Protecting customer funds
Your terms and conditions must include information about your arrangements for protecting the customer funds you hold in the event of insolvency, the level of that protection and the method by which it is achieved.
You must also make this information available at the point at which a customer deposits money, in a manner which requires customers to actively acknowledge they have read it. You must not allow customers to use their funds for gambling until they have provided this confirmation.
LCCP: Licence condition 4.1.1
LCCP: Licence condition 4.2.1
You must disclose to customers any changes to your arrangements for protecting customer funds before implementing those changes in your terms and conditions. You must also disclose the changes when a customer subsequently makes any deposits (and again require the customer to acknowledge them).
Customer funds: segregation, disclosure to customers and reporting requirements explains how you can comply with the requirements, including advice on what is classed as customer funds and how to apply the customer funds rating system. It also includes examples of common errors we have identified during our compliance work and information about the phased introduction of customer funds reporting by remote gambling operators.
Change to reporting requirements for remote operators
As of December 2016, we have discontinued the requirement for remote gambling operators to submit regular (four-weekly) reconciliations of the customer funds assets versus the liabilities they hold.
The 25 operators in the phase one trial of customer funds reporting have been informed that they do not need to submit a report from January 2017. We would like to thank them for the information they provided. We have taken account of this information, and the resource, other requirements and effectiveness of the measure to arrive at our decision.
Although we have discontinued this regular reporting requirement, we recognise that protection of customer funds remains an important issue.
All remote gambling operators are currently expected to carry out weekly reconciliation of customer funds assets and liabilities. This is set out in our advice note referenced above. This requirement has not changed even though we do not need the reports submitted to us. We may ask to see your reconciliations as part of our regular compliance activities.
We will now focus resource on identifying other options that could make improvements to help customers understand how their money is protected.
You will still need to make sure that you are meeting the requirements of the licence conditions above. You will also have to provide other information about your arrangements for protecting customer funds, as explained below.
Reporting on your protection of customer funds
If there are any changes in your protection of customer funds arrangements you must notify us. This is considered a key event and you can notify us via e-Services.
If you hold customer funds in segregated accounts you must also report any deficit on reconciliation of those accounts as a key event, again via e-Services.
Remote operators who hold customer funds
In addition to the above requirements, if you are a remote (online) operator you must also:
- hold customer funds in a separate account
- report information about customer funds as part of your overall quarterly regulatory returns. This includes a breakdown of customer funds relating to customers in Great Britain and those relating to customers outside of Great Britain.