Gambling Commission warns of customer identity check pitfalls

The Gambling Commission has warned gambling operators that if they only request identity documents from customers at the point of them withdrawing funds, they risk not meeting their anti-money laundering (AML) and social responsibility obligations, and in turn breaching the terms of their operating licence.

In a statement at the end of June, the Commission explained that it had found numerous instances of operators only requesting identity documentation when the customer requested to withdraw funds from their account. Consequently, where a customer has not won anything, they can be completely overlooked by the operator, both from an AML perspective and also in terms of certain social responsibility checks ( such as age verification and problem gambling).

Whilst the Commission acknowledged that asking for identification documentation prior to withdrawal could be disproportionate, they stressed the need to strike the right balance and take a risk-based approach. Sharon McNair, programme director at the Gambling Commission stating:

“Gambling firms must ensure customers are not disadvantaged by the operator’s approach to requesting customer information. Different consumers have different levels of risk, and this must be managed by the operator. It is this level of risk that should drive engagement with the customer for both social responsibility and AML purposes. We urge operators to review their risk assessments and processes to ensure they are meeting their AML and social responsibility obligations. This means assessing the ongoing risks as the relationship progresses with the customer, not just at withdrawal stage.”

Interestingly, in the same week the Competition and Market Authority (CMA) announced that its ongoing investigation into the practices and consumer terms of the remote sector would be expanded to scrutinise certain withdrawal terms also (more on which can be found here). This specifically includes terms which impose arbitrary deadlines on the time customers have to provide information to verify their identity as a condition of withdrawal.