The UK Gambling Commission has tentatively introduced its much-feared Financial Risk Assessments (FRA), but despite the regulator tip-toeing across the start line, the industry remains convinced that the highly controversial policy will lead to disaster.

The commission announced on Tuesday (July 7) that it will roll out its FRA project in three stages, with only the most high spending players and the largest operators required to comply during its initial phase.

In this first introductory period, any customer of the market’s largest operators depositing over £5,000 in 24 hours will need to be subject to an FRA, which in most cases will see a check conducted by a credit reference agency in the background without the gambler’s knowledge.

Eventually, that threshold will drop to £1,000 in 24 hours or £3,000 in a rolling 90-day period. Individuals aged under-25 will trigger checks if they deposit more than £750 in 24 hours or £2,000 in a 90-day period.

In some cases, customers will need to submit additional personal documents to allow operators to assess whether they need additional support.

It is these instances to which the industry has responded overwhelmingly negatively, with gambling firms warning of further consumer leakage to a black market that they say is already gaining ground.

The Gambling Commission argues that only 3 percent of customers that trigger these checks will require additional documents or open banking checks to complete their assessments, and that only 1 in 1000 gamblers will even trigger an FRA in the first place.

In fact, the regulator argues that the new system will actually reduce the existing reliance on document checks, by shifting some of that compliance burden onto a “frictionless” background system.

“People who place an occasional bet, are a recent winning customer or even regularly spend hundreds of pounds would be unlikely to need a check,” the regulator said.

Why now?

The commission said that its key motivation for pushing forward with FRAs is that some high spending customers are not being adequately protected.

Where FRAs reveal that a gambler may be spending beyond their needs, operators will be expected to take “proportionate” action, which may include reducing marketing or setting deposit limits, the commission said.

“We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk,” said acting Gambling Commission CEO, Sarah Gardner.

During an initial risk assessment phase set to kick off this Summer, licensees will not be penalised if they take no action as a result of an FRA, but the implication is very much that the regulator will take enforcement action in this area in the future.

There is currently no timeline for when the UK industry will move into the second implementation stage or what requirements will be added at that point.

The commission has said only that it will engage with industry implementation groups and other stakeholders beforehand.

Similarly, there is no estimate of when the third and final implementation stage will begin.

“We have listened to feedback throughout the pilot process which has led to us deciding to carefully proceed,” said Gardner.

“We will work with key partners to make sure that they are implemented in the most effective way for consumers and operators.”

Industry aghast

Trade group the Betting and Gaming Council has reacted with dismay to the news, with chief executive Grainne Hurst saying it was “deeply disappointed and frustrated” that the commission had not abandoned the project completely.

Hurst said that the phased implementation was a clear indication that the channelisation risks posed by FRAs, which it has consistently warned of, are real.

“These checks cannot be described as genuinely frictionless if they produce unreliable outcomes, lead to unnecessary account restrictions or ultimately result in customers being asked to provide documents or open banking information,” said Hurst.

The industry, in particular the horseracing sector, remains very concerned that revenues will shrink in the days and months following the introduction of FRAs, much as they did in the aftermath of the affordability regime introduced in the Netherlands in 2024.

“The commission’s announcement does nothing to assuage that concern,” said  Chris Elliott, a partner at London law firm Wiggin.

He added that it remains unclear what action operators should take once an FRA is complete and called for more guidance from the Gambling Commission.

“The staged approach risks being a staggered imposition of uncertainty rather than a measured roll-out of clear requirements,” said Elliott.

The UK gambling minister said the government supports FRAs, but appeared to back a tentative approach.

“The right balance must be struck so that assessments protect those in financial difficulties from the risk of gambling-related harm but do not create unnecessary burdens for the industry or consumers,” said Baroness Twycross.

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Crypto gambling is facing an inflection point, as longtime haven for the industry Curaçao finally steps up compliance requirements for the sector.

This week saw the Curaçao Gaming Authority (CGA) unveiled a raft of requirements for crypto gambling operators regulated on the Caribbean island.

The new rules require gambling companies to be significantly more aware of the crypto transactions flowing into their business.

“Licensees do not need to be blockchain analysts, but cannot operate blindly with regard to crypto transactions,” the guidelines read.

Operators will need to have policies in place to return funds when prohibited activity is detected and to report suspicious incidents.

Curaçao licensees will also be prohibited from converting coins between crypto currencies or into fiat for its customers, or in any way acting like an exchange.

In line with expectations recently laid out by the Financial Action Task Force (FATF), operators need to take steps to establish and record the origin of the transactions coming into their platform.

In short, operators will be required to comply with the FATF’s so-called Travel Rule, which establishes a package of information that should accompany every transaction.

The new policy indicates that the CGA considers any kind of crypto transaction to be high risk, from a money laundering perspective, and the regulator says that it “prefers” that licensees transact only in fiat-backed stablecoins.

Although the regulations impose no specific requirements on payment processors, any failings discovered by the CGA that relate to a PSP partner will result in enforcement for the licence-holding operator.

This, in effect, also raises the stakes for payment firms which want to ensure they don’t lose Curaçao clients over sloppy treatment of crypto transactions.

A ban on the use of wallets suspected of involvement in crime and operators acting as exchanges has come into effect immediately.

Operators have been given until September to submit a new crypto policy to the CGA, which lays out a timeline to reach full compliance.

Full integration with the new rules is expected by June 2027.

New era

The new crypto regulations are far removed from Curaçao’s controversial past as an offshore hub for the online sector.

Under the previous regime of sub-licensing from a group of shadowy master licence holders, even the Curaçao government admitted it wasn’t sure how many companies were operating with its regulatory approval, let alone if they were handling crypto gambling in a responsible manner.

