Legal View: The Gambling Commission’s ID verification warning

Earlier this month, the Gambling Commission issued a warning to operators that were not complying with its new requirements to verify the identity of customers before allowing them to gamble. The warning was issued as the Commission had received complaints from consumers about operators that were still delaying withdrawal requests, pending receipt of identity documents.

On 7 May 2019, the Commission’s revised Licence Conditions and Codes of Practice (LCCP) came into force, requiring operators to obtain and verify the identity of customers before permitting them to gamble. The identity information verification must include, but is not limited to, the customer’s name, address and date of birth. New LCCP condition 17 also states that operators must not restrict withdrawals by asking for other identity documentation at that point, if the licensee could reasonably have requested the information at an earlier time. Operators are now required to tell customers what documentation will be required from them, before they deposit funds. This allows customers to walk away if the operator’s documentation requirement is too onerous.

The Commission warning also makes clear that the requirement to verify identity applies to all customers and not just to new registrations. So new and existing customers should not be allowed to gamble until operators have verified their identity. Furthermore, any additional identity documentation must be requested promptly where an operator’s anti-money laundering risk assessment requires this. A withdrawal request should not be the trigger for requesting this additional identity documentation.

The Commission has also taken the opportunity to remind operators that they may not simply confiscate a customer’s funds because they have not provided identity documentation. During the Competition and Markets Authority (CMA) investigation into the remote gambling industry, which ran between October 2016 and March 2018, the CMA made it clear that consumers were legally entitled to withdraw their deposits and winnings and that (subject to anti-money laundering requirements) these winnings should not be confiscated.  When concluding its investigation into breaches of consumer law in April 2019, the CMA warned the industry to amend its practices restricting withdrawals.

It has been a long-standing complaint that gambling operators are keen to accept deposits, but less keen to payout. Having imposed new licensing conditions to deal with these issues, the Commission has already felt it necessary to warn some operators that they are not complying with its new identity requirements. Licence reviews could be the next step for non-compliant operators.

Whilst the Commission’s guidance helpfully clarifies that the identity requirements apply to all customers, it does not help operators decide what to do with long-term balances which cannot be refunded as requested identity documentation has not been provided by a customer.