In a recent address to leaders within the gambling industry, Andrew Rhodes, the CEO of the Gambling Commission, emphasized the importance of licensed operators conducting thorough assessments of their third-party suppliers. The aim is to prevent any involvement in illegal or black-market activities.
“The Commission is committed to disrupting illegal gambling at its source. Our efforts target internet service providers, payment services, search engines, software suppliers, and more,” Rhodes remarked during his November speech.
Rhodes initially broached this subject in 2023, urging operators to leverage their influence with suppliers to avoid supporting illicit activities in the UK. This initiative is a component of broader regulatory measures aimed at curbing the expanding black-market gambling sector both within the UK and internationally.
In September, the Betting and Gaming Council (BGC) published a groundbreaking report. It estimated that each year, up to £2.7 billion is wagered online with unauthorized operators in the UK. This report gathered consumer feedback about their exposure to illegal sites, including insights into illegal betting practices and the use of VPNs for private online activities.
### B2B Compliance: A Regulator’s Responsibility
Rhodes’ remarks sparked discussion within the industry, suggesting that operators might need to assume some regulatory responsibilities themselves. Richard Williams, a partner at the UK law firm Keystone Law, mentioned the challenges licensed operators face in thoroughly vetting all their suppliers.
“Ensuring compliance is quite challenging for licensed operators without going beyond asking suppliers basic questions,” Williams noted. “If a software company supplies to both GB and non-GB entities, how can the licensee be sure that a non-GB operator is not letting GB customers gamble? The same dilemma applies to payment services and other external suppliers.”
Industry representatives from Germany and Sweden believe that ultimate compliance responsibility should reside with regulatory bodies. Gustaf Hoffstedt, Secretary General of the Swedish trade association BOS, stated, “Ensuring due diligence should be a task for lawmakers and regulators.” He pointed out that the gambling industry contributes significantly in taxes across Europe, thereby expecting government and regulatory bodies to enforce compliance.
Simon Priglinger-Simader, Vice President of the German gambling association Deutscher Online Casino Verband (DOCV), echoed this sentiment, arguing it shouldn’t be the operator’s sole responsibility to monitor their suppliers but rather the regulator’s task.
### Adoption of a B2B Licensing System?
However, Priglinger-Simader advocates for more countries to implement a B2B licensing system to address supplier black-market activity, believing it would enhance compliance. Sweden launched such a system in March 2023, following its initiation in January 2022 to elevate the country’s channelization rate. By July 2023, rules allowed only licensed suppliers without black-market involvement to operate within its borders.
Finland also plans to require licenses for suppliers in its forthcoming regulated market, set to launch in January 2026. Under new regulations, starting from 2028, B2B providers must be certified, and operators can only engage with licensed suppliers. These B2B licenses will remain valid for five years.