UKGC Can't Quantify High-Risk PEPs in White Labels
FOI response reveals regulator does not centrally track politically exposed persons, a key anti-money laundering risk factor.
A Freedom of Information request has shown the UK Gambling Commission does not centrally track the number of Politically Exposed Persons (PEPs) linked to white label operators. The regulator cited excessive costs to retrieve the data, indicating a lack of a unified database for this key anti-money laundering risk indicator.
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UKGC Lacks Central Data on High-Risk Individuals
A Freedom of Information (FOI) disclosure has revealed that the UK Gambling Commission (UKGC) does not hold a central record of Politically Exposed Persons (PEPs) connected to its white label gambling licensees. The regulator stated it was unable to provide the total number of PEPs, citing the excessive time and cost required to manually search its records.
Context: Why PEPs and White Labels Matter
Politically Exposed Persons are individuals who hold, or have held, a prominent public function. Due to their position and influence, international anti-money laundering (AML) regulations consider them to be at higher risk for potential involvement in bribery and corruption. Gambling operators are required to conduct enhanced due diligence on any customers identified as PEPs to mitigate these risks.
White label operators are companies that offer gambling services using the licence of another established firm. This creates a complex network of partnerships that the UKGC is responsible for overseeing. For consumers, understanding the robustness of this oversight is key to trusting the integrity of the market.
Details of the FOI Request
The request, dated 27 November 2023, asked the Commission for a simple figure: the total number of PEPs identified during due diligence checks carried out on all current white label licence holders and their partners.
In its response, the UKGC withheld the information, invoking Section 12 of the Freedom of Information Act. This exemption allows public bodies to refuse requests where the cost of compliance would exceed £450, which is equivalent to 18 hours of staff time.
The Commission explained its reasoning:
"In order for the Gambling Commission to establish whether information is held relating to politically exposed people... a review would need to be take place across a number of our systems and records as this information would not be stored in a central location."
It further estimated that it would take "in excess of 18 hours" to locate and extract the data due to the "high volume of records which will need to be individually reviewed".
Significance: A Potential Regulatory Blind Spot
The UKGC's inability to easily retrieve this data is significant. It indicates that the regulator does not have a unified, top-level view of the prevalence of high-risk individuals across the white label sector. While individual licensees are responsible for conducting their own checks, the lack of a central database at the regulatory level raises questions about the Commission's ability to effectively monitor systemic risks and identify trends related to financial crime.
This response highlights a potential gap in regulatory oversight. Without aggregated data, it is more challenging for the UKGC to assess whether AML controls for PEPs are being applied consistently and effectively across the complex web of white label arrangements. The Commission did note that the requester could submit a more refined, narrower request, but confirmed that even if data were found, other exemptions could still prevent its disclosure.