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Banks holding all the aces
Tuesday, March 26, 2019, by Lorien Pilling, comments 0

Across various sessions at the recent Betting on Football conference it was clear that the banks still exert a strong influence over the gambling sector in a variety of different ways.


It was stated during the conference that the banks’ opinion of the risks posed by the gambling sector is partly shaped by the spate of regulatory action and fines against various operators by the UK Gambling Commission in recent years. This is particularly concerning because it determines how banks deal with different parts of the gambling sector.

For example, new gambling companies will struggle to get investment or loans from banks to fund or expand their ventures. Even getting a basic bank account can be difficult for new companies. Small companies often do not employ enough staff to meet all the requirements for AML and compliance officers. Any sector needs new entrants to reinvigorate and innovate. If the lack of a bank account or funding is stifling this process, gambling will suffer.

On a related topic, the use of cryptocurrencies is also being held back by the operators’ fear of losing their conventional bank account because of the banks’ wary view of these payment methods.

The banks are also playing more of a role in the area of problem gambling. Banks have access to more personal consumer information than gambling operators and also have the means of restricting transactions – or allowing customers to restrict transactions. They can even intervene if they see a pattern of behaviour. Of course, with this ability comes a responsibility to allow a legitimate, licensed betting operator go about its business without undue limits on its ability to take payment from consumers.

The banks’ importance in the gambling supply chain is well established. It is why governments often target payments when they attempt to curtail gambling. What rankles a little bit is that gambling operators are often holding themselves to a higher standard on AML, KYC and compliance than the banks meet.