Compliance Updates

Bet on Compliance: Navigating the Stakes with the UK’s Affordability Checks

Published

3 months ago

April 15, 2024

George Miller

bet-on-compliance:-navigating-the-stakes-with-the-uk’s-affordability-checks

Reading Time: 4 minutes

By Isabelle Zanzer, Senior Regulatory Compliance Specialist at ComplianceOne Group

Feeling like the deck is stacked against you with all these talks of financial checks in gambling? Wondering if this new game plan will leave your privacy on a losing streak? If so, no need to bet on uncertainty anymore. We’re here to deal you in on the UK’s latest gamble towards responsible betting. Let’s shuffle through the details and lay our cards on the table, as we make sure you’re holding a winning hand in understanding what’s in play. Ready to roll the dice and dive in? Follow me.

On July 26, 2023, the UK Gambling Commission launched consultations on proposed reforms in the Gambling White Paper, focusing on areas like direct marketing, age verification, game design, and financial risk checks. This article delves into the latter, highlighting new financial vulnerability and risk assessments to safeguard customers.

The UK’s consultation introduces two checks for gambling: light-touch financial vulnerability checks and detailed financial risk assessments. The first tier of checks is designed to identify financial vulnerabilities such as bankruptcy orders or significant debts, using publicly available data. The second tier involves enhanced financial risk assessments triggered by significant losses, requiring more comprehensive scrutiny of a customer’s financial situation.

Thus, in simple terms, what is going to happen at the heart of the UKGC’s new measures are two-tiered affordability checks designed to assess the financial vulnerability and risk of consumers engaging in online gambling. The first tier involves unintrusive checks that will be triggered when a customer reaches a specified net loss within a rolling period, using publicly available data to identify potential financial vulnerabilities. To dive a little deeper, this check will be conducted if a customer either has net losses of £125 in a rolling 30 days or £500 within a rolling 365 days. It would need to include “at a minimum a customer-specific public record information check for significant indicators of potential financial vulnerability”, including whether the customer is subject to things such as a bankruptcy order, county court judgment, or individual voluntary arrangement. Net loss would be defined as loss of deposited monies with an operator, not counting restacked winnings or bonus funds.

The second tier represents a more detailed assessment of financial risk, which is activated at higher loss thresholds. A comprehensive financial review is required for gamblers with significant losses, examining their financial data including credit status and spending. If third-party data is unavailable, operators may directly seek customer consent for access, ensuring a thorough understanding of financial health.

The gambling industry’s reception of these checks has been cautiously optimistic, particularly regarding the initial, less invasive tier. However, the prospect of more detailed financial assessments has sparked debate, not only among operators but also among consumers wary of privacy infringement.

As the UK gambling sector adapts to these new regulations, the challenge will be to strike an optimal balance between safeguarding consumers and maintaining the operational viability of gambling platforms. The pilot study represents a critical step in this process, offering valuable insights into the practical implications of affordability checks and the potential need for adjustments in response to industry feedback and consumer concerns.

The outcome of the pilot study and subsequent parliamentary debates are pivotal in shaping the future of affordability checks in the UK gambling sector. As operators, regulators, and consumers navigate these changes, the overarching goal remains clear: to foster a safer, more responsible gambling environment that protects consumers from financial harm while ensuring the industry’s sustainable growth.

Striking the right balance in the new UK gambling regulations is like walking a tightrope. With the introduction of light-touch and in-depth financial risk assessments, operators may face the challenge of protecting players without overstepping into their privacy. These two-tiered checks aim to shield those at risk, using both public data and deeper financial insights.

The key here for operators will be to navigate these waters carefully, ensuring player safety while keeping the game fair and enjoyable. Now, when trying to find a balancing act, we need to consider the following:

Regulatory Compliance Risk: Reviewing the existing practices against the UKGC’s affordability check guidelines, identifying discrepancies, and recommending changes to align with the new regulations.
Data Privacy and Security Risk: Evaluating the ability to handle and protect sensitive financial data in line with GDPR and other data protection laws.
Operational Risk: Assessing the impact of the new checks on daily operations and customer interactions.
Financial Risk: Analysing the potential financial implications of the affordability checks on revenue and customer base.
Reputational Risk: Considering the public and customer perception of the affordability checks, especially regarding privacy concerns, the key here, like in all relationships, is communication. For example, it is estimated that just the very highest spending 3 percent of accounts would undergo financial risk assessments. Most financial risk assessments – at least 80 percent – would be carried out through credit reference agencies. The checks are expected to be frictionless and not interrupt the customer journey unless concerns are raised. It is estimated that a further 10 percent of risk assessments will be done through limited data-sharing through third-party open-source banking, which is similarly straightforward from a customer perspective.

