By Ashley Young-
The Gambling Commission has reminded remote operating licence holders that the responsibility for regulatory compliance with the Licence Conditions and Codes of Practice (the “LCCP”), lies with licensees .
The Commission said that the said responsibility applies even when the licensee is operating a white label website for a third-party.The reminder comes following a licence review into FSB Technology (UK) Limited (“FSB”) and the voluntary suspension of the white label Blackbet website in the meantime.
BREACH
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Breaches of regulatory standards have become too common among irresponsible operators, many of which have been heavily fined in the past two years.
Reviews of operators occur when the Commission suspects that conditions of an operating licence are being breached. The Commission also review operators where the licence holder may be unsuitable to perform the licensed activities.
In August, blackbel white label suspended all gambling activities on this site for the foreseeable future.
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The Commission highlighted Paragraph 1.1.2 of the Social Responsibility Code, making ”licence holders responsible for the third parties with whom they contract” . It further requires licensees to “know their customers and be able to demonstrate knowledge, oversight and proactive interactions where appropriate”.
TIMELY
The Commission said any interventions must be completed in a timely manner…[and] failure to maintain adequate control of third parties can result in regulatory action including suspension or the loss of the operating licence.” The regulator added that third parties should act as if they shared the same licence.
The Commission added that further guidelines will be issued to help licensees ensure compliance and operation in line with its rules and regulations. In the meantime, the Commission expects to see licensees take pro-active steps, for example, by conducting due diligence on their third-party partners to confirm (amongst other things) that they are competent and reliable.
The regulator also requires “any licensee that relies on a third-party to conduct any aspect of the licensee’s business related to licenced activities to ensure that sufficient oversight and controls are in place to ensure all activities are carried out in accordance with the LCCP.
Notably, it adds, but not exclusively, ”social responsibility and anti-money laundering requirements.”
SANCTIONS
Possible sanctions include the suspension or loss of an operating licence. Remote operating licence holders take the necessary measures within their organisations to create an effective system of monitoring compliance by third-party partners or review their existing systems.
Judging from the current licence review into FSB, it’s apparent that the Commission is taking a firm approach to ensure compliance in these situations. As with affiliates (over whom the Commission has no jurisdiction), the Commission will expect its licensees to take responsibility for third parties with whom it does business.
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