White Labels and Gambling Licences: Who Bears Responsibility?

Gaming & Betting

6 Oct

Introduction

The gambling industry has long relied on white-label arrangements and for many businesses, the benefits of these arrangements include a quick and relatively cost-efficient way to enter the market under an established licence.

But what happens when something goes wrong? Whether it’s anti-money laundering failures, misleading advertising, or customer complaints — who is liable: the white-label partner, or the licence holder?

What is a White-label Arrangement?

In a white-label arrangement, a licensed operator provides the regulatory framework — including the Gambling Commission licence — while the white-label partner usually provides the brand, marketing, and often the customer-facing website.

From the outside, the site may appear to be run by the white-label partner. But behind this, it is the licence holder who is operating the gambling activity taking place.

The Gambling Commission’s Stance

The Gambling Commission has been clear about responsibility and it is the licence holder who bears ultimate responsibility for:

AML and safer gambling obligations;
advertising and promotions compliance;
customer funds and terms of play; and
reporting and governance requirements.

In practice, this means that even if the white-label partner designed the promotion, managed the customer communication, or brought in the players, the licence holder will be the one facing enforcement action if rules are breached.

In recent enforcement cases, licence holders have faced significant fines where their white-label partners have failed to implement adequate checks or ran non-compliant campaigns. The Commission has repeatedly stated that it will not accept attempts by operators to outsource their regulatory responsibilities in this way.

Where does that Leave the White-label Partner?

Whilst the licence holder is directly liable to the Commission, the white-label partner is not absolved of responsibility.

Contractual liability: The operator will usually pass liability down in the contract, so that if the partner’s actions trigger a fine, the operator will seek indemnities or damages via the contractual mechanisms.

Reputational risk: White-label partners can suffer brand damage if their site is linked to regulatory failings, even if they are not directly fined.

Commercial fallout: An operator facing enforcement may terminate the agreement, leaving the white-label partner without a licence to operate or platform – leaving it without a revenue stream.

Common Pitfalls

Despite the appeal of white-label arrangements, they come with a host of compliance and operational risks. Many of these risks stem from misunderstandings or oversights in how responsibilities are shared such as:

Ambiguous contracts – Many white-label contractual arrangements are vague about which party is responsible for compliance. This creates gaps and uncertainty for both parties.
Weak oversight – Licence holders sometimes fail to properly monitor their partners’ activities, trusting them to stay compliant without actual oversight.
Marketing breaches – White-label partner often push the boundaries on promotions and advertising, creating risk for the operator who carries the regulatory burden.
Poor communication – Failures to escalate customer risk flags or suspicious activity between a white-label partner and an operator can leave both exposed.

Practical lessons for operators

For licence holders, the stakes are high. To protect their business and licence, operators must take proactive steps to manage risk and ensure their partners are aligned with regulatory expectations; such as:

Tighten contracts: Make sure agreements with white-label partners clearly allocate responsibilities, with indemnities for regulatory breaches.
Invest in monitoring: Do not rely solely on the white-label partner’s assurances — audit their activity regularly.
Training and alignment: Ensure that the white-label partner understands the applicable advertising codes, safer gambling tools, and reporting duties.
Have an exit plan: If a white-label partner repeatedly creates compliance risk, the operator must be able to terminate quickly.

Practical lessons for white-label partners

While white-label partners may not hold the licence, they are far from immune to the consequences of non-compliance. From reputational damage to commercial disruption, the fallout can be severe. To build sustainable partnerships and safeguard their business, white-label partners should consider the following key strategies.

Know the rules: Even if you are not the licence holder, you must understand Gambling Commission requirements — particularly around advertising, AML, and customer interaction.
Negotiate contracts carefully: Watch out for one-sided indemnities that leave you exposed to unlimited liability.
Protect your brand: Build compliance into your marketing strategy to avoid reputational damage.
Diversify: White-label partners who rely on a single operator are vulnerable. If that operator faces enforcement action or has its licence suspended, your entire business may be stranded overnight. Diversifying across more than one licensed operator, or developing contingency strategies, ensures that you are not left without a platform.

The future of white labels

The Gambling Commission has already expressed concern about white-label models, questioning whether they offer enough protection for consumers. There is speculation that future reforms could further restrict or even phase out some white-label arrangements.

However, for now, they remain a legitimate route into the market — but only if handled carefully. Both licence holders and their white-label partners need to be mindful about where liability lies and take proactive steps to manage the associated risks.

Final thoughts

White-label partnerships can be commercially attractive, but they are not a shortcut to avoid regulation. The Gambling Commission has made it clear that the licence holder is always responsible.

For licence holders, that means taking white-label oversight seriously. F or partners, it means understanding your exposure — both contractually and reputationally and ensuring your agreements reflect a fair balance of risk.

When structured and managed properly, white-label partnerships can deliver commercial value for both parties. However, without proper controls, they expose operators and partners alike to regulatory intervention, contractual disputes, and reputational harm.

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.