companies must know where the money they process comes from, monitor and assess for risk factors, and ensure it is not associated with crime and terrorism.

After previously fining In Touch for AML failures, the GC expected to see significant improvements. While the company made some progress, the Commission decided the changes weren’t robust enough. For example, they were not following their company guidelines of completing a source of funds check when customers deposited and lost more than £10,000 in 12 months.

As AML compliance is complex, most gambling operators use specialist third-party systems to ensure monitoring and compliance in this area and implement strict internal policies – this is best practice. Most salient, when found non-compliant, the subsequent improvements are substantial, usually overcompensating to ensure they meet the regulator’s expectations.

Fair and Transparent Terms and Practices

Another area highlighted by the In Touch Games case is the requirement for fair and transparent terms and practices. These rules apply to all areas of business practice, with the Commission emphasising the need for clear terms and conditions and outlining potential risks associated with gambling.

In cases where information may be unclear or confusing, operators should demonstrate the rules with clear examples, avoiding complex or confusing jargon. In particular, operators are asked to provide precise details about promotions, bonuses, and withdrawal policies to ensure players can make informed decisions. 

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While GC guidelines can often overlap, the need for transparency has remained a backbone of policy and was again stressed more recently by Commission Chief Andrew Rhodes when discussing the increased number of complaints received by the regulator regarding players not understanding why withdrawals are being delayed.

One area where fairness and T&Cs come under scrutiny is wagering requirements. These are of particular interest as many sites enforce high requirements that bind players to gamble large amounts of money in short periods to access a withdrawal in connection with a bonus. A way for players to mitigate against this scenario is to opt for a no wagering requirements casino. This type of bonus and site are also more favourable from a regulatory point of view as they tend to offer a player-centric approach, transparent terms, and focus on fairness.

Affordability and other social responsibility failures

When the Gambling Commission suspended In Touch Games’ licences, they cited other social responsibility failures, including problems with affordability checks. They found that it took seven weeks for the company to interact with one player flagged for “erratic and extended play.” In a second case, they accepted that a player earned £6,000 a month without undertaking any checks to verify the information.

The Gambling Commission currently encourages online casinos to keep an eye on affordability so that customers only gamble what they can afford, but there are no firm benchmarks. Operators are expected to use open-source data to assess customer affordability and follow guidelines regarding remote customer interactions when they suspect harm may occur, acting promptly.

As part of the Gambling Act Review, the GC is shoring up the rules by introducing formal affordability checks. The new regulations will set clear thresholds for when operators should undertake financial checks based on consumer spending habits. Another upcoming regulation aimed at affordability is slot stake limits. There is some controversy surrounding both measures as implementing affordability checks, and maximum slot stakes have been argued to be a potential incentive for driving players toward the illegal market, where such limits are absent. 

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In light of the upcoming regulatory changes and their potential effects, it has never been more critical for operators to ensure compliance and have appropriate systems for monitoring and checking players’ spending to ensure that it is sustainable, safe, and within their means.

Regarding wider social responsibility commitments, operators must act ethically, prioritising player safety and responsible gambling measures. This includes encouraging education about gambling, how to use responsible gambling tools, and providing effective self-exclusion. 

Moving forward

The April 2023 Government White Paper on gambling aims to address ongoing challenges and concerns within the industry, including issues related to player protection, fairness and social responsibility. The suspension of In Touch Games’ licence serves as a reminder of the need for high levels of social responsibility in the online gambling industry. 

The most important lesson from the In Touch Games case is that accidental failures are forgivable, although costly, but repeat cases where operators do not follow the rules and improve after sanctions result in the removal of permission to operate in the UK. Operators should approach all Gambling Commission guidance and operating rules from the point of over-compliance to ensure player safety first and foremost.

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