Gambling Commission Raises Concerns Over Identity Verification Gaps

The Gambling Commission has raised concerns over identity verification shortfalls among operators, highlighting process gaps and issues with third-party verification providers.

The warnings were issued by Helen Rhodes, director of major policy projects and evaluation, and Sarah Webster, senior policy officer, following the regulator’s analysis of its financial risk assessment pilot scheme.

Financial Risk Assessment Findings

The regulator's pilot analysis revealed that a small proportion of customers could not be matched by credit reference agencies. According to Commission officials, failures in initial identity verification processes contributed directly to these missing matches.

When reviewing cases where failed identity verification processes may have led to unmatched returns, we found that previous customer identification was sometimes based on incomplete or inaccurate information, as well as process gaps, even though these customers were the highest spending,

Rhodes and Webster stated.

While we recognise that many operators rely on third-party providers for identity verification, we are concerned by the differing levels of data sensitivity and robustness that these providers offer, combined with the differing levels of tolerance among operators.

This can result in the use of 'fuzzy matching', where customers are onboarded on the basis of partial or equivocal verification of their credentials. This introduces risk across multiple regulatory areas, including contributing to unmatched data.

Incomplete Data and Regulatory Compliance

Specific errors identified in customer records included registering individuals using only an initial rather than a full name, using nicknames instead of legal names, and recording commercial addresses in place of residential locations.

The Commission clarified that while it does not expect the equivalent of Enhanced Due Diligence (EDD) at the initial onboarding stage, operators must ensure registration checks are as robust as possible. Accepting nicknames, single initials, or commercial addresses fails to satisfy existing identity verification rules under Licence Condition 17.

The regulator's intervention follows its formal approval of financial risk assessments in July, following extensive debate across the gambling sector.

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