UKGC FUND PROTECTION RATINGS DANGEROUS TO ONLINE GAMBLING GROWTH

Published on November 27, 2014 in Industry News

UK flagThe UK Gambling Commission (UKGC) has rolled out a new policy which is making life difficult for remote gambling licence holders. The national online gambling watchdog has announced the introduction of three tier rating system relating to how the funds of UK gamblers will be managed by the licence holder.

A Basic qualification would mean: “Customer funds are kept in accounts separate from business accounts but they would form part of the assets of the business in the event of insolvency.”

A Medium qualification would mean: “Customer funds are kept in accounts separate from business accounts; and arrangements have been made to ensure assets in the customer accounts are distributed to customers in the event of insolvency.”

A High qualification would mean: “Customer funds are held in a trust account which is verified and subject to controls by an independent trustee.”

One the major complaints has been the short time frame given for compliance. Operators have until December 31st, 2014, to let customers know “which of these three categories they fall into and explain why”. 

While the aim of Customer Fund Protection system has at its core the laudable goal of educating players there are some concerns around how the gambling public will respond to any casino not automatically offering the High level of fund management. Could it lead to a loss of player liquidity which in turn forces some casinos to close?

Licencing in the UK is not a cheap venture and all these extra cost items could also drive away viable brands who are simply not interested in becoming burdened by the UKGC’s ever increasing list of demands.