UKGC drills down into why identity verifications fail and what can be done

• UKGC publishes a new in-depth analysis of why verification checks fail
• The regulator has flagged common issues and argued how they could be addressed
• The watchdog will continue to monitor operators' progress

The UK Gambling Commission, the country’s gambling watchdog, has released a new blog in which it took a closer look at why operators fail to conduct identity verifications that could later lead to consumer harm and enforcement consequences for the companies themselves.

Verification process failures highlighted by Gambling Commission

In the blog, the regulator looked into financial risk assessment practices, consumer complaints, and specific cases that resulted in failures under the License Condition 17 rule. Under said rule, remote operators must verify a user’s name, address, and date of birth before that person can place any bet on the platform.

The blog explained that operators are not allowed to request additional information for withdrawals, specifically that could have been requested earlier to verify the said player’s identity, with the Gambling Commission flagging instances where some operators still engaged in the practice, deemed as another breach of License Condition 17.

In fact, argued the regulator, over a quarter of complaints filed against operators have to do with that same issue, i.e. operators ending up requesting more information to "verify" a player’s identity when, as per the regulatory framework, this should have happened prior to any gambling activity being allowed.

Another issue that persisted was that some players, especially those who would spend more money, were not matched against credit reference agency records. The regulator did not pass any remarks on why this was the reason, i.e., it did not stipulate that operators prioritized getting these players to spend more with them.

Instead, the regulator argued that the manner in which a player’s identity was verified was partial, i.e., a nickname or a first name only used to conduct these checks, as opposed to using the full legal name.

UKGC focuses on why identity mismatches happen, avoids naming motive

Some customers were onboarded with their middle name, for example, instead of the forename, which resulted in a mismatch between the operator’s check and the available database in GAMSTOP, for example, which meant instances of vulnerable players continuing to spend.

The Gambling Commission also found fault in third-party verification providers, arguing that some of those services also took a less-than-perfect approach to verifying the identity of newly registered customers, and suggesting that this was a systemic issue.

The regulator still reiterated that it does not expect every single customer to undergo Enhanced Due Diligence, but reiterated that robust checks must be put in place in order to avoid harm and friction in the customer journey later on.

The Gambling Commission urged operators to resolve any mismatch in identity sooner than withdrawal processes begin, and said it will continue tracking how operators progress on this front.

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