The Gambling Commission has issued a reminder to remote operating licence holders that the responsibility for regulatory compliance with the Licence Conditions and Codes of Practice (the “LCCP”), lies with licensees – even when the licensee is operating a white label website for a third-party.
The reminder comes in the wake of the opening of a licence review into FSB Technology (UK) Limited (“FSB”) and the voluntary suspension of the white label Blackbet website in the meantime.
The Commission highlighted Paragraph 1.1.2 of the Social Responsibility Code which emphasises that licence holders are responsible for the third parties with whom they contract and stated that licensees must “know their customers and be able to demonstrate knowledge, oversight and proactive interactions where appropriate. 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.
Further guidelines will be issued to help licensees ensure they are compliant and operating in line with the Commission’s rules and regulations. In the meantime, the Commission expects to see licensees take pro-active steps to ensure compliance for example, by conducting due diligence on their third-party partners to confirm (amongst other things) that they are competent and reliable. Furthermore the regulator said “any licensee that relies on a third-party to conduct any aspect of the licensee’s business related to licenced activities must ensure that sufficient oversight and controls are in place to ensure all activities are carried out in accordance with the LCCP, notably, but not exclusively, social responsibility and anti-money laundering requirements.”
With possible sanctions including the suspension or loss of an operating licence, it is crucial that 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 ensuring 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.