Blocked by the bank: Helping hand or troubling precedent?

Comments by David Clifton feature in one of the main news articles in the current edition of iGaming Times, coinciding with ICE 2019.

Entitled “Blocked by the bank: Helping hand or troubling precedent?”, the article can be downloaded below. Its opening summary states:

With high street banks taking on some of the responsibility for blocking problematic payments, and the government looking into a ban on betting with credit cards, we ask whether this gives succour to a sector struggling with self-exclusion, or signals another small step towards controlling how consumers spend their cash. 

Reflecting the views expressed in the article by David:

  • We don’t see this development leading to any alleviation of compliance obligations on the part of gambling operators. They will remain bound to promote the licensing objective of protecting the vulnerable and to comply with all of the LCCP obligations associated with that. In our view, only a foolhardy operator would approach this on the basis that it could provide some cost-saving from a compliance perspective.
  • Banks have their own AML controls in place and will be liable to enforcement action and the imposition of financial penalties and fines by the Financial Conduct Authority for any failings on their part just as the Gambling Commission enforces regulation against the casino sector.
  • However, gambling operators generally will be asking for trouble if they take a relaxed a view about their own AML and suspicious activity reporting obligations by placing reliance on the checks they assume will have been undertaken by their customers’ banks.
  • Recent examples of FCA enforcement against banks for AML failings include Canara Bank (fined £896,100 and banned from accepting deposits from new customers for 147 days in 2018), Deutsche Bank (fined over £163million in 2017), Sonali Bank (fined over £3.25million and banned from acquiring new customers for 168 days in 2016), Bank of Beirut (fined £2.1million  and banned from acquiring new customers from high-risk jurisdictions for 126 days in 2015) and Standard Bank UK (fined over £7.64m in 2014).

You can read our previous comments on banks’ gambling spend blocking tools here.