Finding this balance involves a tailored approach as one offered by ComplianceOne group, whereby operators can personalize checks based on individual player profiles, ensuring those at higher risk receive the attention they need while others continue to enjoy their play with minimal interruption. It’s about creating a safety net that catches those in need without trapping everyone else in unnecessary checks. The key to a winning strategy is the execute this balance, and understanding what is at stake: Reputation, Sustainability and Trust.

The post Bet on Compliance: Navigating the Stakes with the UK’s Affordability Checks appeared first on European Gaming Industry News.

Up Next

Cheltenham and Grand National 2025 start now

Don't Miss

Sportingtech appoints Claire Bailiss to newly created Chief People Officer role

Compliance Updates

How Curacao new AML requirements differ from other flexible license jurisdictions

Published

1 week ago

July 17, 2024

George Miller

how-curacao-new-aml-requirements-differ-from-other-flexible-license-jurisdictions

Reading Time: 2 minutes

By: Dmitry Hotsyn, Senior Consultant and Head of CIS Desk at 4H Agency

Discussing Anti-Money Laundering (AML) rules in a way that keeps everyone awake is a real challenge. The iGaming industry often overlooks anything filled with jargon like KYC, AML, CDD, and SoWs—terms that just breed myths and misconceptions about jurisdictions supposedly having lax AML standards and low compliance burdens. For a while, Curacao was viewed as one of these almost mythical places.

Not anymore.

A significant shake-up has occurred with Curacao’s latest overhaul of its AML regulations, set to take effect on September 1, 2024. This update has triggered quite a bit of debate among gambling operators who view these new rules as unwelcoming, especially since Curacao is known for its sluggish pace in updating its gambling regulations.

But may it really be as bad as Curaçao’s deadline management?

Curacao’s AML Regulatory Changes: An Overview

Curacao is continuously revamping its regulatory frameworks, taking a page from Malta’s book — Maltifying the industry may work best to describe this process. The new AML rules, while perceived as burdensome, are in fact a balanced update alligning the Curacao practices with generally acceptable standards. Key aspects of the new regulations include:

Clear Customer Due Diligence (CDD) thresholds: Operators must conduct CDD at the earliest practical time, but no later than when a player engages in a transaction amounting to approximately EUR 2200;
Sanction and Politically Exposed Persons (PEP) Screening: Mandatory for at least EU, US and UN sanctions lists;
High-Risk Indicators: A detailed list of indicators for high-risk cases has been provided, noting that the use of cryptocurrencies increases risk, though it is not outright prohibited;
AML Officer Role: Each operator shall have a dedicated AML officer, equipped with sufficient resources and headcount to manage risks effectively;
Policies and Guides: Ah year, more internal docs, rules and practice guides are expected from the operators holding licences in Curacao.

Despite the extensive nature of Curacao’s new rules, in essence, they closely resemble those enforced in Malta and other EU countries, as well as competing jurisdictions offering flexible licenses. The upcoming webinar hosted by 4H Agency and Hipther Agency will delve into these comparisons, focusing on jurisdictions like Anjouan, Kanawake, and Tobique, alongside Curacao.

Key Insights on AML Across Jurisdictions

Detailed AML Frameworks: Curacao and Tobique lead with the most comprehensive AML regulations. Kanawake’s requirements are also robust albeit not as detailes as Curacao rules;
CDD Thresholds: Similar financial thresholds exist across these jurisdictions (approximately EUR 2000), with varied stipulations on the timing of CDD post-player registration (again, Curacao is not the leader here);
Outsourcing AML Functions: All jurisdictions permit outsourcing some AML activities to third-party providers, providing flexibility in compliance strategies;
Stringency of Regulations: Tobique’s regulations are notably stringent, casually requiring additional checks like adverse media searches to identify higher risk profiles;
Anjouan the Outlier: Anjouan stands out for its outdated AML framework, lacking specific provisions for the gambling sector. For now, this could attract operators seeking more AML-friendly environments. However, Anjouan will inevitably follow the Curacao’s reformatory steps if the country intends to make iGaming an important factor of the now-struggling economy.

The evolution of AML regulations in Curacao represents a predictable shift towards more robust regulatory environment, aligning more closely with global standards. While initially perceived as onerous, these changes are in line not only with international practices, but with the rules already in force in a competing jurisdaction.

