National Strategic Assessment 2020
This report sets out our latest assessment of the issues we face and the risks that gambling poses to consumers and the public
What are the issues - Unlicensed gambling
The risk of unlicensed gambling has increased due to the change of consumer behaviour shifting from land-based play to online. It is our statutory duty to keep consumers in Great Britain safe, therefore, we monitor the market and disrupt those that are unlicensed.
When consumers access illegal gambling sites, they expose themselves to risks and are not afforded the protections required in the regulated sector. We are particularly focused on identifying and disrupting those illegal websites which are targeting young and vulnerable gamblers to deliberately circumvent our customer protection standards.
During this period, the emergence of unlicensed websites targeting consumers who have excluded using the Gamstop system has been a major concern.
We assess intelligence gathered from multiple sources and work closely with partner agencies to prevent access to illegal websites by consumers in Great Britain. If an intelligence- led initial approach is unsuccessful, cases are referred to the enforcement team for investigation and further disruption options.
This approach ensures that our focus is on those websites presenting the greatest consumer threat. Licensees have highlighted the risks posed by illegal operators who undermine consumer protection efforts and provide an unfair source of competition. Some licensees argue that increased regulation in the licensed market risks diverting consumers to the black market.
Our enforcement team has tackled 59 instances of remote unlicensed operators this year and engaged with 15 international regulators. We continue to successfully disrupt illegal online gambling where payment providers or advertising platforms can be identiﬁed.
However, the risk remains that some unlicensed website operators can adapt to use other payment providers once they are aware payments are being blocked. There has been and continues to be fast and extensive innovation in the payment sector, which requires additional resource and systems to detect and counteract.
This risk is common across regulated markets, a total of 16 EU member states have measures in place requiring payment processors to block transactions with unlicensed gambling operators. However, most regulators have reported mixed success in combatting gambling payment processing, with challenges when operators use accounts located outside the countries in which their gamblers live.
An effective approach to payment blocking is an important regulatory tool but needs to be complemented by other means of preventing illegal gambling websites. We will continue to review our resources and powers to ensure we can continue to tackle unlicensed gambling websites targeting British consumers.
In the last 12 months we have conducted compliance and enforcement work focused on the risk that some unlicensed operators seek to use ‘white label’ agreements to circumvent licensing requirements. Our work has revealed some licensees were failing to exert appropriate control over the activities that their licence authorised.
This included failure to properly scrutinise the ownership and business models of partners, address money laundering and politically exposed persons (PEP) risks and general poor oversight. We have produced revised guidance to remind operators of their obligations.
An increasingly prominent risk of exposure to unlicensed gambling for the public has been the growth in commercial social media lotteries. From May 2019 to May 2020, 245 illegal lotteries were referred by us to Facebook for closure.
Social media lotteries are a growing issue due to their increasing presence on Facebook and other social media platforms. Historically such lotteries were low-level events, and intelligence identiﬁed many were being run from home by a small group of people and for low value prizes. However recent intelligence suggests larger, more organised operations may be in effect, generating signiﬁcant proﬁt.
We will continue to tackle illegal gambling effectively by increasing
- understanding of the scale of the problem
- capacity such as accredited online investigators
- expanding the availability of necessary software tools
- exploring greater use of different disruption techniques.
What are the issues - Our assessment of a Licensee’s compliance Next section
What are the issues - Tackling suspicious gambling activity
Last updated: 2 June 2021
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