FSB Fined £600k Over White Label Failings

FSB Blue LogoThe United Kingdom Gambling Commission has issued warnings to gambling operators in the wake of its decision to issue a £600,000 fine to FSB Technology. It comes after the company failed in its responsibility when it came to money laundering and advertising, as well as certain social responsibilities.

In addition to a £600,000 fine, FSB Technology will need to alter the way it operates thanks to additional licensing conditions that will be put on the company moving forward. FSB operates in such a way that the responsibility for ensuring conditions of the licence are met falls on third-party partners, which the UKGC seems wary of.

Why The Fine Has Been Issued

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In August of 2019 the UKGC launched a review of FSB Tech in the wake of the suspension of Blackbet, one of its licensees. The company said at the time that it was going to instigate a review of its own practices, with the Blackbet news coming not long after a similar issues had happened with 1xBet, another of its white label firms.

Now it has emerged that the Gambling Commission has found yet more cause for concern with the white label provider. FSB contracts provisions of the activities that it is licensed for to third parties, with the third-party then responsible for ensuring that any partners operate in a crime-free, safe manner with fair gambling practices.

An investigation by the UKGC has found that FSB Tech doesn’t have sufficient oversight of the various third-party websites that use its services, with no effective measures put in place to monitor the possibility of money laundering, nor to ensure that social responsibilities were being met.

The monitoring by the Gambling Commission took place between January of 2017 and August of 2019 and found that FSB Tech failed in a number of areas. The main issues that they had were the following:

  • One of the team managers acted without sufficient oversight and without adequate AML training
  • A customers spent £282,000 over eighteen months without sufficient interactions and with poor source of funds checks, despite showing signs of being a problem gambler
  • A Great Britain facing website featured a banner advertisement that contained cartoon nudity and provided unauthorised access to content that was under copyright
  • 2,324 customers that had previously self-excluded were sent marketing emails

The Punishment

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As well as paying £600,000 that will go towards the National Strategy to Reduce Gambling Harms, there will be additional conditions put on FSB Tech’s licences. These will be there to ensure that the company conducts ‘risk-based due diligence’ on new third-party partners that it takes on, as well as the current ones it already works with.

There are some personal management licence holders involved in the case that the United Kingdom Gambling Commission is still reviewing. What happens with them will be decided in due course, but in the meantime FSB Tech will be expected to look at the issues flagged to them and look to implement improvements where it can.

The UKGC Response

With licensed gambling operators having a duty to ensure that those that use their facilities are doing so in compliance with the Gambling Act of 2005, the UKGC was bullish in its statement about FSB Tech. The Gambling Commission’s Executive Director, Richard Watson, made reference to ‘blatant breaches of rules’ in a statement on the matter.

He said, “All operators should pay close attention to this case as it shows that we hold all licensees fully responsible for third party relationships – and we will act against any of our licensees that do not manage third parties appropriately”. He said that all rules were put in place to make sure that gambling is ‘fair, safe and crime-free’.

The thing that is the most noteworthy is likely to be the fact that Watson specifically referred to ‘all operators’, rather than just singling out FSB Tech. The clear implication is that the Gambling Commission will look closely at any white label operators that it feels are not doing enough to ensure that licensees are obeying the conditions of the licence.

The White Labels That Use FSB

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FSB Technology is a decent-sized operator of white label products, with a number of well-known firms likely to be affected by the Gambling Commission’s decision. The aforementioned Blackbet remains active at the time of writing, for example, whilst Bruce Betting, Quinn Bet and Toals Bet are also on the list.

One of the biggest names is arguably Jennings Bet, who claim to be the United Kingdom’s biggest independent retail bookmaker. They’re hardly as high on the list as the likes of William Hill or Ladbrokes, but it’s more than possible that you’ll have seen one on your travels, especially around the north of England.

What Might Happen to FSB Next?

The interesting thing to monitor will be what happens next to FSB Tech. When the Gambling Commission decided to suspend EveryMatrix’s operating licence for similar breaches, for example, the company simply decided to leave the UK market altogether. Quite whether FSB Tech will be willing to take a similar nuclear options remains unclear.

At the time of writing, the company hasn’t yet issued any sort of response to the Gambling Commission, but it’s unlikely that it will cut off its nose to spite its face. FSB Tech works with more than thirty brands on four continents, employing around one hundred and twenty people. Giving up the UK market would surely be a last resort.