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UK operators may require additional funds for potential fines

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With strong regulations and easy fines, UK-regulated online casinos may need a regulatory fund to cover unexpected issues.

For online casino operators, success and flow are determined by the regulatory bodies in legal gambling regions. The United Kingdom Gambling Commission is one of the strictest authorities with a free hand regarding fines.

With the increase in regulatory requirements and the hefty fines that can be applied, operators might need to add a regulatory fund to their budget.

William Hill knows best

One of the leading operators, William Hill, is due a license review and has put £15 million aside to cover the costs of a potential regulatory settlement.

The “nest egg” was revealed in documents regarding the 888 acquisition of William Hill’s non-US business.

The documents and updates are primarily agreements between 888 and William Hill to reduce the cash price of WH’s assets. This reduction is about £250 million. The change was to reflect the difference in the macroeconomic and regulatory environment in the past few months.

The document reveals that William Hill is subject to an ongoing license review launched after a compliance assessment in July and August 2021.

Hefty fines for UK operators

For any potential sanctions, William Hill reportedly put aside a £15 million provision in its financial statements. Some operators have been subjected to hefty fines. This includes Betway, who received an £11.6 million fine for failings regarding social responsibility and money laundering regulations with big spenders in 2020.

888 has also been on the receiving end with a £9.4 million fine. Again, the penalties were related to social responsibility and money laundering failings, including setting a deposit threshold of £40,000 for financial checks. The group also received a warning from the UKGC, putting their licensing agreement at risk. Essentially, 888 could lose its license if any similar failings arise in the future.

There have been several considerable fines in the past five years. The majority stem from failing to comply with ‘standard’ regulatory requirements. However, many believe that the UKGC is becoming impossibly strict and is one of the regulators with the biggest fines. It is setting unattainable restrictions that can cause problems in the future, driving legal operators away.

A budget to cover potential reviews

With such strict regulatory measures and potential reviews, it might be wise for operators to follow in the footsteps of William Hill. Setting aside a possible ‘regulatory fund’ to cover potential fines and other costs may be the only way forward.

While it may seem unnecessary, it may save UK operators trouble and financial struggle in the days ahead. With a budget in place, operators might be able to cover fines and implement change without taking a heavy hit.

UKGC: Not so perfect?

There are talks that the UKGC has misused funds from the National Lottery ticket proceedings intended for good causes. The gambling authority apparently may have misused as much as £155 million.

There is speculation that the funds have been used to cover administration costs and other unexpected expenses. According to the UKGC chief executive Andrew Rhodes, the funds have been taken to guarantee regulatory efforts over the next decade. A share of the funds has been used to complete the fourth National Lottery license award process.

There are several issues arising with the UKGC, of which one is the hefty penalties UK operators face.

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