UKGC CEO Andrew Rhodes speaking at the Betting and Gaming Council's Annual General Meeting, where he gave gaming industry leaders a rundown on on the regulator's current positions. (Image: courtesy of Betting and Gaming Council)

UK Gambling Commission CEO Andrew Rhodes has suggested licensed operator compliance has become a “much more positive” picture over the last 18 months. And he is pledging greater scrutiny of smaller firms.

Rhodes spoke Thursday at the Annual General Meeting of the Betting and Gaming Council, whose members consist of gaming operators and suppliers who make up almost 97% of the UK-licensed market.

In his remarks, he highlighted the tribulations of the last few years in the sector, including the Covid-19 pandemic and publication of the White Paper review into the UK Gambling Act after a longer than expected delay as “casting a shadow” over the industry.

The Commission’s role in regulating the UK gambling sector has also been called into question, by both parliamentary inquiry and in the wake of the high-profile collapse of Football Index, which left thousands of UK punters out of pocket.

Gambling Regulator Reflects

Since the start of the pandemic in the UK in March 2020, the UKGC’s regulatory actions have ramped up dramatically. 

The watchdog has undertaken 62 separate enforcement actions against licensed firms, levying a range of punishments from license reviews, suspensions and financial penalties.

Notable fines include an £11.6m fine for Betway in 2020 over failings related to VIP players, a £17 million fine for Entain for social responsibility and anti-money laundering breaches in 2022 and a March 2023 fine for William Hill of £19.2 million – the UKGCs largest to date.

Despite the increase in enforcement actions, Rhodes said that the industry had turned a corner in the last 12 to 18 months, and that there had been a “very clear difference” in operator compliance. “The picture is a much more positive one,” Rhodes said.

Smaller Operators Should Expect More Scrutiny

Looking ahead to 2024 and beyond, “The Commission will be focusing on operators we classify as being tier 2, 3 and 4,” Rhodes said. “Our concern, and our casework seems to support this, is compliance is lower in some of these areas and data also indicates possible displacement of higher risk customers into some of these operators.”

Historically, the UK’s largest gambling firms, including the so-called “big five” of bet365, Entain, William Hill, Flutter and 888 have been regarded as ‘tier one’ operators, in that they generate the largest revenue and have the biggest customer bases.

Those deemed to be in tiers 2,3 and 4, are generally accepted as being of a smaller business model, with lower revenue generation and smaller customer bases.

“From a regulatory point of view, it cannot be acceptable for operators to make the changes and investment they have to drive higher standards, only to potentially observe others in the same market appearing to ‘get away’ with lower standards,” Rhodes said of the UKGC’s sharper attention on smaller online gambling operators. 

“This is where a lot of our focus will be in the coming year – ensuring the required standards are met right across the board.”

Rhodes cited several areas including bonus abuse and potential identity fraud as “rapidly increasing” issues for the sector and something on the UKGC’s immediate radar.

Rhodes also highlighted the need for transparency with player withdrawals and restrictions placed on specific players.

“Whilst checking for financial risk is an important part of customer interaction for a small minority of customers, we know it is not the only reason customers are facing checks,” Rhodes said. 

“So if its your terms and conditions or AML, or for purely commercial reasons then you should say so.” 

White Paper Woes

The UKGC CEO’s remarks come as the industry wrestles with the implementation of a White Paper review into the 2005 Gambling Act, with stake limits on online slots and affordability checks on consumers soon to be introduced.

Rhodes claimed the review has become an “incredibly polarised” debate, with the BGC and industry in one corner, and advocates for greater prohibitions on the sector in the other.

“There is always an inherent tension between the regulator and the industry it regulates, as well as a whole swathe of other interested parties who may have very strong views on what the regulator ought to do or not to do,” Rhodes told delegates.

The UKGC CEO’s comments echo those of Conservative MP Philip Davies, who suggested punters were caught in a “tug of war” between the industry and prohibitionists in a parliamentary debate on financial risk checks for gamblers earlier this week.

Growing Industry Momentum

Rhodes committed the UKGC to being open and transparent in its approach to implementing new regulations, suggesting it would signal areas of concern and exploration in its regulation over coming years.

However, he snapped back at industry criticism that the UKGC doesn’t do enough to talk up the sector.

“We are not here to champion the industry,” Rhodes said. “That is what you have the BGC for. The Code is aimed at ensuring that we carry out our activities in a way that supports you all to comply and grow.”

Rhodes lauded the recent launch of the Gambling Survey for Great Britain, suggesting it would ultimately improve outcomes for the industry through better regulation.

“Better outcomes of course for everyone too. Consumers, operators and everyone else concerned with gambling. That is the prize we are aiming for over the next couple of years.”