How UKGC Licence Casinos

UKGC Licence Overview

United Kingdom Gambling Commission issues arguably the most robust gaming licence in the world. The licence is a complex legal framework described in the Licence Conditions & Codes of Practice (LCCP) document. All licence holders are expected to adhere to the licence conditions or risk being fined or, even worse, losing their licence altogether.

Having a UKGC licence and meeting its standards is, more than anything, a complex legal issue, with the operator expected to adapt its business practices to meet the rules and stay in line for as long as they carry the licence.

At the time of writing, March 2023, there are 195 active remote casino gambling licensees, 269 remote sports betting licensees, and 69 remote bingo licensees. Not all of these are actual operators – the number of operators is a bit smaller than the number of licences would indicate.

What does having a UKGC licence mean?

If a casino has a UKGC licence, one thing you can be certain, the company goes through a lot of trouble maintaining the necessary standards. It keeps up-to-date with the rules imposed by the United Kingdom Gambling Commission, described in detail by the Licence Conditions & Codes of Practice (LCCP).

You can view the LCCP online at any time. It’s in three parts: Operating licence conditions, Code of practice provisions and Personal licence conditions.

Two issues players care the most about are the security of payments and the safety net regarding problem gambling.

It is impossible to have an unresolved complaint regarding the payment of winnings if the casino is UKGC-licenced. That does not happen.

While non-licensed casinos can operate shady business practices and not pay, it would be foolish for a licenced UKGC casino to do the same as they risk fines and the potential loss of their licence if they are found to break the rules.

Players are protected at UKGC casinos and can self-exclude, set their playing limits, and get access to help if they have a problem.

This area needs further improvement as there have been cases of casinos or sportsbooks still targeting known problem gamblers, but UKGC is catching and fining them for that behaviour.

How Casinos get a UKGC licence?

Any gambling company that wants to offer gambling services to England, Wales and Scotland residents must apply for a UKGC licence. This includes providing facilities for remote gambling, online or through other means, and advertising to consumers in Great Britain.

It takes about 16 weeks to process an operating licence application as long as all information is provided at the point of application. Small mistakes in the documentation can lead to delays.

There are a lot of documents that need to be submitted. They include detailed company ownership and structure, policies and procedures, customer terms & conditions, rules of play, software supplier details and methods, operational model map, system diagram for an end-to-end process, bank statements, business plan, profit & loss projections for next three years, proof of funding, credit report, annual returns, details of bonus schemes, and several other things.

There is also a fee to be paid when the application is submitted and an annual fee.

Operators are put in brackets according to their Gross Gaming Yield (GGY). The lowest bracket pays £4,200 both for the application fee and the annual fee.

Companies that have a GGY between 100 and 250 million pay £38,000 for application and £105,000 annually, and it can go up to £90,000 for application and well over £1m annually for the largest operators. This is for casino and bingo – sports betting pays a bit more.

It’s safe to say that getting a UKGC licence is easier than maintaining it. There are cases of companies deliberately leaving the UK market because it’s become too demanding and less profitable to keep to the requirements of the UKGC while trying to run their business.

UKGC rules that are enforced

As you can see in the LCCP document, there are many broad areas that UKGC is concerned with.

Many areas concern anti-money laundering, anti-child labour, honest business practices, financial stability, etc.

UKGC also has detailed requirements about media advertising and when they can be shown. For example, not only must the operator remove all ads during Christmas, but it must also police media partners and make them remove ads during Christmas; otherwise, the operator would be in breach of UKGC terms and conditions.

It feels like the UKGC assumes an anti-gambling stance, but regulating gambling allows it to continue without harming UK individuals.

Most of the time, the actions of UKGC are targeted at identifying ways of protecting vulnerable customers – problem gamblers, underage people & children, by coming up with guidelines to protect them.

How A Casino Can Lose a UKGC licence

The UKGC communicates each of its decisions with the public on the Enforcement section of its website.