“The regulatory wild-west of offshore crypto-gambling is officially closed,” said compliance expert, Daria Belova.

However there will continue to be those who question the CGA’s commitment to holding its licensees to account.

There will be a particular focus on clear industry leader, Stake.com. Although firm data is hard to come by, the crypto-forward operator is believed to account for a significant percentage of transactions in Bitcoin and other cryptocurrencies.

Is it at least publicly known that Stake’s $4.7bn in revenue for 2024 puts it in the same class as industry stalwart Entain.

Stake’s dotcom operation indicates that it is regulated by Curaçao through a business unit entitled Medium Rare N.V.

That will place the crypto gambling giant firmly in the crosshairs of these new regulations and any enforcement investigations which might follow the CGA’s July 2027 deadline.

There are also fears that some crypto-forward operators looking to continue doing business with lax oversight will simply leave Curaçao in search of a truly “anything goes” jurisdiction.

In the past few years, as the Caribbean island has indicated its intentions to re-regulate, regions like Anjouan have emerged as potential light-touch destinations for B2C gambling firms.

One payments industry commentator said that Curaçao operators face a real choice.

“This creates a fork in the road,” said Andrew Christodoulou, senior business development manager at PaymentIQ.

“Those who built their crypto payment infrastructure properly with segregated wallets, chain analytics and documented policies will absorb these changes without breaking a sweat.”

Others face a complex road to compliance or a decision to fully embrace the legally dubious offshore world.

One step in the road

New crypto rules are just part of the ongoing regulatory revolution in Curaçao and licence-holders have other new deadlines to grapple with.

These include a requirement that by October 8 they have updated the way they handle terms and conditions.

From this date, operators cannot treat their customers as having passively accepted T&Cs. Instead, the CGA expects licensees to show evidence that gamblers have proactively agreed to their terms.

Consumers must also be able to find a complete list of all approved deposit and withdrawal methods, as well as an estimate of normal processing times.

The post Curaçao’s Crypto Haven Status Challenged By New Regulations appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.

Malta’s Prime Minister has said his nation will veto any attempts by the EU to introduce a bloc-wide online gambling levy, threatening to place the industry at the centre of febrile European politics.

Robert Abela has told Malta’s parliament that he would use his nation’s member state veto to block the passage of the next EU budget, if a proposed gambling levy is included.

The budget, formally known as the Multiannual Financial Framework (MFF), lays out how the EU will spend its €2trn budget from 2028 to 2034.

The prospect of adding a continent-wide tax to the budget remains only a proposal, but the idea has heavyweight backing.

Vice-president of the European Parliament Victor Negrescu is spearheading these efforts, arguing that a fast-growing digital industry that generates billions in revenue should be subject to EU-level taxation.

Negrescu says that the levy could generate between €2-4bn every year.

“This industry fully benefits from the EU’s single market, digital infrastructure and crossborder access, but operates under fragmented rules, unequal taxation and insufficient enforcement,” he said.

The online gambling sector might well quibble with the specifics of these claims.

The idea that it “fully benefits” from the EU single market may have been unassailably true in the point-of-supply era, but the subsequent fragmentation of national rules that Negrescu refers to has significantly complicated that picture.

Nevertheless, backing for the levy from a senior European politician has naturally spooked the industry and its primary champion within the EU, Malta.

The levy would be so damaging to Malta’s economic interests that it is willing to use its most powerful EU instrument by executing a veto in the European Council in order to block the budget from being approved.

That would likely plunge the island nation into the centre of a political firestorm, but recent history suggests that smaller EU nations and their allies can successfully disrupt budget negotiations.

During discussions over the 2020 EU budget, Poland and Hungary successfully secured concessions after they both threatened to veto the MFF over rule-of-law requirements.

Malta will also hope to rely on support from the Friends of Cohesion, an informal alliance of 16 nations concerned with regional development, of which it is a part.

Negrescu’s pledge to pair his levy with a “clear EU directive against illegal and unlicensed platforms” is unlikely to satisfy the online gambling industry, despite growing complaints of a rampant black market from a number of quarters.

Malta strikes again

In simple terms, Malta is seeking to protect an industry which accounts for 10 percent of its gross domestic product.

The nation has shown a clear willingness to ignore the EU’s wishes in order to shield the many gaming firms that host their headquarters within its borders.

Most notably, the creation of Bill 55 has successfully protected local companies from having to repay hundreds of millions of euros in player refund settlements.

Ongoing cases before the Court of Justice of the European Union suggest that Europe’s top judges will soon rule against Bill 55, which is now Article 56A of Malta’s gambling act.

The European Commission also launched infringement proceedings against Malta over the provision

Tax troubles.

There are so far no specifics on how the levy would be calculated or what value it would be set at, but beyond Malta an additional levy would also be extremely challenging for operators in European markets already struggling with high tax burdens.

This includes the Netherlands, where a government report released this week has shown that staggered increases to taxes of 37.8 percent of gross gambling revenue (GGR) have failed to deliver any benefit to the country’s budget.

Even a relatively slight increase to this tax rate could send more operators scurrying out the market and see channelisation dive further than its current rate of 55 percent.

Nations like France, where online betting is taxed at 59.3 percent of GGR, or Portugal, with its 8 percent turnover tax on online sports betting, would also feel an impact.

Negotiations over the contents of the EU budget are set to continue for several months, with the approval process expected to be completed in late 2026 or early 2027.

Leaders in the Council of Europe have agreed to come to a preliminary deal on the MFF by October, according to a coordinated statement issued earlier this month.

Malta’s devout opposition to a possible gambling levy is just one of a range of issues under discussion, including a stark divide between nations such as Germany, which favour spending cuts, and the Friends of Cohesion, who want additional cash for agriculture and regional funding.

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