Our upcoming webinar will further explore these developments, providing attendees with comprehensive insights into flexible licensing options in 2024.

The post How Curacao new AML requirements differ from other flexible license jurisdictions appeared first on European Gaming Industry News.

Compliance Updates

Dutch Regulator Warns JOI Gaming Over Use of Celebrities

Published

1 week ago

July 17, 2024

Niji Narayan

dutch-regulator-warns-joi-gaming-over-use-of-celebrities

Reading Time: < 1 minute

JOI Gaming, the operator of gambling brand Jacks in the Netherlands, has been warned it could face a maximum penalty of €1m if it repeats a violation of breaches of the ban on role models in gambling marketing.

The Dutch gambling regulator, Kansspelautoriteit (KSA), said that at the Jack’s Racing Day event in 2023, role models for the operator signed caps with the event logo and the Jacks brand name.

Meanwhile, role models posing with hostesses wearing corporate clothing with the Jacks logo were pictured and posted on the Jack’s Racing Day website and on social media.

“These posts were still available when the order was imposed. If JOI Gaming does not remove these statements immediately, the company must pay a penalty of €50,000 per day,” the KSA said.

If the violation is repeated in the run-up to or during future editions of Jack’s Racing Day, JOI Gaming must pay a penalty of €200,000 per day with a maximum penalty of €1m, the regulator said.

Jack’s Racing Day 2024 is set to be held on August 2-4 at TT Circuit Assen. “To protect vulnerable groups such as young people and risk and problem gamblers, strict rules apply to the use of role models for gambling advertising,” the KSA said in a statement.

“Role models include celebrities, (former) professional footballers, influencers and models. The use of role models is prohibited for high-risk gambling, such as casinos and online gambling.

“For lower-risk gambling, such as lotteries, they may be used under strict conditions.”

The post Dutch Regulator Warns JOI Gaming Over Use of Celebrities appeared first on European Gaming Industry News.

Compliance Updates

Danish Authorities Form Agreement to Tackle Illegal Gambling Marketing

Published

2 weeks ago

July 16, 2024

Niji Narayan

danish-authorities-form-agreement-to-tackle-illegal-gambling-marketing

Reading Time: 2 minutes

In a new agreement between the Consumer Ombudsman, the Gambling Authority and the Gambling Board, the authorities and the board will coordinate their efforts when they have to take action against gambling companies’ illegal marketing of games in Denmark.

Gambling companies’ marketing can cross jurisdictions. Therefore, the Consumer Ombudsman, the Gambling Authority and the Spilreklamenævnet have just entered into a cooperation agreement with a view to avoiding duplication of effort and strengthening the overall coordinated effort when it comes to the regulation of gambling companies’ marketing in Denmark.

The Gambling Advertising Board will forward cases to the Consumer Ombudsman or the Gambling Authority if gaming companies do not comply with the board’s criticism, or if the board finds violations of the authorities’ rules by a company.

Conversely, the Consumer Ombudsman and the Gambling Authority will inform complainants of the possibility to complain to the Gambling Advertising Board if a company breaks the industry’s code of conduct, but not the rules handled by either the Consumer Ombudsman or the Gambling Authority.

The Consumer Ombudsman and the Gambling Authority oversee various areas in relation to the marketing of games. The Consumer Ombudsman is responsible for the supervision of gambling companies’ compliance with the Marketing Act, as well as other consumer protection rules, while the Gambling Authority supervises compliance with the rules on the marketing of games in section 36, subsection of the Gambling Act. 1, as well as the rules on sales promotion measures in relevant gaming announcements.

The Gaming Advertising Board, which is a board set up by players in the gaming industry, handles complaints about gaming companies’ marketing that is in breach of the industry’s code of conduct. The purpose of the code is to strengthen the social responsibility of the industry’s marketing towards vulnerable groups and children, as well as to limit gambling addiction.

It has been agreed that the Consumer Ombudsman, the Gambling Authority and the Gambling Advertising Board will regularly inform each other of relevant cases, as well as hold annual meetings.

Consumer Ombudsman Torben Jensen said: “Our new cooperation agreement with the Gambling Authority and the Gambling Advertising Board strengthens our supervision of gambling companies’ marketing. The agreement involves better internal communication, ensures coordination and prevents duplication of work, which benefits consumers.”

The post Danish Authorities Form Agreement to Tackle Illegal Gambling Marketing appeared first on European Gaming Industry News.