A glance at the recent fines and suspensions includes:

• LEBOM Limited is suspended until compliant with GAMSTOP.
• TonyBet was fined £400,000 for not having clear anti-money laundering rules.
• Entain Group, which runs 13 businesses, was fined £17m.
• Bet-at-home licence suspended.
• Sky Betting and Gaming were fined £1.17m for marketing to vulnerable customers.
• 888 was fined £9.4m for failing social responsibility and money laundering.
• Betfred and OddsKing fined £2.9m.

If we look closely at the regulatory action against Betfred, we see what went wrong.

There were no controls to prevent high-velocity spend by new customers, so one person was allowed to lose £70,000 within 10 hours of opening an account.

Also, safer gambling interaction triggers that detect significant increases in spend and losses were set too high and too slow.

In other words, Betfred allowed people to lose too much too fast and had no safeguard against problematic gambling behaviour.

It is natural for a company to want to take money from such a player. UKGC is here to say there are limits to what a socially responsible gaming facility can take before taking steps to protect the player with a problem.

If we look at Sky Betting and Gamings’ £1.17m fine, we see that Sky Vegas promoted an offer “Bet £5 get 100 free spins” to 41,395 self-excluded customers and 249,159 customers who unsubscribed from promotional emails.

In short, most of the regulatory action will have something to do with the following:

• They are not protecting a player who loses too much or/and too fast by subjecting him to a responsible gambling interaction.
• Targeting known vulnerable players, such as self-excluded players.
• Anti-money laundering and source of funds checks not being strong enough.
• They failed to integrate with the national multi-operator self-exclusion scheme GAMSTOP.

Of these, the GAMSTOP is the most significant offence, as failure to integrate the scheme successfully results in a suspension of licence. Most of the recent suspensions were due to this.

What A UKGC licence doesn’t cover

While the UKGC licence is focused heavily on the player’s benefit, it has zero concern for how a company does business with its partners.

Some large gaming companies don’t pay their advertising or media partners as they should, yet they can still operate within the terms of the UKGC licence.

Under the terms of the UKGC licence, media partners, affiliates, and influencers must appropriately age-gate and geo-gate content promoting online gambling. So you’d expect that these relationships are critical to the operator. In most cases, they are. But for unknown reasons, a selection of operators, usually the big brands, behave poorly with their media partners, putting their brands at risk. You would think that the UKGC would be interested in maintaining business relationships to prevent potential advertising risks.

This is an area in which there is room for improvement.

The downside of UKGC: No Crypto

The UKGC doesn’t outright ban cryptocurrency payment systems. However, the inherent anonymity of crypto makes it almost impossible for online casinos to accept crypto and still be in line with the UKGC licence requirements.

That means UKGC and crypto don’t go together. It’s one or the other.

If a casino takes crypto, it won’t be able to maintain a UKGC licence. Even without crypto, it is very demanding for UKGC-licenced operators to implement appropriate KYC, AML and SOF checks. Many have been fined for not going that extra mile in making sufficient checks.

With crypto, it would be downright impossible to accept the deposit while not risking a huge fine because of not knowing where the money (crypto) came from.

What about unlicensed casinos?

UKGC is very good at clearing the landscape of unlicensed casinos.

We don’t know how they do it – but it’s a fact that even the shadiest online casinos that accept anyone as a player has run away from the UK.

For example, you’ll find some Curacao-licenced casinos that accept any country, including those where they shouldn’t. UK players are the only ones that are explicitly not accepted.

That shows how powerful UKGC is.

Future developments

Currently, media partners of online gambling companies aren’t regulated to the same level as gambling operators.

It is likely that the media partners will also be regulated in some way in the future and will therefore need their licence.

For now, media partners are expected to follow a code of conduct, and gambling companies are policing the media partners regarding the content they put up. Hence, the UKGC licensees are carrying out the work imposed by the UKGC.

Generally, we can expect UKGC to get an even firmer grasp on all aspects of a gambling company that offers its services to UK players.

In the foreseeable future, UKGC seems to have its hands full with identifying the operators that either target vulnerable customers or don’t have sufficient safeguards when someone exhibits problem gambling behaviour.

Expect that to continue and represent the bulk of UKGC’s work at any point in the future. We can also expect further tightening of the regulations, so more operators with bad business practices are caught in UKGC’s web.