FSB sanctioned £600k as UKGC demands white-label overhaul
Investigation uncovers “blatant breaches” of third-party websites as regulator adds additional conditions to licence
The Gambling Commission (UKGC) has fired a warning to white-label businesses after FSB Technology was hit with a £600,000 settlement for the compliance failures of its third-party partners.
The regulator has ordered FSB to change the way it operates as a white-label business, having issued the financial package for advertising, money laundering and social responsibility failings.
FSB’s white-label business model allows it to sell UK-licensed activities to third-party operators – three of which were found to have breached UKGC regulations between 2017 and 2019.
The UKGC wrote: “This arrangement, often referred to as a white-label, places responsibility on the licensee to ensure that its third-party partners keep gambling fair, safe and crime-free.
“However, a UKGC investigation discovered FSB did not have sufficient oversight of three third-party websites or effective AML and social responsibility policies and procedures in place between January 2017 and August 2019.”
The breaches included ineffective interactions and source of funds checks on a customer who displayed indicators of problem gambling after spending £282,000 over an 18-month period.
One licensee was found to have sent marketing emails to 2,324 customers who had previously self-excluded, while one VIP manager acted without adequate oversight or AML training.
On another occasion, an FSB partner placed an inappropriate banner ad containing cartoon nudity on its GB-facing website which was providing unauthorised access to copyrighted content.
As well as the £600,000 settlement, FSB must adhere to additional licence conditions to ensure it conducts risk-based due diligence on new and existing third-party partners.
UKGC executive director Richard Watson said: “All operators should pay close attention to this case as it shows we hold all licensees fully responsible for third-party relationships.
“We will act against any of our licensees that do not manage third parties appropriately. These were blatant breaches of rules we have put in place to ensure gambling is fair, safe and crime-free.”
The UKGC is still reviewing the actions of personal management licence holders involved in the case.