Common Regulatory Mistakes Made by Online Gambling Operators

Gaming & Betting

21 Jul

Introduction

Online gambling operators in Great Britain face an increasingly exacting regulatory landscape. Holding a Gambling Commission licence requires more than documented policies. Operators must be able to evidence that controls are effective in practice, embedded in day-to-day operations and reviewed regularly for continued suitability.

Recent reported enforcement outcomes indicate that similar issues recur. These can lead to substantial financial penalties, additional licence conditions, independent audits and, in serious cases, suspension or revocation of an operating licence.

Ineffective anti-money laundering controls

Anti-money laundering (AML) compliance remains a frequent source of failings. Operators may have detailed AML frameworks but fall short in implementation. Common pitfalls include setting financial thresholds too high, undertaking source of funds checks too late, failing to scrutinise unusual deposit and withdrawal patterns, placing excessive reliance on open-source information or automated risk scores, and failing to keep sufficiently detailed records of decisions.

Automated tools can support compliance but do not replace informed human oversight. In November 2025, the Gambling Commission reported an operator’s over-reliance on an algorithm that did not recognise several high-risk indicators, which was noted as contributing to a reported £650,000 regulatory settlement. Operators should regularly test the practical effectiveness of AML controls and ensure that identified risks result in timely, proportionate action.

Failing to identify and respond to gambling harm

Operators are expected to monitor customers and identify indicators that they may be experiencing, or are at risk of experiencing, gambling-related harm. A common error is focusing solely on deposit or loss values. A broader set of indicators should be considered, such as sudden increases in spending, extended or frequent gambling sessions, repeated failed deposits, chasing losses, use of multiple payment methods and significant changes in play patterns.

Once an indicator is identified, the response should be appropriate to the level of risk and timely. A generic automated message may not be sufficient. Interactions should be meaningful, and operators should consider whether account restrictions or closure are warranted, informed by the circumstances and the LCCP and relevant guidance.

Policies that do not reflect actual practice

The Gambling Commission looks beyond policy wording to assess real-world application. A well-drafted policy offers limited protection if staff do not understand it or if operational processes diverge from it.

Where operators do not conduct checks required by their own procedures, or cannot evidence the rationale for decisions, a discrete procedural weakness can be treated as indicative of wider control failings. Policies should be tailored to the business model, supported by targeted staff training and regularly tested against customer files and live account activity.

Inadequate oversight of third parties

Engaging white-label partners, affiliates, payment providers or outsourced compliance services does not transfer regulatory responsibilities away from the licensee. Operators should conduct proportionate due diligence before appointment and maintain ongoing monitoring. This typically includes consideration of ownership and control, source of funds, regulatory track record, marketing practices and the legality of activities in other jurisdictions. In 2025, it was publicly reported that TGP Europe surrendered its licence following the Commission identifying failures related to third-party due diligence and AML controls. Operators should ensure they retain adequate access to information and contractual rights to intervene where concerns arise.

Marketing and promotional failures

Marketing must be socially responsible, transparent and compliant with applicable advertising requirements. Common issues include unclear or hard-to-find bonus terms, marketing sent without valid consent, contact with self-excluded or otherwise vulnerable customers, non-compliant affiliate content and advertising likely to have particular appeal to children.

Operators should approve materials before publication and undertake regular oversight of affiliates. Responsibility for compliance cannot be delegated to external partners.

Late or inaccurate regulatory reporting

Operators are required to notify the Commission of specified key events as soon as reasonably practicable and, in any event, within five working days under the LCCP, and to submit accurate quarterly regulatory returns within 28 days of the end of each reporting period.

Late, incomplete or inaccurate submissions may be viewed as symptoms of weak governance. Operators should maintain a clear reporting calendar and ensure that compliance teams are promptly informed of relevant corporate, financial, legal and operational developments.

Conclusion

Effective compliance is evidenced by outcomes, not just documents. Operators should ensure that systems, staff and decision-making consistently achieve the standards expected under the Licence Conditions and Codes of Practice, supported by robust oversight, timely interventions and clear, auditable records.

This article is intended for information purposes only and provides a general overview of the relevant legal topic. It does not constitute legal advice and should not be relied upon as such. While we strive for accuracy, the law is subject to change, and we cannot guarantee that the information is current or applicable to specific circumstances. Costigan King accepts no liability for any reliance placed on this material. For further details concerning the subject of the article or for specific advice, please contact a member of our team.