What does the Entain news mean for the UK gambling industry?

What does the £17 million fine the Gambling Commission (GC) handed to Entain yesterday mean for the gambling industry?

The first and most obvious point to make is that it demonstrates yet again just how seriously the Gambling Commission take their remit. The full details of the reasoning behind the decision are available here, and whilst the individual cases discussed may be outliers, the general tone and severity of the penalty no doubt make for uneasy reading for any operator in the UK market. 

To put it really simply, reading this judgement it feels optimistic, bordering on naive, to think that any of this is going away in the short term. The whitepaper is almost irrelevant: this is the world as it is today, and operators have to think clearly about how to comply with the requirements of the GC as they are right now. For their part Entain have suggested that these breaches relate to legacy issues and their current processes are compliant. If that is the case, then they are to be congratulated on leading where others will need to follow.

In the detail, a few other points are worth making:

  • The inclusion of retail in the requirements for both AML and affordability checks is explicit, with one case involving losses of £29,372 relating to a shop customer. Of course it can be harder to keep track of cumulative customer spend in shops, but operators are going to have to take steps to apply affordability checks in the retail estate in one way or another.
  • The GC call out the inadequacy of ‘open-source searches’ for source of funds (SOF) checks. This is a recurrent theme, it is becoming clearer and clearer that operators should be using real financial data, shared by the customer, before making decisions around SOF and indeed affordability.
  • The need to interact with customers is noted. The judgement mentions that a single chat interaction was not sufficient when dealing with a customer with the business for 18 months who had deposited £230,845.

What does this all add up to? Well, something along these lines:

For any customer depositing significant amounts of money, it is necessary to know that customer (in a deeper sense than a simple KYC check), and to understand their financial situation. Not on the basis of passive checks, but on that customer’s own financial data.

The ClearStake view

We make no bones about it: we exist to help operators, not persecute them. We don’t argue for more affordability and AML checks, we just want to help operators protect their customers, but do so in a way that has the least possible impact on their bottom line. We want to ensure that operators can navigate the current uncertain climate and be protected from fines and reputational damage - damage that extends beyond any one operator and to the industry as a whole.

We also want to ensure operators can take business from those who can afford it. But to do that, we have to get beyond a situation where the checks that need to take place are missing in so many cases.

The answer is in the technology that makes these checks easy, straightforward, and (relatively) painless for customers. And it exists today - in a form that works in both retail and online environments.

We understand that many operators don’t like affordability and AML checks. Why would they, when in most cases they are doing them wrong? Would you like to spend vast amounts of money every year manually looking through bank statements and pay slips, only to get the sums wrong and find yourself on the wrong end of the GC anyway?

A modern due diligence process considers the needs of the customer. It makes it easy for them to share data, and gives them control of that data at all times. It does the hard work for the operators, and returns results that can be trusted - and evidenced. We know there is interest based on the interest we've already received from both land based and online operators alike.

It’s time to turn that interest into action.